Moreover, the IATA points out that air freight volumes experienced their first significant month-to-month improvement of 2009 in May, and IATA surveys of purchasing managers indicate the possibility of further improvement in air freight demand in June and July. Levels for those months are forecast to be only 12% to 15% below the same periods last year.
Nonetheless, the organization warns air freight companies and their landlords not to look on the changes as a sign the recession is ending. It says inventories that remain 10% to 15% higher than normal in relation to sales indicate a significant recovery is not expected in the near term. "We have lost several years of growth and yields are under severe pressure," says IATA director general and CEO Giovanni Bisignani. "Airlines are in survival mode. Cutting costs and conserving cash are the priorities."
According to the organization, May showed little geographical variation among markets. Latin American carriers were hardest hit, with traffic down 21%, followed by Africa at 20%, Europe at 19.2% percent and North America at 18.8%. The Middle East market fared by the best, with traffic declining only 3.7% on a year-over-year basis.
For some individual airports, May was even worse than for the industry in general. For example, a report from Brussels Airport, which ranked sixth in Europe last year, reveals its cargo traffic plunged 41.3% percent in May compared to the same month a year ago. The May decline left overall cargo traffic at Brussels Airport down 45.8% percent for the first five months of the year.
Despite the overall air cargo declines, June reports from some individual European airlines suggest the situation may be improving. Air France-KLM, Europe's biggest cargo airline, says freight traffic was down a mere 0.4% from June '08. This was the second month in a row to see only nominal decline on a year-over-year basis. In its worst performance, Air France-KLM's freight traffic plummeted 23.2% in January. British Airways is also experiencing smaller year-over-year declines, with cargo volume in June down only 9.8% from a year earlier. The airline's freight traffic was down 9.5% in May and 14.8% in April.
When recovery does come, Bisignani says the air freight industry will look considerably different than it did at the height of the recent boom. Among the changes will likely be demands for lower rents and fees. "It is difficult to see a return to business as usual," he remarks. "This crisis is re-shaping the industry. The burden cannot be placed on airlines alone. All partners in the value chain must be prepared to change—reducing costs and improving efficiencies. Too often we get the opposite. Already this year we have seen $1.5 billion in cost increases from airports and air navigation service providers. It's irresponsible in the best of times and a completely unacceptable abuse of monopoly position in a crisis."
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