First half traffic figures for the industry were every bit as bleak as anticipated, as carriers across regions and sectors alike struggled to cut capacity fast enough to match steep declines in demand
As fast as airlines have been cutting capacity, for most it has not been fast enough to match the sharp fall in passenger traffic. First half numbers for the major operators in the Americas, Europe and Asia demonstrate the extent to which passenger traffic has fallen and load factors are down. And traffic is only half the picture. Add in falling yields and fares, and the drop-off in the premium travel sector in particular, and it is clear why the airline sector is in crisis.
The figures across the regions tell their own story. European network carrier passenger traffic slumped across the board, in stark contrast to the growth experienced by most of them at the halfway point of 2008. Some budget and regional carriers, such as Norwegian and Air Baltic, did see growth in the first six months. But in all but a handful of instances for European carriers, traffic failed to keep pace with capacity. The result has been falling passenger load factors for most.
It was a similar story in the first half in the USA. While the US majors were among the first to scale back capacity last year, only the cuts at Alaska Airlines and US Airways were deep enough to continue to keep pace with falling traffic levels during the first half of this year. The result for most of the US majors were falls in passenger load factor ranging up to two points.
The picture was even more stark among North American regional carriers, as traffic and load factors slumped in the first half. Echoing the European budget carriers, there was some growth among US low-cost carriers, while both AirTran and Southwest managed to achieve higher load factors as capacity cuts outstripped lower traffic volumes.
The stand-out US performer in the first half, albeit from a smaller base, is fast-growing niche carrier Allegiant Air. The Las Vegas-based operator, which launched 13 new routes from its developing Los Angeles base during the second quarter alone, increased traffic nearly a fifth over the first six months of the year and boosted load factor 2.5 points. This has been achieved while stretching its run of profitable quarters into the first half of this year.
Passenger traffic in the first halffell sharply across most Asian network carriers. But a notable exception were major Chinese carriers. Air China, China Eastern Airlines and China Southern Airlines all boosted traffic in the first six months of the year, as Chinese carriers were bolstered by strong domestic demand. However of these only China Southern managed to translate this into increased passenger load factors.
Source: Airline Business
