First-quarter 2009 global airline industry losses in aggregate have totaled $1 billion so far, in line with expected full-year losses of $4.7 billion, IATA said in a “Financial Monitor” released Friday, noting that “airfreight appears to have bottomed out but passenger travel continues to shrink, particularly premium.”
Results released to date reveal “varied” performance, the organization said, commenting that US airlines benefited from “early capacity cuts” while carriers outside the US are reporting “larger Q1 losses.” Excluding Delta Air Lines and Northwest Airlines, ATWOnline calculated that the eight largest US carriers lost $1.07 billion in the 2009 first quarter, improved from a $1.26 billion loss in the 2008 first quarter. DL/NWA results are skewed in both periods by merger-related expenses and goodwill charges that make comparison difficult.
IATA pointed out that efforts to resize capacity “lag further behind demand cuts, causing load factors to fall sharply.” ASKs in international markets were reduced a further 4.4% in March, “far behind the 11.1% slump in demand.” While airlines in Asia have slashed capacity the most, Middle East and Latin America carriers are still growing ASKs. Capacity cuts are generally a result of lower utilization of aircraft as fleets expanded on 210 new deliveries in February and March while there was “no further parking of older aircraft.”
The organization noted that “December seemed to mark a low point for a number of economic indicators.” Per-barrel crude oil prices have edged above $50 after hitting a low of just under $40 in December and air cargo demand as measured in FTKs has “moved sideways since hitting the December low.”
But the passenger traffic decline has not found a floor year yet, IATA warned, pointing to a 9.1% dip in international RPKs in the 2009 first quarter compared to the year-ago period. Exacerbating the drop was eroding premium traffic; first- and business-class ticket sales were down 20% year-over-year in March.
The organization said that financial markets started to anticipate an airline industry recovery in April, pushing share prices up 15% before “fears over swine flu” started to dampen the markets’ “degree of optimism” for airlines, IATA said.
(ATW)