Air Traffic Demand Down 1.1% In August, IATA Finds

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The International Air Transport Association (IATA) released a report Tuesday detailing the international scheduled traffic results for August, with the report showing a slowdown in the annual rate of decline in passenger demand.

According to the IATA, August passenger demand was down 1.1% compared to August 2008, which was a slight improvement over the 2.9% decline from July. Freight demand was down 9.6%, also an improvement over the 11.3% drop in July.

The report also found that, compared to August 2008, passenger load factors saw an overall improvement of 1.2% to 80.9%. Average fares continued downward, however, with fares for premium seats declining 22% and fares for economy seats down 18%.

To match capacity with demand, the IATA said, airlines have reduced daily aircraft utilization in recent months. As an example, the IATA noted that average daily hours for the global Boeing 777 fleet dropped by 2.7% to 11.1 hours per day through the first eight months of the year.

"Demand continues to improve, but profitability remains ever distant," said IATA CEO and General Director Giovanni Bisignani.

"Fares have stabilized, but at profitless levels. Meanwhile cost pressures are mounting from reduced aircraft utilization and rising oil prices," Bisignani added. "The industry is not out of the woods yet."

Further, the IATA found that, compared to the low point of March 2009, seasonally adjusted passenger demand has improved by 6%, but traffic levels remain 5% below May 2008, when the drop in demand began.

Meanwhile, compared to the low point of December 2008, seasonally adjusted freight demand has improved by 12% but remains exceptionally weak at 16% below April 2008, when the drop in demand began.

"Even with improving demand, there are few bright spots in the industry," Bisignani said. "This must point us to the need for some fundamental re-thinking. At the top of the list for change are the industry's antiquated rules of the game which restrict access to markets and to international capital."

The International Air Transport Association (IATA) released a report Tuesday detailing the international scheduled traffic results for August, with the report showing a slowdown in the annual rate of decline in passenger demand. (Market News Provided by RTTNews)