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Economic Outlook

The extent and speed of the deterioration in major economies and international trade became apparent during the early part of 2009. Falls in industrial production at the end of 2008 of 15-30% in many major economies were unprecedented; the steepest economic decline since the 1930s. Exports of some goods had fallen by more than 50% for a number of economies.

The international airline industry is highly exposed to such fluctuations and air cargo is usually impacted first, as manufacturers and retailers are fast to cut inventory and shipments by air. By March, international Freight Tonne Kilometres (FTK) were more than 21% lower than a year earlier. Passenger travel was slower to be impacted, but business travel- so important for profitability- was cut. By February, the number of passengers buying premium tickets had fallen more than 21% below year earlier levels.

The outlook for 2009 is for a year just as challenging as 2008. The worst of the decline in revenues, due to the recession, may already have occurred in the early months of this year. However, even if a floor has been reached, and there is no certainly about that yet, a recovery is still some way off. Most economic forecasts for 2009 now project a 13% decline in world trade and a 2-3% fall in global GDP (Gross Domestic Product).

Read more about the Financial Forecast (pdf)

All operations have to adjust to this environment. The Safety, Operations & Infrastructure division of IATA is working with all members to support them to survive this critical time.

H1N1- Influenza

The Influenza (A)H1N1 is causing additional revenue losses to the airlines as traffic in the Mexican markets is severely curtailed and there are potential additional negative effects on other markets as the disease spreads to other countries. The impact remains highly uncertain. The closest parallel is SARS which, in 2003, led to traffic falling 50% for Asia Pacific airlines in the months after the outbreak of the disease. Six months later, traffic had recovered to pre-SARS levels but 8% of the year’s revenue passenger-km (RPK) and USD 6 billion revenues were lost for those airlines. Industry-wide, the revenue loss from SARS was around 2% in 2003.

IATA’s initial responses to the H1N1 influenza outbreak included:

• Close coordination with the WHO and ICAO to coordinate the international response, including the issuance by both organizations of statements clarifying there is no reason to impose restrictions on travel
• Provisions of guidance material and template emergency response plans and checklists to member airlines
• Creation of a central repository of government restrictions
• Active lobbying campaign to persuade governments not to impose travel restrictions- and to have such restrictions removed where they have been imposed
• Active media campaign to calm the fears of passengers
• Activation of IATA’s own emergency response plans to ensure business continuity across our operations

More information on Influenza (A) H1N1