Industry Group Says 2009 Worst Year for Airline Demand

Airlines suffered the worst-ever fall in passenger demand in 2009, hampering their chances of early recovery and making another year of heavy losses all the more likely, an industry group said Wednesday.

Passenger demand dropped 3.5 percent last year, with companies struggling to fill more than three quarters of available seats on average flights, the International Air Transport Association said. Freight demand fared even worse, falling 10.1 percent year-on-year and filling less than half available capacity, the group said.

"In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen," said IATA Chief Executive Giovanni Bisignani.

"We have permanently lost 2 1/2 years of growth in passenger markets and 3 1/2 years of growth in the freight business," he said.

IATA restated its earlier estimate that the industry will lose $5.6 billion in 2010.

The fall in demand slowed toward the end of the year, partly as a result of airlines slashing flights to avoid overcapacity, but yields remained 5-10 percent below 2008 levels, IATA said.

"Revenue improvements will be at a much slower pace than the demand growth that we are starting to see," said Bisignani.

He said 2010 would be "another spartan year" for the industry, marked by careful capacity control and cost reduction.

Fresh calls to increase security following the Dec. 25 attempted airline bombing in the United States will put additional pressure on the industry, Bisignani said, adding that governments — not airlines — should pick up the bill.