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Press Release No.: 29

Date: 30 November 2006

Freight Growth Dips to one-year Low, As Passenger Demand Rises

(GENEVA) The International Air Transport Association (IATA) released its October traffic results showing that year-on-year demand growth for international freight was 2.3%, a sharp drop from the 4.9% growth recorded in September. This is the weakest monthly freight growth rate recorded in a year. By contrast, international passenger demand growth ended a five-month period of slowing growth with a 5.3% increase (up marginally from the 4.7% recorded in September).

For the first ten months of the year, freight traffic is up by 4.9% and passenger traffic by 5.8%.

“Freight is the story of the month. Despite strong underlying positive economic conditions, the results for freight traffic are disappointing,” said Giovanni Bisignani, IATA’s Director General and CEO.

An 11% increase in exports from the EU 25 over the first three quarters of 2006 has only seen a 1.8% increase in airfreight by European carriers with a 0.4% year-on-year contraction for the month of October. Similarly, Asia-Pacific carriers experienced a 4.9% increase in freight despite the 12% jump in semi-conductor exports. “Some positive news is expected. As the recent fall in the price of oil works its way through the system, we can expect to see a boost in the freight traffic, particularly as we enter the fourth quarter which is traditionally the peak season,” said Giovanni Bisignani, Director General and CEO of IATA.

Passenger traffic growth was strongest among Middle Eastern carriers at 12.9% for October and 14.4% for the first 10 months of the year—matching capacity growth exactly. North American carriers saw a 6.7% increase in demand for October, slightly higher than the 6.5% increase in capacity. Over the first 10 months of the year, North American demand increased by 5.6% while capacity expansion was 4.8%. Europe and Asia Pacific saw similar 10-month demand growth of 5.2% with capacity expansion of 4.4% and 2.8% respectively.

The average passenger load factor for October remained strong at 74.9% representing the 18th consecutive month of year-on-year load factor increases. European airlines saw the highest levels in October (77.2%) closely followed by North American airlines (77.1%). In the Middle East load factors fell to 69.2%, 2.5% lower than October 2005, as capacity growth outstripped demand.

“Higher passenger load factors are just one of the drivers behind the improving performance of the industry. With ten-month growth at 5.8% outstripping capacity expansion of 4.5%, oil prices 20% below the August peak, and steady progress on Simplifying the Business and other efficiency measures, the industry is set to end 2006 on the most positive note since 2000,” said Bisignani.

IATA will announce a revised industry financial forecast on December 12.

Full October traffic results (pdf)

Editors Notes:

    • IATA (International Air Transport Association) represents over 250 airlines comprising 94% of international scheduled air traffic.
    • The industry fuel bill in 2006 is estimated at US$ 115 billion accounting for 26% of operating costs. The increase in fuel costs 2005-2006 will be US$24 billion. Yet airlines will still improve their bottom line from a US$ 3.2 billion loss in 2005 to an estimated US$ 1.7 billion loss in 2006. 
    • 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.

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

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