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Press Release No.: 21

Date: 27 July 2006

Strong Traffic Demand in First Half of 2006 - The Bottom Line is All About Oil

(Geneva) The International Air Transport Association (IATA) today reported that 2006 international passenger traffic for the first half of the year grew 6.7% while international freight traffic was up 5.2% over the same period in 2005.  The passenger load factor reached 75.1%, 1.2 percentage points higher than during the same period last year.

For the single month of June, passenger traffic continued the pattern of strong and stable growth seen over the past 18 months with a 6.5% expansion over June 2005. With only a 4.4% expansion in capacity, the passenger load factor reached 78.3%, over 1.5 percentage points over June 2005. Freight performance was disappointing with 4.1% growth, a drop from the 5.1% growth recorded in May.

"The bottom line is all about oil. Prices continue at near record levels and we expect a fuel bill of US$112 billion this year at an average price of US$66 per barrel. Increased political instability in the Middle East does not bode well for a price drop any time soon. The good news is that neither the extraordinary price of oil nor the inching-up of interest rates negatively impacted demand," said Giovanni Bisignani, IATA's Director General and CEO.

Bisignani continued, "The revenue environment is strong. In each of the last three years, revenues increased 10%.  And careful capacity management has seen global load factors move about the 75% level for the first half of the year. None-the-less, airlines will still end the year US$3 billion in the red."

"Change is urgent and now is the time. Airline efficiency gains must be matched throughout the value chain. And we must find new ways of doing business. Airlines are leading the way by Simplifying the Business. The 100% conversion to e-ticketing by the end of 2007 is a great example. But we now look to the oil industry to move faster at developing alternative fuels to further improve efficiency and environmental performance," said Bisignani.

 Full June traffic results (pdf)

    Editors Notes:

    • IATA (International Air Transport Association) represents 261 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.

Corporate Communications
Tel +41 22 770 29 67
Fax +41 22 770 26 41
e-mail: corpcomms@iata.org

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