IATA reports improvement in air traffic but worrying bottom line

Airline Industry Information, Oct 28, 2004

AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD

The International Air Transport Association (IATA) has reported mixed news for the aviation industry with passenger traffic rising well but bottom line results being affected badly by soaring fuel costs.

International scheduled traffic for the nine months to September 2004 rose by 17.7% over the same period in 2003, with September 2003-September 2004 comparisons showing a 10.9% growth in passenger traffic. IATA's CEO Giovanni Bisignani said that the new figures showed that people were flying again and that with an average load factor of 74.6% over the last nine months the industry policy of meeting demands while cutting costs is paying off.

Despite the increase in passenger traffic however IATA said that the record price of fuel is having a damaging effect on the airlines' earnings and that total losses for the industry could equal USD3-4bn for 2004. Bisignani said that the new mantra for airlines was efficiency through shorter routes and better aircraft.

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