Air freight nosedives

The latest international air traffic figures for October have shown air cargo traffic shrank by eight per cent for a fifth consecutive month of severe drops.

According to the data released by the International Air Transport Association (IATA), air traffic experienced yet another month of global decline.

While the fall in passenger traffic has slowed, declining by 1.3 per cent compared to the 2.9 per cent fall recorded in September, the cargo sector continued its steep deterioration.

“The gloom continues and the situation of the industry remains critical,” IATA CEO Giovanni Bisignani said.

“While the drop in oil prices is welcome relief, recession is now the biggest threat to airline profitability.

“The deepening slump in cargo markets is a clear indication that the worst is yet to come,” he said.

The biggest contributors to the dismal fall were the Latin American and Asia-Pacific markets with the declines of 11.4 per cent and 11 per cent respectively.

The IATA said forecast declines in key air cargo sectors such as semi-conductors meant weakness was expected to continue.

The woes have worsened as Thailand’s Suvarnabhumi airport recently discontinued its cargo services, increasing frustration for importers and exporters.

The disruption in Thailand is expected to further hamper the air cargo sector, as the regional cargo hub handles an extensive network of just-in-time electronics with an estimated export throughput of USD 40 billion per year.

Figures from the Association of Asia Pacific Airlines (AAPA) also backed the grim conditions for the sector, with international cargo traffic showing a continued sharp decline in a pre-holiday peak season for freight handlers.

The AAPA said despite a 7.5 per cent cut in cargo capacity, the average international cargo load factor for October fell 2.6 percentage points to 65.4 per cent.

AAPA director-general Andrew Herdman said airlines worldwide were facing “extremely difficult market conditions, with expectations of even tougher times ahead in 2009.”

Mr Bisignani again urged governments to grant the beleaguering airline industry more commercial freedoms.

“As the global economic downturn re-shapes the world’s financial industry, policy makers must also understand that change is needed in air transport.

“Unlike the finance industry, airlines are not asking for handouts. Commercial freedom, efficiency and a fair treatment in taxes are needed.

“Air transport is a catalyst for economic growth. But plugging budget gaps with gratuitous travel taxes is bad policy that is not sustainable. This must change,” he said.

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