Volumes rise as fuel bogey looms

Industry expected to lose $3-4bn this year ACCORDING TO the International Air Transport Association (IATA) global cargo traffic rose by 14.2% and international passenger traffic increased by 18.7% for the first eight months of 2004 over 2003. Year-on-year for August freight was up 13.6% while passenger traffic grew by 10.8%. The increase is well beyond expectation and a much-needed shot in the arm for a beleaguered industry battling the impact of high fuel costs, according to IATA director general and CEO Giovanni Bisignani. Compared to the year 2000, the last year not marked by a crisis in the airline industry, statistics continue to indicate several years of lost growth. In January to August 2004 cargo traffic showed growth of 15.1 % over 2000 levels. Airlines continue to be aggressive in cost cutting. In 2003 the industry achieved a 2.5% reduction in non-fuel unit costs and indications are for a further 3.0% reduction for 2004, which is above expectations. “Airlines have done a great job of reducing costs in some very difficult circumstances. Unfortunately, the high price of fuel is eating up these gains and more,” said Bisignani. “Overall, we expect that the airline industry (domestic and international) will lose between US$3 and US$4 billion in 2004.”