Airline demand suffered worst decline in 2009

Demand for airline seats fell 3.5% last year, making it the greatest decline the industry has seen, according to the International Air Transport Association. Airlines had a tough time filling 75% of available seats on average flights, IATA reports, and an early recovery, given the difficult conditions of 2009, is unlikely. For the freight sector, the situation was even worse: a 10.1% year-over-year decline, with less than half of all available capacity consumed.

Giovanni Bisignani, IATA’s chief executive, says, “In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen.” He continues, to USA Today, “We have permanently lost two years of growth in passenger markets and three years of growth in the freight business.”

IATA forecasts a $5.6 billion loss for the air transportation industry in 2010. Bisignani observes, “Revenue improvements will be at a much slower pace than the demand growth that we are starting to see.”