IATA Chart of the Week

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May 25, 2018 - See the mobile version: iOS and Android ... four of the five industry-wide 'recessions' since 1990 – th
IATA ECONOMICS’ CHART OF THE WEEK 25 MAY 2018 NO TWO PASSENGER MARKET SHOCKS ARE THE SAME Passenger market 'recessions' by airline region of registration* Gulf war

European recessions

9/11 SARS

GFC

Industry-wide Asian crisis

Asia Pacific

German reunification

European N. American Mid Eastern

S.American crises

Varig bankruptcy

L. American Ebola

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

African

Source: IATA

*Defined as two quarters of consecutive declines in RPKs



A recent chart of the week looked at where the next shock to industry-wide passenger traffic was likely to come from. While there is no obvious trigger on the horizon, financial market vulnerabilities are one key area to watch (link). This week’s chart shows how industry-wide recessionary episodes relate to the experiences at a regional level.



As can be seen, four of the five industry-wide ‘recessions’ since 1990 – those around the time of the Gulf War, 9/11, SARS, and the global financial crisis (GFC) – reflected widespread downturns in demand across most regions. The main exceptions are Middle Eastern airlines, who managed to avoid two consecutive declines in traffic during both the 9/11 and GFC shocks, and European carriers, who similarly avoided a ‘recession’ during the SARS pandemic. Clearly, a falling tide sinks all boats, although geopolitical and pandemic-type events are not easy or even possible to forecast.



However, there are also numerous examples of region-specific recessionary episodes, including the impact of Ebola on African airline passenger traffic in 2014 as well as the impacts of numerous economic shocks in Latin America in the late1990s and early-2000s. Such events disrupt regional passenger traffic and airline performance, but their impact on industry-wide passenger volumes differs depending on the severity of the shock and the relative importance of the region.



The key point is that no two crises are the same and that the origins of the next downturn may differ from those in the past. Given the ongoing eastward shift in aviation’s centre of gravity, a shock for Asian airlines, along the lines of that seen during 1997/98 for example, would have a much bigger impact on industry-wide traffic now than it did previously. Terms and Conditions for the use of this IATA Economics Report and its contents can be found here: www.iata.org/economics-terms By using this IATA Economics Report and its contents in any manner, you agree that the IATA Economics Report Terms and Conditions apply to you and agree to abide by them. If you do not accept these Terms and Conditions, do not use this report.

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