Oil price signals more industry losses

'Governments must act to change industry structure' AIR CARGO figures slumped by 0.9% in February, although year-to-date figures maintained positive growth of 6.5%, according to figures released by the International Air Transport Association. Weaker global economic activity and a slump in Chinese imports during the Chinese New Year period are largely to blame for this, said IATA CEO Giovanni Bisignani. Year-to-date load factors remained high at 72.7%. Latin American and North America led with average load factors of 74.7% and 74.8% respectively for the January-February period. The cost of fuel continued to rise in February, mitigating the positive impacts of both growth and careful capacity management. “If the average price of oil settles at US$43 per barrel (Brent) for the year the total cost of fuel to the industry will exceed US$73 billion. Clearly 2005 will be another year of industry losses, despite aggressive airline cost cutting,” said Bisignani. “Consolidation in European aviation last week was a small but important step in the right direction for the industry. But we need governments that are not afraid of taking big steps that will fundamentally change the structure of the industry,” he added.