Passenger numbers are being hit hard by the recession
The challenging economic conditions are forcing airlines to be realistic about their expected level of growth during their 2009/10 insurance policies, with average fleet values (AFV) predicted to rise by only 1% while passenger numbers are set to decline by 9%, according to Aon.
Based on insurance programmes placed so far this year, Aon’s Airline Insurance Market Indicators 2009/10 report said:
• Passenger numbers in North America are expected to fall by 15% during the 2009/10 policy period, while AFV will fall by 3%;
• Flag carriers expect the steepest declines in exposure, with AFV due to fall by 6% and passenger numbers by 13% as a result of the economic downturn putting pressure on business travel;
• Bucking the trend, growth in the Middle East is expected to continue, with a 15% increase in AFV coupled with a 17% growth in passengers. The rate of growth is significantly lower than in previous years however, and a significant proportion of the region's renewals have yet to be placed.
‘While some of the industry data is starting to look more positive, given the well documented decline in the number of business travellers, passenger number forecasts could be even more gloomy by the end of the year once more of the industry's major players have placed their 2009/10 insurance programmes’ commented Magnus Allan, Aon Global UK Aviation & Aerospace analyst. ‘The tension between the insurance markets needing to increase premiums and an industry that is suffering from the effects of the global economic downturn continues.’
