Aviation industry’s woes deepened further as the air traffic touched its lowest in five years and Ryanair announced withdrawal from Spanish base over a dispute on costs.

Airline industry heralded global downturn after soaring oil prices led 30 airlines to bankruptcy. The latest traffic data from the International Air Transport Association (IATA) indicated that global downturn was turning heat on the industry.

Global traffic dropped 2.9% in September. According to IATA chief executive Giovanni Bisignani, alarmingly widespread and fast paced fall in traffic could lead to a bigger loss than £3.3bn deficit forecast this year.

A number of UK based carriers such as Zoom and Silverjet were grounded due to crippling fuel costs. Global recession was now posing a greater threat to the biggest airlines as passenger demand was falling sharply. The world’s highest revenue generating airline Air France-KLM also admitted that it would be very difficult for it to achieve its target of €1bn operating profit.

Bisignani warned that worst was still to come and the industry had a very difficult year ahead. He added that the increasing global economy crisis was deepening the industry’s crisis as well.

IATA informed that a proportion of sold seats per flight fell from 78.8% to 74.8%, confirming analysts’ apprehension that air lines were operating too many flights for too less passengers.

According to the chairman of CTAIRA consultancy, Chris Tarry, falling load factors were indication of excess capacity, the real issue for industry was how it could cut capacity speedily to keep up fares against market downturn.