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Stronger Than Expected Start to 2005

“We are off to a great start for 2005 for international traffic,” said
Giovanni Bisignani, Director General and CEO of the International Air Transport
Association as IATA released international traffic data for January. “There
is stronger than expected growth in all regions, except for Asia Pacific which
suffered from the impact of the Indian Ocean Tsunami.” Passenger traffic showed a 7.9% increase over the same period in 2004, while cargo
improved by 15.5%. Asia-Pacific growth was stunted at 2.5% in the aftermath of the
Tsunami tragedy. Overall passenger capacity rose by 7.8% leaving the global
passenger load factor at 73.5% for January. With the exception of Asia Pacific and
the Middle East, traffic gains lead capacity expansion.

For January 2005 Statistics go to


Asia-Pacific, Middle Eastern and European carriers are reporting increasingly better
profit numbers while the US industry continues to experience severe difficulties.
This is particularly true as US domestic yields suffer severe pressure. Redeployment
of US domestic capacity to international routes and the continuing weakness of the
US dollar are largely responsible for the 11.8% rise in traffic by North American



“We will likely achieve 5.9% passenger growth this year, the bottom line remains at
risk,” said Bisignani. “The persistent high price of fuel will be difficult to
absorb. While the profitability picture for the industry is increasingly
regionalised there is a universal theme for 2005—austerity.. There is no panacea
for the problems of the industry, but cost control must be firmly at the top of the
agenda for all players.”


“There is also a severe ‘policy risk’ to air transport. Politicians and bureaucrats
mis-understand and mis-regulate the industry, harming the employer of 4 million
people who support a global economic output of over US$1.3 trillion,” said


“February was highlighted by two potentially disastrous developments. Europe
implemented new rules on compensation for delays and cancellations that fail both
the good law and good sense tests.  These add costs and complexity to an industry
that is simplifying to reduce costs to provide better value to consumers. At the
same time politicians are bantering proposals for new taxes on aviation that ignore
the fact that aviation already entirely funds its own infrastructure. The industry
is beginning to recover—in many ways despite the efforts of some of our
regulators,” said Bisignani.