First quarter passenger traffic up 9.4% - load factors high at 73.7%

First quarter passenger growth of 9.4% combined with a load factor of 73.7% is good news…

First quarter passenger growth of 9.4% combined with a load factor of 73.7% is good news. Carriers are successfully increasing fleet utilisation. This is particularly true in the North America where March load factors topped 81.1%. Nonetheless, with oil in the US$50 per barrel (Brent) range we are a long way from profitability, said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).

IATA released traffic data to the end of March 2005. Capacity expansion in all regions for the first quarter was below traffic growth, pushing load factors higher. Freight expansion was less impressive at 4.2%. While it is too early to identify a slowing trend in freight traffic, we need to watch this development closely over the coming months, said Bisignani. However you look at it, 2005 is shaping up to be another difficult year for the airlines. Intensified cost cutting and better aircraft utilisation are steps in the right direction. But they cannot keep pace with the increases in the industry`s fuel bill. From 2003 to 2004 the industry fuel bill rose by US$19 billion from US$44 billion to US$63 billion. At an average fuel bill of US$43 per barrel (Brent), the fuel bill for 2005 will exceed US$76 billionand even that seems conservative given today`s prices. Fundamental and large-scale change is absolutely critical, said Bisignani.

There is no silver bullet for the industry and there is no tolerance for inefficiency in the value chain. Airlines are doing their part by Simplifying the Business. One measure of progress is the rise in e-tickets issued by travel agents and processed through IATA`s settlement systems. From 19% in 2004 we are now over 26% for the first quarter of 2005. We are on track to meet our targets of 40% by the end of this year and 100% by the end of 2007. Airports and air navigation service providers contribute US$40 billion in costs to the industry. They have a vital role to play in delivering cost efficiencies to the industry. Similarly governments must liberalize ownership rules and let airlines operate like real global businesses. The situation is critical and we must move fast with our agenda for change, said Bisignani.

The agenda for change will form the basis of discussions at the World Air Transport Summit and 61st IATA Annual General Meeting. Over 600 aviation leaders will gather in Tokyo 29-31 May to discuss the future of air transport in these challenging times.

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Vicky Karantzavelou

Co-Founder & Chief Editor - TravelDailyNews Media Network | + Articles

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.