30 October 2008

Traffic Results Gloom

Surveying our standard surveys by every measure traffic is off. And off a lot. We were predicting 10% for the USA and the numbers are pretty close. All measures are now clear. The last quarter was just bad and it’s not getting better. What we see now is that the amount of lift has really plummeted but not enough to cope with the reduction in traffic. Here are some highlights.

Of the US hubs – Delta seems to be holding up in Atlanta but CVG has been savaged. NW is experiencing loss in MSP which is also loosing traffic from Sun Country. LA’s numbers surprised us by only dropping 5% which would seem to lend credence that there has been consolidation from the minor airports in the LA Basin. Orlando’s results must be worrying Disney.

In Europe numbers ex-UK are off driven by a general reduction but also steep drops with XL and Zoom carriers now eliminated.

Asia is no bright spot either – BKK, TPE and ICN all reported greater than 10% passenger drops. Beijing was up as a result of the Olympics but not by as much as could have or should have happened. HKG was down even Singapore showed a drop.

Where are the bright spots? Russia in Moscow and St Petersburg, Latin America, GCC and surprisingly Africa has been up.

We believe that this will result in further cutbacks across the board. Hoteliers are going to be very worried. The lack of lift is going to reduce capacity in many resort destinations. Christmas travel from Northern Europe will be a huge bust with Thailand suffering big time. The lack of charter capacity into the market is resulting in bookings being off around 20%.

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