Freight volumes on the decline

Global - A global traffic data for the month of June has been released by the International Air Transport Association (IATA) showing a continued decline on growth in air transport.

Passenger demand growth fell to the lowest in five years at 3.8%, while passenger load factors dropped to 77.6%. Cargo too contracted by 0.8% when compared to the same period last year.

Global passenger traffic growth fell to 3.8%, well below the 5.4% yearly record. Capacity growth of 5.5% also outstripped demand, tipping the passenger load factor down to 77.6%

On the other hand, international cargo freight traffic declined by 0.8% in June. This is the first decline seen since May 2005 and is a build-up of diminishing confidence over several months in the manufacturing sector.

Giovanni Bisignani, director general and CEO of IATA said, "The global economic turbulence clearly shows in the 0.8% drop in freight volumes compared to last year. Although the passenger demand grew by 3.8%, this is the slowest growth that we have seen since the industry was hit by the SARS crisis in 2003. With consumer and business confidence falling and sky-high oil prices, the situation will get a lot worse.

"With consumer and business confidence falling and sky-high oil prices, the situation could get a lot worse. Bisignani added, "The airline sector is in trouble. Losses this year could reach US$6.1 billion, more than wiping out the US$5.6 billion that airlines made in 2007. Falling demand and rising costs are reshaping the industry."