Air passenger growth slows to 5-year low

A report by the International Air Travel Association (IATA) has revealed that global airline passenger growth has slowed to 3.8% in June. This represents the slowest rate in five years.

The IATA recently warned that the airline industry faced a grim outlook and passenger numbers would be affected by surging fuel costs and the deteriorating economic situation.

The IATA added that the situation will deteriorate and the airline industry could see losses of £3 billion this year.

According to the IATA’s report, the volume of freight traffic fell in June, down 0.8%, the first decline since May 2005 due to falling confidence from manufacturers.

The organisation represents around 230 airlines operating nearly 95% of international air traffic. Domestic flights are not included in its report.

This weekend, chairman of British Airways (BA), Willie Walsh, warned that airlines will go bust this year as a result of rising fuel costs.

Ryanair’s chief executive, Michael O’Leary, also recently warned that most of Europe’s airlines will go bust if oil prices remain high.

As a result of high fuel costs, Australia’s flagship carrier, Qantas Airways, recently announced it was slashing 1,500 jobs.

25 airlines have gone out of business this year including ATA Airlines, Aloha Airgroup, Skybus Airlines and Silverjet.

EOS and Maxjet revealed they would cease flying in May while Delta Air Lines, which is merging with Northwest Airlines, recently announced it would cut 2,000 jobs and reduce its capacity by 10% from 2008 levels year-on-year.

BA last week confirmed it would ground 20% of short-haul flights with the majority being at London’s Gatwick airport.

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