Even as the financial crisis in the aviation sector has taken a heavy toll on the passenger traffic growth rate in India, the global body of airlines IATA has warned that the worst was yet to come.
The number of passengers handled by all Indian carriers registered a whopping fall of minus 13.7 per cent, as per the latest figures of gross domestic product for the second quarter (July-September) of 2008-09, released by the government. However, the amount of cargo carried by the aviation sector grew modestly by 5.7 per cent over the second quarter of 2007-08, the figures showed.Commenting on the declining traffic, IATA CEO and DG Giovanni Bisignani warned, "The gloom continues and the situation of the industry remains critical. . . The slight slowing of decline in passenger traffic is likely to be temporary and the deepening slump in cargo markets is a clear indication that the worst is yet to come."
In its monthly traffic data, the International Air Transport Association also painted a 'gloomy' picture of the scenario facing the global aviation industry, saying recession was 'now the biggest threat' to its profitability. The Asia-Pacific carriers, which represent 31 per cent of the global passenger traffic, has seen a fall of 6.1 per cent. The reduction in capacity undertaken by airlines of this region by 2.3 per cent "could not keep pace with the drop in demand, taking load factors for the region's carriers to 72.2 per cent," IATA's figures for October showed.IATA chief Bisignani said the year-to-date growth for Asia-Pacific carriers fell to 0.3 per cent, 'the weakest outside Africa', where all airlines put together recorded the 'largest decline' as international traffic carried by them fell by 12.9 per cent in October.
The airlines of only the Latin American and West Asian regions recorded a 4.5 and 3.5 per cent growth respectively, while those in North America experienced a marginal growth of 0.8 per cent and in Europe by 1.8 per cent. On the cargo sector, Asia-Pacific carriers, which account for 44.7 per cent of the global cargo market, saw global traffic decline by 11 per cent, 'reflecting a sharp drop in the region's exports,' IATA said. However, the Indian government's latest GDP data for July -- September this fiscal showed that cargo handled by the civil aviation sector grew by 5.7 per cent. While the Latin American carriers experienced a fall of 11.4 per cent, IATA said the cargo traffic for North American, European and West Asian carriers fell by 7.6, 5.4 and 1.00 per cent respectively. Asserting that the airlines were 'not asking for handouts', Bisignani said commercial freedom, efficiency and a 'fair treatment in taxes' were what was needed by them."We need commercial freedoms to run this (airline business) as a normal business. ... We need efficiency everywhere. . . .And we need common-sense in taxation. But plugging budget gaps with gratuitous travel taxes is bad policy that is not sustainable. This must change," the IATA chief said.
