Press Release No.:
Date: 31 October 2005
Five Year Forecast Shows Rapid Growth in Asia and Central Europe
(Geneva) - The International Air Transport Association (IATA) reported that international passenger traffic for September grew by 8.2% compared to September 2004. This is significantly better than the 6.1% growth recorded for August. International freight traffic continued its slowdown to 1.3% in September 2005 over September 2004 from the 2.8% growth recorded for August. Load factors also improved over the same period last year by 1.3% to 76.6%.
Comparing the first nine months of 2005 to the same period in 2004, passenger and freight traffic showed growth of 8.3% and 3% respectively.
View full September 2005 statistics
"The rebound in passenger traffic growth in September is a welcome surprise. Unfortunately, it is likely to be temporary. The continued slowing in freight volumes indicates that high oil prices are taking a bite out of economic activity. It is only a matter of time before the trend is reflected in passenger volumes," said Giovanni Bisignani, IATA's Director General and CEO.
Bisignani made his comments as IATA released passenger and freight traffic forecasts for 2005-2009 projecting a 5.6% average annual growth rate (AAGR) for international passengers and 6.3% for international freight tonnage.
The forecasts, based on the aggregate of airline expectations for major route areas, indicate that the industry sees 2005 as a transition from the extremely volatile swings in demand of the last four years to a period of stable growth. For the five-year forecast period, growth is expected to be strongest on routes connecting Asia and the Middle East, in line with strong regional economic growth and investment in capacity.
International passenger growth will be lead by routes within Asia-Pacific which expect 6.8% AAGR, largely on the strength of Chinese and Indian economic expansion and liberalisation of markets. Intra-Europe traffic growth is forecast to be 5.1% AAGR, though routes in Central and Eastern Europe are expected to grow at a faster pace than in Western Europe. For individual countries, Poland's international traffic is expected to see the fastest rate of growth in passengers at 11.2%, followed closely by the China (9.6%) and the Czech Republic (9.5%).
Freight's projected 6.3% AAGR for international operations represents a return to trend growth rates from the weak growth seen so far in 2005. Freight flows within Asia-Pacific are expected to grow strongly with an AAGR of 8.5%, driven by the tremendous expansion in trade flows already in evidence in this region. Middle-Eastern airlines have been expanding the volume of freight they carry at double-digit growth rates, in line with their investment in expanded capacity. Freight traffic on markets connected with the Middle East is expected to continue to expand rapidly, with an AAGR of 8.8% between the Middle East and Asia-Pacific. China is expected to see the fastest rate of growth with an AAGR of 14.4%. Overall, international air freight volumes are expected to grow from 25.2 million tonnes handled in 2004 to 34.2 million tonnes in 2009.
"Air transport is critical to the global economy. We generate 29 million jobs globally with an economic impact exceeding US$2.9 trillion or 8% of GDP. Our growth prospects are clear, but profitability remains illusive. With US$36 billion in losses between 2001 and 2004, and another US$7.4 billion loss expected for 2005, the industry is in need of massive change. While airline efforts have reduced costs and increased efficiency, they cannot keep up with the negative impacts of the extra-ordinary high price of oil. The industry fuel bill jumped from US$44 billion in 2003 to an estimated US$97 billion this year. And now we are seeing downward pressure on cargo volumes. The need for structural change is absolutely critical if we are to be viable and sustainable industry," said Bisignani.
"In many ways, governments must play catch-up with the industry. Airlines compete in a global market, but without basic commercial freedoms that other industries take for granted. Airlines need the freedom to serve markets where they exist and to merge and consolidate where it makes business sense. In short, we need progressive liberalisation with governments to setting a level playing field and regulating safety and security. After that they need to get out of the way and let airlines get on with the business of turning growth into profitability," said Bisignani.
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