The International Air Transport Association released cargo and passenger
traffic forecasts for 2004-2008 indicating 6.0% growth annually for international
passengers and 6.0% annually for international cargo tonnage. “It looks like we will finish 2004 with the strongest traffic rebound that the
industry has seen since the 1991 recovery from the effects of the Gulf War.
Expectations for the rest of the forecast period are in line with historical
industry trends. If nothing changes in the operating environment, this is the start
of a good news story for the industry,” said Giovanni Bisignani, IATA’s Director
General and CEO.

Passenger numbers for 2004 are expected to grow by 11% over 2003 (14% if measured in
revenue passenger kilometers). While this phenomenal growth is largely related to a
recovery from the disastrous impact of SARS in 2003, two underlying factors are
important. First, the robust economic expansion is the strongest in three decades.
Second, increasing liberalization and intense competition in many markets is driving
growth with declining yields.

China and India will be the main engines of growth for passenger traffic.
International markets within Asia Pacific are expected to grow at 8.3% over the
forecast period. Europe-Middle East growth, while from a much smaller base, will
also be exceptional at 7.7% reflecting rapid expansion plans by Middle Eastern
carriers.

Freight will also see double-digit growth in 2004, increasing 10.1%.  The 6.0%
freight growth forecasted through 2008 relies heavily on Asia-Pacific with markets
linked to China and India expected to growth most rapidly. Europe to Asia-Pacific
will be the fastest growing market with 7.0% annual growth. Traffic within Asia
Pacific and between the Middle East and Europe will also be above the global average
at 6.1%.

“Strong traffic growth is only half the story. Damaged balance sheets from four
successive years of record losses totally in US$35 billion and three years of lost
growth will take more than a rebound in traffic to repair. Structural change is
essential to return the industry to health,” said Bisignani.
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