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International Air Transport Association

Traffic improves but bottom line worsens

The International Air Transport Association (IATA) released industry traffic data for…

The International Air Transport Association (IATA) released industry traffic data for the first three quarters of 2004 demonstrating sustained traffic increases across all regions. International scheduled passenger traffic for the nine months to September 2004 grew 17.7% over the same period in 2003 while cargo posted gains of 14.1%. Single month comparisons for September 2004 to September 2003 show 10.9% growth for passenger and 13.6% for cargo traffic.

People are travelling again. Every region is reporting double digit growth. Traffic clearly is rebounding from 2003, which was an exceptionally bad year, said Giovanni Bisignani, IATA`s Director General and CEO.

Effective capacity management continues to be evident in strong load factors of 75.5% for September and the nine-month average load factor of 74.6%.

Airline efforts to meet demand and reduce costs are paying off. We are well placed to achieve 14% passenger growth in 2004 with a 3% reduction in non-fuel unit costs, said Bisignani. Airlines` cost-cutting has been particularly successful with respect to personnel and distribution costs. Some airlines have achieved increases in productivity of as much as 13%. Similarly, reductions in distribution costs in the region of 14% have been realized, said Bisignani.

The sad story is that, despite these improvements, the bottom line is worsening with the extraordinary price of fuel. If current fuel price levels persist, losses may well exceed the US$3-4 billion previously forecasted for 2004, said Bisignani.

Efficiency, efficiency and efficiency. Improving efficiency is the mantra. This applies equally to shortening air routes, operating more fuel efficient aircraft and streamlining industry processes. IATA is taking a leading role in simplifying the industry`s complex processes that will save billions and generate added value for passengers. With oil in the US$50/barrel range, it is critical that our industry partners join these efforts in earnest. In particular governments, air navigation service providers and airports need to cooperate to optimise flight operations and reduce fuel consumption, said Bisignani.

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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.