The region’s largest market – Japan – is already in recession and its two main growth markets – China and India – are expected to deliver a major shift in performance. Chinese growth will slow as a result of the drop-off in exports while India’s carriers, which are already struggling with high taxes and insufficient infrastructure, can expect a drop in demand following on from the tragic terror incidents in November.
These worst fears are already being realised with freight traffic for Asian airlines plunging 11 per cent in October, the steepest drops for the carriers since 2001 and an unavoidable sign that the downturn is worsening.
The average cargo load factor for the month fell 2.6 percentage points to 65.4 per cent while passenger load factors fell 3.1 percentage points to 73.1 per cent.
The decline in freight tonne kilometres flown, measured by the Association of Asia Pacifc Airlines, was greater than the 9 per cent drop the group reported in September, and significantly it was a decline that came in a month when air carriers are normally ramping up for the peak Christmas shipping season.
The October decline marked the worst October for the carriers in terms of freight traffic since 2003, when carriers were suffering the fallout from the SARS disease outbreak that crippled air trade in Asia.
Carriers reduced capacity 7.5 per cent in October from a year ago, the deepest monthly cut in available space this year. The airlines have been scaling back flights in large numbers, including reductions in freighter operations, as demand has waned.