Air passenger and freight demand holds up despite rising oil prices

PARIS - World airlines enjoyed robust growth in passenger and freight demand in the first four months of 2006 despite rising oil prices that could spark a near 10-per cent spike in fuel bills this year, the International Air Transport Association (IATA) said on Thursday.

By (AFP)

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Published: Thu 1 Jun 2006, 8:13 PM

Last updated: Sat 4 Apr 2015, 3:16 PM

The association reported that passenger demand rose 6.9 per cent in the January-to-April period compared with the same months of 2005 while freight demand was up 5.7 per cent.

Load factors, which measure the ratio of paid passenger seats to total seating capacity, averaged 74.8 per cent in the first four months of 2006.

Demand growth was particularly strong in April, reflecting a late Easter holiday, according to IATA. Passenger traffic increased 9.0 per cent from April 2005, taking load factors to 76.5 per cent, ”the highest in over a decade,” said IATA Director General Giovanni Bisignani.

“Traffic is growing despite the increase of the fuel prices and airlines are managing capacities efficiently and have cut their non-fuel costs by 13 per cent,” said Bisignani, whose organization groups 265 airlines accounting for 94 per cent of international air traffic.

The Middle East was the best performer in April, when traffic rose 22.1 per cent, followed by Africa, up 12.3 per cent, Asia-Pacific, 9.2 per cent and Europe, 8.4 per cent.

Freight traffic in April rose 6.1 per cent from the same month last year.

But bouyant demand and cost cutting are not likely to shield the airline industry from losses in 2006, which according to IATA’s last forecast were expected to come to 2.2 billion dollars (1.7 billion euros).

Bisignani warned that the 2006 loss could be larger than anticipated, notably as the average price per barrel of oil is expected to be 64 dollars in 2006 against 54 dollar in 2005.

Airliines lost a total of 6.0 billion dollars in 2005.

In 2006, Bisignani said, “we expect a fuel bill over 100 billion dollars,” up from 91 billion in 205.

IATA is to hold its annual general assembly here on June 5 and 6.

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