UPDATE 2-Air cargo jumps in Dec but aviation outlook tough -IATA

* Global air cargo traffic jumps 24 pct in Dec from yr ago

* 2009 deemed worst year in aviation history in demand terms

* Capacity, security challenges to persist in 2010

(Adds trade data from CPB institute)

GENEVA, Jan 27 (BestGrowthStock) – Air freight traffic jumped by
almost a quarter in December in a positive end to the aviation
industry’s worst year, showing economic recovery is picking up
steam.

However, the International Air Transport Association (IATA)
said the aviation sector would face a tough 2010 making up for
the lost demand in 2009 and handling new security demands.

“The industry starts 2010 with some enormous challenges. The
worst is behind us, but it is not time to celebrate,” IATA
Director-General Giovanni Bisignani said in a statement.

The slump in demand in 2009, the worst year in the
industry’s history, meant airlines would face another spartan
year adjusting to two-and-a-half lost years of passenger growth
and three-and-a-half years of lost freight growth, he said.

This would require airlines to focus on matching capacity to
demand and controlling costs, he said.

“In terms of demand, 2009 goes into the history books as the
worst year the industry has even seen,” Bisignani said.

IATA said air cargo traffic — a barometer of the strength
of world trade — in December was 24.4 percent higher than a
year earlier. Its load factor, an industry measure of capacity
utilisation, was 54.1.

But this year-on-year strength was exaggerated by an
unusually weak December 2008, the low-point in the cycle.

For 2009 as a whole, freight demand fell 10.1 percent — in
line with the World Trade Organisation’s forecast for the
contraction in global trade — for a load factor of 49.1.

Passenger demand rose 4.5 percent in December for a load
factor of 77.6, but for the year as a whole it fell 3.5 percent,
giving a load factor of 75.6, said IATA, which groups 230
airlines including British Airways (BAY.L: ), Singapore Airlines
(SIAL.SI: ), and Emirates [EMIRA.UL].

In a further sign of economic recovery, the Dutch CPB
institute said trade in the three months ended November was 5.7
percent higher than in the preceding three months — the biggest
increase since it started tracking trade data in 1991.

The more volatile monthly figures showed trade volumes rose
in November by 1.1 percent from October, when they increased by
an upwards revised 1.4 percent, but were still 12 percent below
their April 2008 peak, said the institute, whose trade data is
used by the World Bank and European Commission.

Bisignani said the aviation industry would have to face
tougher security requirements following an attempt to blow up a
U.S. passenger jet on Dec. 25.

Bisignani said global airlines were spending $5.9 billion a
year on security measures, which were the responsibility of
governments who should be picking up the bill.

IATA has forecast that airlines will lose $5.6 billion on a
net basis this year after losing $11 billion in 2009.
(For full IATA statement go to http://link.reuters.com/dym95h )

Stock Basics

(Reporting by Jonathan Lynn; Editing by Sharon Lindores)

UPDATE 2-Air cargo jumps in Dec but aviation outlook tough -IATA