(Geneva) "First quarter passenger growth of 9.4% combined with a load factor of 73.7% is good news. Carriers are successfully increasing fleet utilisation. This is particularly true in the North America where March load factors topped 81.1%. Nonetheless, with oil in the US$50 per barrel (Brent) range we are a long way from profitability," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).
IATA released traffic data to the end of March 2005. Capacity expansion in all regions for the first quarter was below traffic growth, pushing load factors higher. Freight expansion was less impressive at 4.2%. "While it is too early to identify a slowing trend in freight traffic, we need to watch this development closely over the coming months," said Bisignani.
"However you look at it, 2005 is shaping up to be another difficult year for the airlines. Intensified cost cutting and better aircraft utilisation are steps in the right direction. But they cannot keep pace with the increases in the industry's fuel bill. From 2003 to 2004 the industry fuel bill rose by US$19 billion from US$44 billion to US$63 billion. At an average fuel bill of US$43 per barrel (Brent), the fuel bill for 2005 will exceed US$76 billion—and even that seems conservative given today's prices. Fundamental and large-scale change is absolutely critical," said Bisignani.
"There is no silver bullet for the industry and there is no tolerance for inefficiency in the value chain. Airlines are doing their part by Simplifying the Business. One measure of progress is the rise in e-tickets issued by travel agents and processed through IATA's settlement systems. From 19% in 2004 we are now over 26% for the first quarter of 2005. We are on track to meet our targets of 40% by the end of this year and 100% by the end of 2007. Airports and air navigation service providers contribute US$40 billion in costs to the industry. They have a vital role to play in delivering cost efficiencies to the industry. Similarly governments must liberalize ownership rules and let airlines operate like real global businesses. The situation is critical and we must move fast with our agenda for change," said Bisignani.
The agenda for change will form the basis of discussions at the World Air Transport Summit and 61st IATA Annual General Meeting. Over 600 aviation leaders will gather in Tokyo 29-31 May to discuss the future of air transport in these challenging times.
|March 2005 over March 2004|
|PLF||FTK Growth||ATK Growth|
|Year to Date- 2005 over 2004||RPK Growth||ASK Growth||PLF||FTK Growth||ATK Growth|
Notes for editors
- Month-on-month results for passenger and freight results for March are distorted by the Easter holiday period, which moved from April in 2004 to March in 2005.
- IATA (International Air Transport Association) represents 265 airlines comprising 94% of international scheduled air traffic.
- The IATA Billing and Settlement Plan operates in 71 countries for 390 airline and non-airline participants covering 150 countries and territories.
- Explanation of measurements:
a. RPK: Revenue Passenger Kilometres measures actual passenger traffic
b. ASK: Available Seat Kilometres measures available passenger capacity
c. PLF: Passenger Load Factor is % of ASKs used. In comparison of 2004 to 2003, PLF indicates point differential between the periods compared.
d. FTK: Freight Tonne Kilometres measures actual freight traffic
e. 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.
- Due to uncertainties in the adoption of the new ICAO statistical definitions by reporting carriers, care should be taken when making year comparisons.