January-April 2005 Airline Passenger Traffic Up 8.7%

"Passenger traffic growth of 8.7% shows that demand for travel is strong. Slower cargo growth of 4.7% reflects a general slowdown in global economic activity. The real story, however, is the bottom line. The continuing extra-ordinary price of oil and increasing pressure on yields means that a speedy transition to a low-cost industry is critical," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).

IATA released traffic data to the end of April 2005 that shows capacity expansion in all regions for the first quarter was below traffic growth, maintaining load factors at 73.6% for the period. Freight expansion for the first four months was 4.7%. This reflects a rebound in April over weak results for February and March. Distortions due to holiday periods continue to make year on year comparisons difficult.

"While there has been some relief in fuel prices in the last weeks, the current levels are considerably higher than the US$38 per barrel of last year. This is the single biggest factor impacting our profitability. Efficiency across the industry's value chain is the only solution," said Bisignani.

Bisignani's remarks came as 700 top leaders of the airline industry prepare for the World Air Transport Summit and IATA's 61st Annual General Meeting to be held in Tokyo, Japan on 30-31 May 2005. The theme of the meeting is "En-route to a low cost industry".

"The World Air Transport Summit is an opportunity take stock of our achievements and plan future directions. Efficiency improvements by airlines have been impressive with 2-3% gains in each of the last two years and even more expected for 2005. Airlines are transforming their businesses with great speed. And, at an industry level, the IATA Simplifying the Business initiative will be a revolution in the way that people ship and travel—greater convenience and lower costs,"

"Our partners and governments are not changing with the same sense of urgency," said Bisignani. "Airports and air navigation service providers must share our obsession with costs. And governments must wake-up to the need for a new approach to the industry. As we celebrate the 60th anniversary of the benefits of a IATA and the global network system, we will send a clarion call for clear and common-sense measures to bring the industry back to health," added Bisignani.

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