Airline traffic has fallen because of economic slowdown for the first time in 25 years, according to figures from the Association of European Airlines. Overall traffic fell 1.1% in September, compared with the same month last year, while domestic traffic fell 12.4%.
Since the early 1980s, only the 11 September 2001 attacks, Sars and the Gulf Wars have caused such declines. With European countries entering recession, traffic cannot be expected to recover quickly, and this was the first traffic loss since the early 1980s which was attributable to essentially economic factors the AEA said.
The association blamed the “toxic” combination of economic slowdown, declining business and consumer confidence, and fuel-driven price inflation for the fall. Ulrich Schulte-Strathaus, general secretary of the AEA, said: “In terms of response to purely economic stimuli, these figures are the weakest our industry has seen for 25 years.”
Cross-border European flights fell 1.1%, while total international flights were down 0.1%.
Alitalia, Italy’s national airline that filed for bankruptcy protection in August, saw traffic fall 25%, more than any other carrier. Spanair was down 21.1% and Icelandair was down 12.8%.
In load factor terms it is clear to see what a catastrophe Alitalia has become, load factor down 7% year on year even though capacity was slashed 18%. Also reporting terrible figures is Spanair which shows 7% worse load factor despite capacity down 13%. Olympic airways bucked that trend with a 14% cut in “cax” helping it to a 6% improvement in loads.
Airline Load Factors for September
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October 23rd, 2008 at 5:32 am
We are in the midst of a massive downturn. . . So few airlines can survive with this level of demand coming at the top end of their growth and aircraft delivery cycles. European airlines are most hurt as even if oil falls on weak demand the dollar is up 20% in just the last month.
To survive airlines must >
1) Have flexibility with capacity to come down 25%
2) Have lots of cash on balance sheet, to survive operating losses for 2 years or more
3) Be unhedged
4) Be able to reduce costs inline with falling capacity or passenger numbers
5) Be able to get revenues from non-flight activities, if people are going to stay home sell them a DVD rental!
October 26th, 2008 at 7:07 pm
Agree that these are the worst conditions for airlines for many years and it’s tragic that there are so many aircraft orders still to be fulfilled. There will be some major casualties . . . I will book by credit card from now on for the extra protection it gives.