"The deterioration in traffic is alarmingly fast-paced andwidespread," says ATA director general and CEO Giovanni Bisignani."Even the good news that the oil price has fallen to half its Julypeak is not enough to offset the impact of the drop in demand. Atthis rate, losses may be even deeper than our forecast of $5.2billion for this year."

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The IATA reports the freight declines have slowed year-to-dategrowth to 0.1%, with all regions except the Middle East and Africareporting negative results. It says Asia Pacific carriers, thelargest players in the market, suffered the most serious drop at10.6%, while European and North American carriers, which had seenflat growth through August, saw cargo traffic fall 6.8% and 6%,respectively.

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"The industry crisis is deepening - along with the crisis in theglobal economy," observes Bisignani. "Airlines, like all otherbusinesses, are facing enormous challenges. But unlike othercompanies, they are denied some basic commercial freedoms such asaccess to markets and to global capital that could help them managetheir business in this difficult time."

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He notes that the web of 3,500 bilateral air service agreementsthat govern international air transport denies market access exceptin rare cases. In addition, he says the ownership clauses in theseagreements preclude mergers across borders.

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"Look at what the banking industry is doing," he says. "They aretaking government handouts. They are accessing global capital. Andwe have seen mergers without anybody asking to see the investors'passports. Airlines are not asking for handouts. But today's crisishighlights the need for airlines to be able to run their businesseslike normal global businesses."

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In response to the deteriorating conditions, IATA has takensteps to facilitate a discussion among 15 major governments on thefuture regulatory structure of international air transport. Theorganization circulated a paper examining solutions within thebilateral system that could be quickly implemented to expandopportunities for access to markets and global capital.

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"I hope that the Agenda for Freedom Summit will conclude as asuccessful discussion that sparks a process of change bygovernments," says Bisignani. "We are not asking for anything otherthan the basic freedoms to do business that other industries takefor granted."

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