Airlines Suffer Worst Hit Since World War II

New reports are now suggesting that airlines have just suffered their worst year since World War II in terms of air passenger traffic. According to the International Air Transport Association, passenger traffic dropped by 3.5 percent from a year earlier while freight traffic fell by 10.1 percent. This, of course, reverses years of steady growth.

The chief executive of the International Air Transport Association, Giovanni Bisignani, said that in terms of demand, 2009 goes into the history books as the worst year the industry has ever seen. The industry has permanently lost 2.5 years of growth in the passenger market and 3.5 years of growth in the freight business.

Despite the good news in December that showed a rise in traffic of almost 1.6 percent year on year, the International Air Transport Association warned that 2010 would be a tough year for airlines across the world. Mr Bisignani said that the industry starts 2010 with some enormous challenges. The worst is behind the airline industry, but this is not time to celebrate. Adjusting to 2.5 to 3.5 years of lost growth means that airlines face another hard year. The industry needs to focus on matching capacity carefully to demand and controlling costs.

The International Air Transport Association has already forecast that airlines will lose about $5.6 billion on a net basis this year after losing some $11 billion in 2009. Although this is a slight improvement the key point is that airlines are still going to lose quite a big deal of money again this year. Some airlines may not be able to hold out until the end of this massive downturn.