Solid Passenger Growth Reported in 2005, IATA Says

06 February 2006 5:00am

The International Air Transport Association (IATA) released full-year traffic results for 2005 showing that international passenger traffic grew by 7.6 percent in 2005.

“The industry is returning to a more normal growth pattern after the shocks that began in 2001. Passenger traffic is lower than the 15.3 percent increase recorded in 2004, but above the historical growth of 6 percent,” said Giovanni Bisignani, IATA´s Director General and CEO.

Regionally, only Latin America (11.4 percent) and the Middle East (13.1 percent) reported double-digit passenger traffic growth in 2005. Load factors also improved by 0.9 percent to 75.1 percent year over year, reflecting the industry´s restrained response to the more modest growth rate seen in 2005. December passenger traffic grew by 6.1 percent.

Despite this growth, the industry lost $ 6 billion in 2005. US airlines lost $10 billion, European carriers made $1.3 billion and Asian carriers earned $1.5 billion.

“Growth and profitability are completely different concepts. Passenger traffic is forecast to grow in the 5 percent to 6 percent range during 2006 but the industry is projected to record another loss of over $4 billion for 2006,” said Bisignani. “The industry will not see black ink until at least 2007.”

“Cost reduction remains critical. All industry partners and stakeholders will have to sustain their focus on fuel efficiency and attack costs. While we have made some good progress, the road ahead is long. Far too many airport monopolies do not understand the need for efficiency and too many governments are shirking their responsibility to regulate where commercial discipline is absent,” said Bisignani.

“Governments must also streamline their approach to the industry. Air transport is intensely competitive, but airlines are denied basic commercial freedoms by an outdated bilateral system and are micro-managed through deregulation. For the industry to turn the corner in 2006, the agenda for change must continue,” the IATA chief concluded.