2008 and 2009 will go down into history books as one of the most devastating years in the world’s economic activity. The logistics industry was among the one hardest hit by the recession. Global air freight traffic saw decline not seen since the World War II.
According to the International Air Transportation Association’s recent statement, the situation is improving and it expects the trend to continue for several months to come. Despite this IATA has issued a warning not to be overly optimistic about the growth factor of 24.4% observed in December of 2009 over the previous year. Even given the increase, December 2008 has still been one of the weakest in history. Furthermore, if adjusted seasonally, in December shipments declined by 0.2% resulting in a capacity utilization of only 54.1%. Overall 2009 performance has been summarized as 10.1% decline in cargo volume compared to the previous year with an average load factor of 49.1%. Asia-Pacific carriers have contributed 60% of an increase in cargo traffic, but they still remained 8% behind their peak performance. Even though cargo capacity has been cut, an average cargo load factor was still at 66.1%.
The situation does not look better in the passenger transportation market either. AAPA reports 132.9 million passengers transported in 2009, which is 5.7% lower than 2008. According to Andrew Herdman the director general of AAPA, it has been the worst year for the association’s member airlines. He stated that investors should expect Asia-Pacific airlines to report a significant loss for the fiscal year of 2009.
Since Asian economic activity has weathered the global financial crisis much better than European and American economies, the outlook for Asian-Pacific looks significantly better. Due to the fact that Chinese economy continued to grow and Indian economic activity managed to remain relatively stable, AAPA expects 2010 to be fragile year but remains hopeful that emerging markets will be able to sustain economic growth, which will help airlines strengthen their balance sheets. European airline performance is much more disappointing compared to the Asian carriers. According to IATA, it is 20% lower than the previous year’s peak activity. Middle East and Latin American carriers showed more promise than EU, with volumes up by 7% and 21% compared to 2008 levels. Global passenger traffic was down 3.5% as expected. It represents the biggest decline since the World War II.
In his statement, Giovanni Bisignani, the director general of IATA, summarized the 2009 as one of the worst years in the industry’s history. He assessed the impact of the global recession as 2.5 years of growth lost in the passenger segment, that will never be recovered and 3.5 years growth lost in the freight segment. Even though the situation is difficult, it is somewhat improving. The global economy is on the road to recovery. Economic stimulus packages in China, Russia, EU and US have played a decisive role in sustaining the growth. Members of G20 have pledged to fight protectionism and implement measures to eliminate market barriers to encourage economic activity and create demand.
Above mentioned measures will most definitely have an enormous impact on the global economic activity and as the global economy will continue to improve so will the freight traffic around the globe.
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