(GENEVA) The International Air Transport Association (IATA) released its monthly traffic statistics for July 2005 showing passenger growth of 8.5% with considerably weakened cargo traffic at 2.2%. Year-to-date statistics showed 8.8% growth in passenger traffic and 3.5% growth for freight.
"Carriers are responding to the summer travel season in the Northern hemisphere with careful capacity management. Globally 4 out of every 5 seats were filled in July with every region reporting load factors in excess of 70%," said Giovanni Bisignani, IATA's Director General and CEO.
The high load factors along with fuel surcharges are helping airlines to partially mitigate the soaring price of fuel. "The extra-ordinary high price of fuel means that cost reduction has gone beyond urgent. Fuel—the Fifth Horseman of the Apocalypse—is the biggest factor forcing the structural change and efficiency our industry desperately needs. With oil approaching the US$70 per barrel (Brent) range, every drop of unneeded fuel burn and every cent of unnecessary expense is simply not tolerable," said Bisignani.
In May, IATA forecasted industry losses of US$6 billion based on the assumption of an average oil price of US$47/barrel (Brent). Escalating fuel prices in recent weeks have brought the year-to-date average price per barrel to US$53. "Every dollar added to the price of oil adds US$ 1 billion to airline industry costs. The battle is to keep these costs from reaching the bottom line. Airlines are dramatically increasing efficiency and cutting costs. It is time that all partners in the industry's value chain do the same," said Bisignani.
Bisignani emphasized the tremendous potential for efficiency gains in air traffic management, and the associated environmental benefit. "If we could save just one minute on every flight, industry savings of up to US$4 billion arepossible—and the environment would benefit from a reduction of 10 million tonnes in emissions. The industry is in crisis. It is time for governments to muster the political will to turn great ideas—like an effective Single European Sky or redesigned airspace in the China's Pearl River Delta—into realities that benefit all," said Bisignani.