Economic Gloom Continues in January Traffic
International passenger demand fell by 5.6% in January 2009 compared to the same month in 2008, according to figures released this morning by the
International Air Transport Association which noted that the results are a full percentage point worse than the 4.6% year-on-year drop recorded in December. The January fall in demand is the fifth consecutive month of contraction.
The 5.6% drop in passenger demand outpaced capacity cuts of 2.0% driving the load factor to 72.8% - 2.8% below what was recorded for January 2008.
The alarming collapse in cargo markets in December (-22.6%) worsened in January 2009 with a 23.2% year-on-year demand drop, said IATA. This is the eighth consecutive month of contraction for freight traffic.
“Alarm bells are ringing everywhere,” said Director General and CEO Giovanni Bisignani. “Every region’s carriers are reporting big drops in cargo. And, aside from the Middle East carriers, passenger demand is falling in all regions. The industry is in a global crisis and we have not yet seen the bottom. The only good news is that fuel prices remain well below last year’s level. But the drop in demand is much more harmful. The industry is shrinking with revenues expected to fall by US$35 billion to US$500 billion, delivering a loss of US$2.5 billion this year.
“Airlines remain in intensive care,” he continued, “but while others ask for government bailouts, our demands on governments are much more modest. First, don’t tax us to death in order to pay for investments in the banking industry. This includes the UK government’s plans to increase its multi-billion pound Air Passenger Duty and the Dutch Government’s misguided departure tax. In 2008, even as governments delivered tax breaks to stimulate economic growth, the airline industry took on an additional tax burden of US$6.9 billion. Second, give airlines the commercial freedoms that every other business takes for granted. With the world’s capital markets in disarray, archaic ownership restrictions are an unnecessary burden that must be lifted. Today’s crisis highlights the need to change the structure of this hyper-fragmented and fragile industry.”
Passenger
• Asian carriers led the decline in passenger demand with an 8.4% year-on-year drop in January. While this is slightly better than the 9.7% contraction in December, this is positively skewed by Chinese New Year which fell at the end of January 2009 (and which was in February the year before). Capacity in the region contracted 4.3%. With Japan, the region’s largest market for air travel, expected to see its economy contract by an unprecedented 5% in 2009, the prospects for traffic in the region remain dismal.
• North American carriers posted the second largest passenger decline at 6.2% led by a decline in Trans-Pacific travel. In response, carriers withdrew 2.6% of their international capacity, clawing back some of the expansion of 2008.
• European carriers offset a 5.7% decline in demand with a 3.6% decrease in capacity. Demand decreased sharply from the 2.7% fall in December as European economies move into deep recession.
• Latin American carriers saw a modest decline of 1.4%. Even against a 0.5% increase in capacity, the region turned in the highest load factors at 74.9%.
• African carriers saw the demand decline slow from an average 4.0% in 2008 to 2.6% in January.
• The Middle East was the only region with a positive traffic growth of 3.1%. This is far below both the double-digit traffic growth in 2008 and the 10.8% expansion in capacity.
Cargo
• Asia Pacific carriers, representing 43% of the market, led the cargo decline with a 28.1% year-on-year drop. This was followed closely by the other major market players: European carriers (-23.0%) and North American carriers (-19.3%).
• While this may appear to be relatively stabilised compared to the precipitous December drop, it is too soon to call a bottom in the air freight market. Manufacturers are still shedding inventory and cutting production which is expected to lead to further falls in freight volumes.
American Joins Climate Leaders
American Airlines became the first major airline to join a business/government coalition designed to develop and implement environmentally friendly business.
Climate Leaders is a collaboration of business and the EPA to develop comprehensive climate change strategies. Members commit to reducing their impact on the global environment by setting ambitious greenhouse gas reduction goals to be achieved over the next 5 to 10 years and reporting their progress to the EPA annually.
"Our decision to join the Climate Leaders program is the latest step in a long-standing commitment by American Airlines to help safeguard Earth's environment," said Peggy Sterling, Vice President - Safety, Security, & Environmental. "We will not waiver in our commitment to reduce our impact on the environment."
"We are pleased to welcome American Airlines into the Climate Leaders program," said Kathleen Hogan, Division Director of EPA's Climate Protection Partnerships. "We look forward to working with them as they establish a climate strategy and work to reduce their carbon footprint."
American has committed to a 30 percent reduction in greenhouse gasses by 2025 and will work closely with Climate Leaders to set a mid-range goal to help meet this long-range target.
Over the past few years, American has initiated many programs to reduce its environmental footprint.
For example, it has:
• Implemented initiatives that reduce fuel consumption by 111 million gallons annually as part of its Fuel Smart initiatives, thereby reducing greenhouse gases;
• Purchased new
Boeing 737-800 jets to replace older MD-80 aircraft, which will further reduce emissions by 35 percent per seat mile;
• And reduced electricity usage by increasing office temperature during summer months, retrofitting lights with more energy-efficient bulbs, and rewrapping pipe insulation.
GoJet Orders Six CRJ 700s
GoJet was confirmed to be the latest regional airline to order the Bombardier CRJ 700, when
Bombardier announced an order for six which had previously been on its order-book as an unnamed customer. The order, valued at US$207 million, includes 10 options which were previously announced last March. The airline, also known as
Trans States, had asked to remain unidentified at the time of the order.
FBOs Progress in Thailand
Despite the economic downturn which has forced a decline in business flying worldwide, work continues apace to develop sophisticated fixed base operations in Asia with two planned for Thailand.
Airports of Thailand (AOT) and the
ASA Group have resumed negotiations to develop two VIP terminals in the country, one in Phuket and the other in the capital at Bangkok’s old airport – Don Mueang International Airport. The negotiations were disrupted over protests from the Peoples Alliance Democracy which seized control of several Thai airports, shutting down air transportation, stranding 3,000 passengers from around the world and costing the Thai economy millions of dollars.
The two state-of-the-art facilities would include the FBOs as well as business centers. “We handle so many private flights into both Bangkok and Phuket and it is apparent that the time is right to cater for our growing client base of VVIP visitors, who presently have nowhere in the airports to go once they disembark,” said ASA’s CEO Simon Wagstaff, whose company is a leading provider of elite travel, private aviation and security services for VIPs and discerning travellers in Asia Pacific.. “These facilities will accommodate the swelling ranks of VIP visitors to Thailand annually.”
The FBOs will offer aircraft operators, their passengers and aircrew a range of professional FBO services for business and private flights, including tailored solutions for VIP, diplomatic and large aircraft operations. The first purpose-built FBO facility in Bangkok will be strategically located near to the main runway with dedicated ramp parking. It will offer full handling facilities, plus VIP lounge and fuel provision. Future plans include teaming up with maintenance, repair and overhaul (MRO) services providers to offer maintenance facilities on site.
ASA will also offer VIP security services, non-scheduled business aircraft charter services, concierge services, over-flight and landing clearances, in-flight catering, aircraft marshalling, parking, fuel, aircraft valet, hangarage, security, customs and immigration, passenger and baggage handling, limousine transfers and hotel accommodation.
Phase 2 will start at Phuket International Airport, the most important gateway to Thailand’s premier tourist region.
Don Mueang International Airport (Old) Bangkok International Airport) closed in 2006 following the opening of Bangkok's new Suvarnabhumi Airport, becoming a facility for charter flights, military aircraft and domestic commercial flights. The airport is a joint-use facility with the Royal Thai Air Force's Don Muang Royal Thai Air Force Base. Besides travel by road, there is rail service connecting with Hua Lumpong station in the centre of Bangkok.
Phuket International Airport (HKT) is the gateway to Phuket Island, a tourist destination that was an epicenter of disaster during the tsunami that hit the country years ago. Phuket Island and nearby provinces are served by 10 airlines and handles around six million passengers, 41,000 flights and 12,000 tons of cargo per year. Following the 516-million-baht expansion of the international terminal completed in 2007, the airport can now handle up to 6.5 million passengers per year. The 5-billion-baht funding will cover the development plan for fiscal years 2009-2011.
British GA Joins Public Perception Effort
After
Cessna and
Hawker Beechcraft launched twin campaigns aimed at educating the public and legislators about the value of business jets, the
British Business and General Aviation Association announced a new theme for its annual conference on the value of general aviation to the British economy.
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Scheduled for March 3 in St. Albans, Herts, the organization called the program critical. Chief executive Guy Lachlan says: “It is more important than ever that we meet to create a cohesive industry voice as we are dealing with unprecedented economic downturn twinned with potentially destructive new legislation.” He adds that “it is imperative that the General Aviation industry we represent is more widely recognised as a valued economic engine for the British economy."
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