Wednesday, December 30, 2009

Carriers fly high as traffic surges

New Delhi: Indian air carriers are reporting their busiest ever quarter with passenger traffic for the three months ending December 31 expected to surpass the October-December 2007 levels, indicating a revival in the industry. Airline executives say that while flights to metro cities saw a surge in traffic, leisure travel came as an added bonus.
This marks a strong comeback for the industry as air traffic had slumped since early 2008 due to slowdown and had deteriorated further due to the Mumbai terror attacks in November last year.
As per the data available with Directorate General of Civil Aviation (DGCA), in November, an estimated 40 lakh passengers travelled compared to 30.48 lakh in the same month last year. In October 2009 too 40 lakh passengers had travelled on airlines compared to 32 lakh passenger in the year ago period. These figures reveal that passenger traffic in October-November’09 has already surpassed the 2007 levels when 75.2 lakh people travelled.

This has lifted the overall passenger traffic for the year, which has been lagging since 2008. During January-November 2009, 400 lakh passengers travelled an increase of 5.45 % over same period in 2008. Airline companies say the pickup in air traffic over the last two months is due to increase in both business and leisure travel and would allow them to improve their financial performance as fuel cost has not swung too sharply during the last one quarter.
ingapore: Asian carriers are counting on an anticipated pick-up in economic activity in the region next year to help pull the aviation sector out of the doldrums.

While some airlines said they are starting to see signs of an upturn, industry watchers note that 2010 will be a challenging year.

2009 has been one of the most turbulent years for global airlines in history. The highly leveraged industry felt the impact immediately when credit markets froze - putting a squeeze on its operations.

Paul Ng, Global Head of Aviation, Stephenson Harwood, said: "The fact liquidity was scarce over this period impacts the airlines and the businesses that support the airlines with almost immediacy. So, they suffer very quickly and very deeply as a result of the credit crunch that started in 2008."

Global carriers have had to contend with a sharp drop in passenger and freight traffic which started with the global economic slowdown and was made worse by the H1N1 flu outbreak.

A recent report by the International Civil Aviation Organisation shows that world airline passenger traffic fell 3.1 per cent in 2009 making it the biggest drop in the aviation industry's history.

Total passenger traffic - both domestic and international - fell in all regions around the world, except for the Middle East, which posted a 10 per cent growth.

That took the attention away from volatile oil prices which fell from their peaks near US$140 a barrel to as low as US$40 before rebounding in the third quarter.

The roller coaster ride resulted in massive losses for carriers like Singapore Airlines which warned that it could record its first ever annual loss in its corporate history.