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IATA’s latest report on international traffic, for the month of April, continues a very gloomy tone, as growth slows across the world and load factors trend remorselessly downwards “the clearest sign that airlines have been facing a faster than anticipated slowdown since the start of the year.”
Load factors fell “significantly” in Apr-08. As the report notes, this is “also bad news for airline profitability since the 70% rise in crude oil prices to an average USD98 a barrel in Q108 will have raised break-even load factors substantially”.
Declining global passenger load factors 
Source: IATA
In Europe, the load factor picture is less attractive still, showing almost as steep a load factor fall for the month as the US.
And Europe more steeply than the average…
Source: IATA
The figures are distorted to some extent in comparisons with last year as a result of Easter falling in March in 2008. But the trend is unavoidable.
Growth is slowing faster than expected – just as fuel prices rise much faster than expected. Again, Europe’s growth rate has declined steeply by global standards.
Source: IATA
The crunch now comes, as new aircraft deliveries are set to intensify in coming months. If capacity increases as order books determine they should, then the softening in the bottom line will intensify. This is the time for tough decisions on cutbacks and aircraft grounding. And, for those where the damage hasn’t yet struck, a time to be evaluating whether to move pre-emptively.
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IATA: Europe business confidence falling in Apr-08; growth deteriorating sharply 
