Giovanni Bisignani: enormous challenges.

A combination of corporate travel bans, new technology and the financial squeeze on consumers has made for an extremely tough year for the airline sector.

And this has been reflected in figures recently released by the International Air Transport Association (IATA): 2009 saw the biggest decline in air passenger traffic in the post-war era, according to the trade body.

‘In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen,’ said IATA boss Giovanni Bisignani.

Passenger traffic dropped by 3.5% from a year earlier, while freight traffic fell 10.1% as the downturn hit demand. Despite some good news in December, with a rise in traffic of 1.6% compared with a year ago, 2010 is also set to be tough, IATA predicts.

Losses

It estimates that airlines collectively lost $11bn (£6.8bn) last year, and stand to lose a further $5.6bn this year. 

‘The industry starts 2010 with some enormous challenges,’ Bisignani declared.

‘The worst is behind us, but it's not time to celebrate. Adjusting to 2.5 to 3.5 years of lost growth means that airlines face another spartan year, focused on matching capacity carefully to demand and controlling costs.’

African airlines suffered the most in 2009, with passenger demand down 6.8%. Asia-Pacific and North American carriers saw demand drop by 5.8%, while European airlines suffered a 5% reduction.

Bright spots

But there were some bright spots: Middle-Eastern carriers saw passenger demand climb 11.3%, while Latin American airlines experienced 0.3% growth in demand.

Analysts said that price cuts designed to attract customers would continue to eat into airlines' profits and highlighted continuing over-capacity as problem for the sector.

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