The prediction comes on the heels of a 7.9% freight volumedecline in October compared to the previous October. The declinewas the steepest monthly fall in eight years and the fifthconsecutive month of what the organization labeled "increasinglysevere drops."

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"The deepening slump in cargo markets is a clear indication thatthe worst is yet to come," says IATA director general GiovanniBisignani. "The gloom continues and the situation of the industryremains critical."

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The October decline was particularly steep for Asia-Pacificcarriers, which handle 45% of world air-cargo volume. They sufferedan 11% decline for the month, as did Latin American carriers. NorthAmerican and European airlines reported smaller drops of 7.6% and5.4%, respectively, while African carriers actually saw volume rise3%. Middle East operators also showed an increase of 1%.

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Though the October decline was steep, reports from individualcarriers suggest November might be worse. Europe's largest airfreighter, Lufthansa Cargo, reported a 9.8% year-over-year cargovolume drop in November primarily due to pared shipments on keyAmericas and Asia-Pacific networks. The German company's revenueswere off 6.7% and the load factor, or capacity utilization, fell6.5 points to 66.4%. The continent's number two carrier, AirFrance-KLM, reported a 13.2% drop for the month, while number threeBritish Airways showed a 7.2% decrease. At Lufthansa, cargo trafficfor the first 11 months was 4.7% below last year's levels.

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Many people within the industry had hoped the fall in oil priceswould translate to a boost in cargo volumes, but the globaleconomic crisis appears to have more than offset any benefit gainedby lower fuel costs. "While the drop in oil prices is welcomerelief, recession is now the biggest threat to airlineprofitability," observes Bisignani.

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According to the IATA exec, the macro economic situation hasbecome the dominant factor driving both air freight and passengerloads. Though cheaper fuel and excess capacity have pushed costsdown, reduced product and commodity demand has led to reductions inair cargo needs, while income loss or fears of income loss havereduced passenger travel. The organization projects airlines willlose $2.5 billion next year.

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In regard to the coming year, IATA expects North America to behit especially hard, with a 4.8% drop in cargo volume, followed byEurope with a 3.6% decline and the Asia-Pacific region with 2.5%.The organization projects increasing volumes only in the MiddleEast, with a 1.2% growth in volume forecast. African volumes areexpected to remain static.

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