Worldwide demand for air travel grew 3.8% in June, the slowest growth that airlines have seen since the SARS crisis in 2003, according to IATA’s international traffic data for the month.
The passenger load factor dropped to 77.6%, 1.2 points below the 78.8% recorded for June 2007.
“With consumer and business confidence falling and sky-high oil prices, the situation will get a lot worse,” said Giovanni Bisignani, IATA’s director general and CEO.
North American airlines saw demand growth drop to 4.4%, sharply down from the 8.2% growth recorded in May. U.S. domestic traffic contracted nearly 4%.
Demand growth dropped to 2.1% for European airlines, compared with 4.1% in May. Declines in business confidence and industrial production in key European cities may drive down demand growth further, said IATA.
IATA said Asia Pacific airlines saw international passenger traffic growth fall to 3.2% in June, down from 4.5% in May. The decline was influenced by weakening economies and inflation concerns, IATA said.
Traffic growth for Middle Eastern carriers was 9.6% June, down from 12.8% in May and sharply down from the 18.1% recorded in June 2007.
Latin American carriers turned in the strongest performance with 12.5% growth, said IATA, boosted by strong, commodity-driven economic growth in the region.
“The airline sector is in trouble,” Bisignani said. “Losses this year could reach $6.1 billion, more than wiping out the $5.6 billion that airlines made in 2007. Falling demand and rising costs are re-shaping the industry.
“To survive the crisis, urgent action is needed. Airports and air navigation service providers must come to the table with efficiencies that deliver cost savings. Labor must understand that efficiency is the only path to job security. And governments must stop crazy taxation and give airlines the freedom to merge and consolidate where it makes business sense.”