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Press Release No.: 15

Date: 27 April 2006

Strong Traffic Demand in First Quarter - But Oil Remains the Wild Card for Profitability

(London) - The International Air Transport Association (IATA) reported that first quarter 2006 international passenger traffic recorded 5.9% growth while international freight traffic was up 5.2% over the same period for 2005. For the month of March, passenger growth dipped to 5.7% while freight surged to a 6.2% improvement over 2005. The slight fall in passenger traffic growth is attributed to the movement of the Easter holiday period from March in 2005 to April in 2006.

“This is the fourth consecutive month with freight growth above 5%--the strongest sustained rally for freight traffic in a year. It reflects strong economic prospects in fast developing India and China, a stronger outlook for US economic expansion and improving prospects for Europe,” said Giovanni Bisignani, IATA’s Director General and CEO.

Passenger load factors averaged 74.4% during the first quarter and 75.5% for March indicating a close matching of capacity to demand. Middle Eastern carriers led growth during the first quarter with a 17.5% increase in passenger traffic and a 16.6% increase in cargo over 2005 levels.

“Oil remains the wild card for industry profitability,” said Bisignani in a speech today at the UK Aviation Club in London. “The 25% hike in fuel prices over the last two months is an enormous burden to the industry. However, the US$1.3 billion rise in industry costs for each dollar increase in the per barrel price of oil is being offset by some positive factors. The 5.9% first quarter growth is helping. Industry hedging levels are 50%.  Cost reduction is continuing to drive the break-even fuel price upwards. And the US domestic yield rose 12.4% in February,” said Bisignani.

In March, IATA forecast an industry loss of US$2.2 billion for 2006 based on an oil price of US$57 per barrel. A revised forecast will be issued on 5 June at the IATA Annual General Meeting and World Air Transport Summit to be held in Paris.

Full March traffic results

Editors Notes:

  • IATA (International Air Transport Association) represents 265 airlines comprising 94% of international scheduled air traffic.
  • Explanation of measurements:
    • RPK: Revenue Passenger Kilometres measures actual passenger traffic
    • ASK: Available Seat Kilometres measures available passenger capacity
    • PLF: Passenger Load Factor is % of ASKs used. In comparison of 2006 to 2005, PLF indicates point differential between the periods compared.
    • FTK: Freight Tonne Kilometres measures actual freight traffic
    • ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)
  • IATA statistics cover international scheduled air traffic; domestic traffic is not included.
  • All figures are provisional and represent total reporting at time of publication plus estimates for missing data.
  • All figures are provisional and represent total reporting at time of publication plus estimates for missing data.
  • The full text of Giovanni Bisignani's speech at the UK Aviation Club is available at www.iata.org
  • The IATA Annual General Meeting and World Air Transport Summit will be in Paris from 4-6 June 2006. For further information on media attendance, please contact Joanna Grimble on +41 22 770 29 62

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