Figures published recently by the International Air Transport Association (IATA) show a continued slowing of demand for air transport.

Cargo traffic contracted by 1.9 per cent in July compared with the same month last year, while passenger demand growth fell to 1.9 per cent, the lowestfor five years. In June, cargo contracted by 0.8 per cent compared to June 2007,while passenger demand growth was 3.8per cent.

IATA also announced a revised industry financial forecast that would see the global airline sector post losses of US$5.2 billion in 2008 based on an average crude oil price of US$113 per barrel ($140 for jet fuel).

“The situation remains bleak,” warned Giovanni Bisignani, IATA’s director general and CEO. “The toxic combination of high oil prices and falling demand continues to poison the industry’s profitability.”

IATA also stated that as a result of the weaker economic outlook, the association had “significantly revised downward” its 2008 traffic forecasts for global domestic and international markets. Air cargo volumes are now expected to grow on average by just 1.8 per cent compared with the previous forecast of 3.9 per cent and passenger traffic by 3.2 per cent comapared with 3.9 per cent.

“This is only half the pace of expansion seen in 2007 and is boosted by the stronger growth seen at the start of the year,” said IATA. “Strong traffic growth allowed the industry to partly absorb the rise in fuel costs from 2003-2007. This is no longer the case.”

IATA stated that Asia Pacifi c carriers – the largest players in the cargo market – had been hit hard, with a 6.5 drop in demand. Figures for other regions were mixed, including Africa (+7 per cent), Europe (-1.2 per cent ), Latin America (-11.7 per cent ), Middle East (+12.9 per cent ) and North America (+4.4 per cent ).