As Swine Influenza continued to claim lives in Mexico and other parts of the globe, the International Air Transport Association (IATA) has said it has significantly affected the aviation sector and its timing could not have been worse.
Observing that IATA was working with World Health Organisation to ensure an efficient response of the industry to the pandemic, its CEO Giovanni Bisignani said "anything that shakes the confidence of passengers has a negative impact on the business."
Though it was still too early to judge the impact of Swine Flu on the industry's bottom line, he said it was sure that anything shaking passenger confidence has "a negative impact on the business. And the timing could not be worse given all of the other economic problems airlines are facing."
Besides swine flu, Bisignani said the industry was facing many challenges as "recovery in the air transport sector rests on rise in consumer confidence and consumer spending. Shedding debt will be a major headwind."
Asserting that the challenge for the governments was to "turn stimulus funds into spending that fuels trade", he asked the government to move forward with liberalisation "particularly of the archaic ownership restrictions that prevent cross-border access to capital and consolidation."
"Air transport is an economic catalyst and can play an important role in driving recovery, but only if we are financially sound. Access to global capital and the freedom to consolidate would go a long way in shoring up this industry without government bailouts," said Bisignani.
His statement came as latest IATA figures showed that passenger demand had fallen in March by over 11 per cent compared with that in the same month in 2008. Airlines cut overseas passenger capacity by 4.4 per cent resulting in an average load factor of 72.1 per cent. This is 5.4 percentage points below the average load factor recorded in March 2008.
The region which experienced the worst decline in passenger traffic was Asia-Pacific which once led the growth in the aviation sector as was witnessed in India and China.
Airlines in Asia-Pacific continued to lead the fall with a 14.5 per cent dip in passenger demand, outstripping a 9.3 per cent downward adjustment in capacity. The region was particularly impacted by the fall-off in long-haul travel, which IATA said, was contracting faster than short-haul.
"The global economic crisis continues to reduce demand for international air travel," the IATA Director General and CEO said, with the organisation estimating that international revenues in March will be impacted by a decline of up to 20 per cent.
As per the figures, North American airlines saw a decline in international passenger demand of 13.4 per cent, followed by those from Europe falling by 11.6 per cent. The carriers in the Middle East were the only ones to experience growth in March of 4.7 per cent, it stated.
