December 2009

IATA airline review: Airline performance began to improve in Q3 2009, after a poor Q1 and Q2.

Downsizing: IATA says airlines are cutting jobs & reducing capacity in response to a fall in first- and business-class traffic even as the economy recovers.

Recession end? IATA says that a move out of recession and stronger economic growth boosted airfreight, and air travel in Q3 2009.

Losses for 2009: IATA estimates an $11B loss for 2009 due to a 4.1% decline in air transport demand.

Losses for 2010: Airline losses in 2010 will total $5.6B, 47% above the $3.8B forecast in September due to oil prices rises and price competition.

Losses by region in 2010: Europe $2.5B, N. America $2B, Asia-Pacific $700M, Middle East $30M, African $100M, L. America $100M profit. 

Traffic demand in 2010: IATA says traffic may grow by 4.5% 2010 as the industry rebounds from the recession. 

Fares:  IATA says passenger yields (average fares) are a continuing disaster after falling 12% 2009 and will remain depressed in 2010.

Cargo rates: IATA says cargo yields are down 15 % in 2009. 

Revenues: IATA says global airline revenue will rise by 4.9% to $478B in 2010, below the peak of $535B in 2008.

Costs in 2010: Airlie costs such non-fuel items may decline by 1.3% in 2010 vs. 2009.

Fuel costs: IATA estimated that jet fuel would represent 26 percent of operating costs in 2010, twice the share in 2001- 2002.

Fuel prices: IATA predicts that Brent crude oil will average $75 p/b in 2010, vs. $61 p/b in 2009.

IATA's reports do not include many profitable low cost such as Air Asia, EasyJet, Ryanair and Southwest.

IATA – Who? A trade association that represents 230 airlines that carry 93% of international traffic

November 2009

ISTAT reports that there has not been a material pull back in new aircraft production by either Airbus or Boeing. (ISTATs Jetrader magazine, November/December 2009).

ISTAT reports that Airbus and Boeing produced a record 500 aircraft between them during the first half of 2009.

ISTAT notes that Airbus cancelled plans to increase A320 family production but will keep it at a steady rate of 34 per month.

ISTAT notes that Boeing has held its B737NG production steady at 31 per month.

ISTAT is unable to paint a very bright near-term picture for the aircraft commercial transport aircraft trading market.

ISTAT says that the key indicators are pointing in the wrong direction with the top ten as listed below.

ISTAT indicator 1: Unemployment remains on the rise in the U.S. and other countries.

ISTAT indicator 2: Businesses are still in cost cutting mode.

ISTAT indicator 3: U.S. airlines have cut their capacity to levels comparable to that seen immediately following 9/11.

ISTAT indicator 4: Airlines are losing money as IATA raises its airline loss forecast for 2009 by $2B to $11B.

ISTAT indicator 5: A jobless recovery in the USA makes it an open question as to when passenger demand will reverse its downward course.

ISTAT indicator 6: Deserts are quickly filling up with aircraft. UBS predicts a surplus of 1,400 jets in 2009 and AWAS is projecting 1,600 in 2010.

ISTAT indicator 7: The next 18 -24 months will prove to be the most difficult time for lessors.

ISTAT indicator 8: The downturn in aircraft values will continue.

ISTAT indicator 9: Further downward pressure will come on top of the fall in aircraft values.

ISTAT indicator 10: The 25 – 30% drop in values and lease rates already experienced on popular in-production used aircraft adds to lessor difficulties.

October 2009

About ATA

(Source ATA)

Founded in 1936, the Air Transport Association of America, Inc. (ATA) is the oldest and largest airline trade association in the USA, representing the nation’s leading airlines. Since its inception, it has played a major role in all the significant government decisions regarding aviation, including the creation of the Civil Aeronautics Board and the Federal Aviation Administration, the creation of the air traffic control system, airline deregulation, and recently with the aftermath of the 9/11 attack on America.

ATA is recognized by Congress, state governments, the Department of Transportation, the Federal Aviation Administration, the Department of Homeland Security, the Transportation Security Administration, the press and the public for its professional and accomplished representation of the industry. As ATA members chart their futures in an ever-changing market, ATA provides valuable expertise, guidance and assistance.

By working with members in the technical, legal and political arenas, ATA continues to lead industry efforts to fashion crucial policy and supports measures that enhance aviation safety, security and the vitality of our aviation system. ATA employs experts representing a wide range of industry disciplines, and provides an array of services to its members, including committees designed to deal with issues related to fuel, airports, engineering and maintenance, the environment, training, security, ground safety, medical issues and international affairs, among others. ATA airline members and their affiliates transport more than 90 percent of all passengers and cargo in the United States.

Mission

ATA serves its member airlines and their customers by assisting the airline industry in continuing to provide the world’s safest system of transportation; transmitting technical expertise and operational knowledge to improve safety, service and efficiency; advocating fair airline taxation and regulation worldwide to foster a healthy, competitive industry; and by developing and coordinating industry actions that are environmentally beneficial, economically reasonable and technologically feasible.

Goals

The association’s fundamental purpose is to foster a business and regulatory environment that ensures safe and secure air transportation and permits U.S. airlines to flourish, stimulating economic growth locally, nationally and internationally. By working with members in the technical, legal and political arenas, ATA leads industry efforts to fashion crucial policy and supports measures that enhance aviation safety, security and well-being. ATA goals include:

Championing the world’s safest transportation system

Protecting airline passengers, crewmembers, aircraft and cargo, working collaboratively with the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA)

Modernizing the U.S. air traffic management system via the Federal Aviation Administration (FAA) Challenging government policies that impose unwise regulatory burdens or impinge on marketplace freedoms

Reducing the disproportionate share of taxes and fees paid by airlines and their customers

Improving the industry’s ability to attract the capital necessary to meet future demands

Shaping international aviation policy to ensure that U.S. and foreign carriers can compete on equal terms

During its 70-year history, ATA has seen the airline industry grow from the small, pioneering companies of the 1930s into facilitators of the global economy. ATA and its members continue to play a vital role in shaping the future of air transportation.

ATA Reports Sharp Decline in Passenger Demand, Cargo Traffic

21 Percent Year-Over-Year

Drop in June Passenger Yield

is Sharpest in Decade

Mid-Year Update

WASHINGTON, July 20, 2009 – The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, reported that passenger revenue[1] fell 26 percent in June 2009 versus the same month in 2008 – the eighth consecutive month in which passenger revenue has fallen from the prior year.

The number of passengers traveling on U.S. airlines[1] in June fell 6.5 percent while the average price to fly one mile fell 20.7 percent, a sharp decline surpassing even those witnessed during the 2001 recession and post-9/11 terrorist attacks. Revenue declines extended beyond the mainland United States to the trans-Atlantic, trans-Pacific and Latin markets.

Compounding the softening demand for passenger travel, U.S. airlines[2] saw cargo traffic – as measured in revenue ton miles – decline 20 percent year over year in May 2009, marking the 10th consecutive month of declining cargo traffic. Notably, cargo traffic in the Pacific region fell 26 percent. June 2009 cargo data is not yet available.

The latest results continue to reflect the weak global economy and the lingering impact of the H1N1 (swine) influenza outbreak.

“Despite extreme price discounting, June data reflect ongoing weakness in demand for air travel. The airline industry remains fragile as this country continues to suffer from the worst recession since the 1930s,” said ATA President and CEO James C. May.

Annually, commercial aviation helps drive $1.1 trillion in U.S. economic activity and more than 10 million U.S. jobs. On a daily basis, U.S. airlines operate nearly 30,000 flights in 77 countries, using more than 6,000 aircraft to carry an average of two million passengers and 50,000 tons of cargo.

ATA airline members and their affiliates transport more than 90 percent of all U.S. airline passenger and cargo traffic. For additional industry information, visit www.airlines.org.

###

[1] Based on data reported to ATA by Alaska, American, Continental (incl. Micronesia), Delta (incl. NWA), JetBlue, United and US Airways; also includes data for Air Midwest, Air Wisconsin, Allegheny, American Eagle, Atlantic Coast, Atlantic Southeast, Chautauqua, Comair, Continental Express, Executive, Freedom, Horizon, Mesa, Mesaba, MidAtlantic, Piedmont, Pinnacle, PSA, Shuttle America, SkyWest and Trans States.

[2] Based on data reported to ATA by Aloha, Alaska, American, Continental, Delta (incl. NWA), FedEx, Hawaiian, JetBlue, Midwest, Southwest, United, UPS and US Airways.

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Headline News was last updated: December 16, 2009

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What is IATA?

IATA (International Air Transport Association) is an airline trade association that represents 230 carriers that carry 93% of all commercial passenger and cargo international traffic.

IATA's reports do not include many profitable low cost such as Air Asia, EasyJet, Ryanair and Southwest.