Tuesday June 29, 12:15 AM
Industry Group: Airline Traffic Soaring

Article 1 : IATA

GENEVA – "Traffic growth for the first five months of 2004 is testimony to the resilience of air transport. Not only have we fully recovered from the impact of SARS and war in Iraq, all major regions of the world are reporting traffic levels above those of 2000—the last normal year for our industry," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).

Passenger traffic on all international routes was up by 38% in May 2004 as compared to May 2003. For Asian airlines alone the increase was even more extraordinary at 108% indicating a full traffic recovery from SARS. Overall, passenger traffic for the first five months of 2004 was up 19.4% over 2003, while freight traffic improved by 12.2% for the same period. More meaningfully, when 2004 data is compared to 2000 for the same 5-month period, global passenger and cargo traffic have risen to levels 8.8% and 13.6% higher respectively.

Despite the shocks that have rocked the airline industry in recent years, the underlying industry annual growth rate is 3.6%, according to recent IATA trend analysis (chart attached). "Events beyond our control have clearly slowed the growth of the industry to half of what we experienced in the latter part of the 1990's. All things being equal, every 1% of growth adds US $1.6 billion to revenues on international services," said Bisignani.

"While oil prices have declined recently, every additional dollar over US$33/barrel generates US$1 billion industry losses. Efficiency gains and cost cutting remain priorities to return the industry to health. The IATA-led initiative to move the industry to 100% electronic ticketing by 2007 is an example of the serious approach that airlines are taking to cutting costs out of the system. Our partners in the value chain—particularly airports and air navigation service providers—must approach cost efficiency with equal resolve," said Bisignani.

Article 2 : Reuters

GENEVA - International air passenger traffic rose by 19.4 percent between January and May this year compared with the same period last year, the global airlines body IATA said on Monday.
Freight traffic over the same five months was up 12.2 percent, according to figures released by the Geneva-based grouping, the International Air Transport Association.

"Not only have we recovered from the impact of SARS and war in Iraq, all major regions of the world are reporting traffic levels above those of 2000, the last normal year for our industry," said Director-General Giovanni Bisignani.

In May alone, passengers on all international routes were up 38 percent on May last year when the industry was suffering from the impact of the SARS flu-type epidemic that swept across Asia and reached Canada and fallout from the invasion of Iraq.

For Asian airlines, IATA said, the recovery was even more dramatic. Traffic there in May was up by 108 percent on that of the same month last year, indicating that the "SARS effect" was well and truly overcome.

IATA said the January-May figures showed passenger traffic up 8.8 percent over the same period in 2000, just before the onset of a global economic downturn which set the industry on a steep downward path.

That decline was sharpened by growing global political instability after the September 2001 hijacking attacks in the United States, the U.S.-led assaults on Afghanistan and Iraq, global terrorism, and the SARS crisis.

Earlier this year airline chiefs feared that steep rises in oil prices would hit the industry's overall global bottom line, but Bisignani, in a statement on the figures, said a recent decline had helped improve the situation.

But efficiency gains and cost-cutting would have to remain priorities for airlines if the industry was to return to full health, he declared.

IATA said that despite the shocks that had rocked the industry over the past four years, its underlying growth rate was 3.6 percent a year. However, this is still only half the rate achieved during the later 1990s.

Of the major regions apart from Asia, North America saw a passenger growth of 32.8 percent in the first five months of this year over January-May 2003 and Europe saw an increase of 19.1 percent, according to IATA.

In the Middle East, traffic was up by 43.9 percent, and in Latin America by 11.5 percent January-May. In Africa the increase was 8.3 percent.

IATA International Traffic Statistics: June 2004

http://www.iata.org/NR/rdonlyres/etstbtd5iibob2adrhqgovrd4bt37oyi6zurzppjr5vwtfwdzjccwgvfmbzk2yfwz2fvj4bq7y5iuk/June2004MonthlyInternationalStatistics.gif

Date: 26 August 2004
Strong Traffic Growth but Profits Undercut by Sky High Fuel Prices

GENEVA – "International passenger and cargo traffic growth continued to exceed expectations through July, however the extraordinarily high level of oil prices points to yet another year of significant airline losses," said Giovanni Bisignani, Director General and CEO of IATA.

"Ending the year with double-digit passenger growth is possible given the industry's performance for the first seven months of 2004. This includes a significant one-off rebound in traffic from SARS in 2003. More importantly, we are seeing a solid recovery in the underlying growth of international passenger traffic over the past year," said Bisignani. (Chart 1)

Asia continues to display a strong rebound from the traumatic events of 2003 with the January to July passenger traffic showing a 29.4% improvement on 2003 levels. Middle Eastern carriers exceeded that with 33.5% growth. All other regions also reported double digit year-on-year growth for the January to July period. When compared to the same period in 2000, the severe shocks of the last several years are apparent. Global passenger traffic in the first seven months of 2004 was just 8.2% above 2000 levels. By comparison, European carriers posted only 2.1% growth for the same period.

Freight volumes show solid and accelerating growth. Driven by buoyant world trade and far less distorted by SARS and other shocks affecting passenger traffic, year-on-year freight volumes grew 14.1% in the first seven months of 2004 over 2003 and 15.3% when compared to 2000.

"Positive traffic results have been overtaken by fuel costs. They are our biggest nightmare," said Bisignani.

Each dollar added to average price of a barrel of Brent over the year adds a US$1 billion to the industry's costs. Airlines are using capacity wisely with passenger load factors rising to 78.4% in July 2004. They are also taking a wide range of measures to improve fuel efficiency.

"But airlines cannot do it alone. The high cost of fuel exaggerates existing inefficiencies in the industry's infrastructure. Air traffic control delays and inefficient routings are wasteful – something we cannot tolerate. Our ATC partners must drive inefficiencies out of their systems," said Bisignani.

Statistics :
http://www.iata.org/NR/rdonlyres/eahhhwsnmrvawpdyzf3kc3r6lr7xbrerqnjgyfmtone7wy42qbyi5g3s2s4rdfnzfk5tf6imfqlqfh/StatstablesJuly2004.doc

hkskyline, do you have the details for each countries? I am interested to see how each countries air-traffic statistic perfomed this year.

thanks mate

cheers

The IATA doesn't publish statistics by country. They only release statistics by region. I'm not sure how each country discloses its own statistics. Some might do just numbers, others may include RPK, ASK, etc. Try checking the country's civil aviation authority for more information.

Wednesday September 15, 11:48 PM
Boeing sees world air cargo growth at 6.2 pct
By Chelsea Emery

NEW YORK, Sept 15 (Reuters) - Airplane manufacturer and defense contractor Boeing Co. said on Wednesday that it expects world air cargo to grow at an average annual rate of 6.2 percent during the next two decades, with overall traffic tripling from current levels.

"This year is shaping up to be the best year for world air cargo traffic growth since 1997," Tom Crabtree, regional director of marketing in Europe for Boeing Commercial Airplanes, said in a statement.

The world freighter fleet should increase to 3,456 airplanes from 1,766 during the 20-year forecast period, with the greatest growth in wide-body freighters such as Boeing's 747, 767, MD-11 and the Airbus A-300 and Asian air cargo markets leading the industry in average annual growth, according to Boeing.

The strongest growth year-to-date has come in the trans-Pacific and Europe-Asia markets, Boeing said. Looking forward, North America-Asia is forecast to grow at an average rate of 7.2 percent and Europe-Asia growth is seen at 6.7 percent, while lower growth rates will be found in intra-North American and intra-European markets.

BENEFITS TO BOEING

The company benefits from sales of new planes, as well as converting old passenger planes to freighters, said Cai von Rumohr, an aerospace analyst with investment firm SG Cowen.

"It's definitely a positive because cargo is a growing market," von Rumohr said. "In general, cargo is expected to grow somewhat faster than the passenger market."

Other companies that gain from a stronger market for cargo include Airbus, which is working on the newest large airliner A-380, and cargo carriers FedEx Corp. and United Parcel Service Inc. , von Rumohr added.

The forecasts are also available through Boeing's World Air Cargo Forecast 2004/2005, released Wednesday at http://www.boeing.com/commercial/cargo.

Boeing has provided more than 70 percent of the existing world jetliners, according to the company.

Of the 2,950 freighters expected to join the fleet, 1,260 would be replacements for retired aircraft and 1,590 for growth, the company said.

"With the challenges of the past few years, the air cargo market's strength has been encouraging," Marlin Dailey, vice president of sales in Europe and Central Asia, said in the statement.

Boeing shares were down 31 cents, or 0.5 percent, at $53.61 in mid-morning trading on the New York Stock Exchange. The Standard & Poor's aerospace and defense index was off 0.5 percent.

Air cargo strength points to recovery

KEITH JOHNSON
Wall Street Journal
17 September 2004

BILBAO, SPAIN

The global air-cargo market is growing at its fastest pace in almost a decade as Asian manufacturers and exporters recover, potentially signalling that economic recovery around the world could be stronger than has been anticipated.

World air-cargo shipments grew 14 per cent through the first seven months of the year, according to industry trade group International Air Transport Association, marking the first double-digit increase in that time period since 1997. Top Asian markets still are growing at that pace, the latest figures suggest: Singapore's Changi Airport, a crucial freight hub for global trade, this week reported 12-per-cent cargo growth in the year through August, compared with a year earlier.

Luxembourg-based Cargolux Airlines International, Europe's largest all-freight carrier, said sales grew “in double digits” in the first half of 2004 with the sector poised to enter peak season. “There's no reason for growth to slow down the rest of the year, and capacity in general is very tight in most markets,” said Robert van de Weg, Cargolux's vice-president of sales.

The air-cargo market usually grows at twice the growth rate of gross domestic product and, as such, is considered a leading economic indicator. The 14-per-cent growth in air cargo is far faster than is suggested by the Organization for Economic Co-operation and Development's predictions of GDP growth around the world in 2004 — 4.7 per cent for the United States, 1.6 per cent in the euro zone and 8.3 per cent for China.

Air cargo accounts for about 42 per cent of world trade by value, though only about 2 per cent by volume, according to the International Air Cargo Association in Miami. Traffic is measured in terms of revenue ton kilometres — that is, one ton of freight flown one kilometre.

This year's strong growth continues the sector's performance in 2003, when it moved a record 156 billion ton-kilometres of cargo around the world, up 4 per cent from 2002. “This could be the year of biggest growth in the last decade,” said Thomas Crabtree, a cargo revenue analyst at Boeing Co. and the lead author of a new cargo market forecast released this week at an industry conference in Bilbao.

The air-cargo market's strength stands in stark contrast to the woes of passenger airlines, as a number of carriers struggle. In the past 10 years, on the other hand, world air-freight tonnage has grown by 80 per cent because of a rise in international trade and changes in production methods and delivery habits among manufacturers.

The Are Now 34 Direct Perth - Singapore Services A Week With Up To 6 A Day By Qantas & Singapore Airlines, Last Year It Was Australia's 3rd Busiest International Route

World's Largest Cargo Airports (January - May 2004)
Source : ACI
1. Memphis 1,468,307 +5.5%
2. Hong Kong 1,188,866 +14.1%
3. Tokyo Narita 944,791 +12.3%
4. Anchorage 899,680 +14.5%
5. Seoul Incheon 848,364 +20.2%
6. Los Angeles 757,195 +3.7%
7. Frankfurt 728,976 +9.2%
8. Miamai 720,808 +8.5%
9. Singapore 714,796 +9.6%
10. Louisville 700,352 +9.6%

The Are Now 34 Direct Perth - Singapore Services A Week With Up To 6 A Day By Qantas & Singapore Airlines, Last Year It Was Australia's 3rd Busiest International Route
Cool! I would have expected the busier routes to come out of Sydney and Melbourne, and not Perth! Goes to show just how much exchanges there are between Perth and Singapore? ;)

We are just waiting for a budget flight between the two cities now!

Soaring Oil: Airlines Will See Hefty Losses, Global Trade Group Projects
29 September 2004
The Asian Wall Street Journal

The International Air Transport Association said it expects the global airline industry to have an overall loss of $3 billion to $4 billion in 2004, as high fuel costs outweigh strong increases in international traffic.

IATA, the global industry trade group, said international passenger-traffic for the first eight months of 2004 rose 18.7% from a year earlier, while international cargo traffic rose 14.2%. "The increase in traffic is well beyond our expectations" but won't offset surging fuel costs, said Giovanni Bisignani, IATA director-general and chief executive.

The growth in traffic for January through August partly reflects the depressed levels of a year earlier, when the severe-acute-respiratory-syndrome crisis hurt business. Still, "indications of healthy traffic growth are clearly evident in the August performance," which included an increase of 10.8% in international passenger-traffic, IATA said.

The projected loss of $3 billion to $4 billion, based on an average benchmark oil price of $37 a barrel, would represent a narrowing from a total industry loss of $6.5 billion last year. Overall, the industry had a loss of $30 billion from 2001 to 2003, IATA estimates. Earlier in the year, the association had forecast that the industry would have an overall profit of $3 billion this year.

Meanwhile, investment-research firm UBS cut its ratings and target prices on several Asian carriers, including the three listed in Hong Kong, citing slowed demand and high oil prices.

"We have downgraded our estimates, ratings and price targets for a number of Asia-Pacific airlines as the first signs of a revenue slowdown appears," UBS analyst Timothy Ross wrote in a research note.

UBS cut Cathay Pacific Airways to a "neutral" from "buy," and lowered its target price to HK$14.50 (US$1.86) from HK$17.

The house said Cathay Pacific has only covered 9% of its jet-fuel requirements for 2005, and the Asian region, which accounts for more than 60% of its revenue, has recently shown signs of slowing demand.

The note said demand among carriers of the Association of Asia-Pacific Airlines peaked in May year-to-year, while bookings for future travel through computer-reservation systems suggest that demand growth in 2005 will be slower than expected.

The rating for China Southern Airlines also was cut to "neutral" from "buy," with the target price reduced to HK$3.15 from HK$3.30. UBS also cut ratings for China Eastern Airlines to "reduce" from "neutral," with a target price of HK$1.35, down from HK$1.57 previously.

UBS also cut ratings for Thai Airways International and Asiana Airlines to "reduce" from "neutral."

The house rates Qantas Airways, Singapore Airlines, China Airlines and EVA Airways as "buy."

October 4, 2004
Boeing predicts healthy world aviation market

http://us.news2.yimg.com/us.yimg.com/p/afp/20041004/capt.sge.pge60.041004201722.photo00.default-269x378.jpg
Boeing Headquarters in Chicago

WASHINGTON (AFP) - Boeing Co. predicted the world aviation market will pull out of a post-September 2001 slump with two trillion dollars in plane sales in the next 20 years.

In the period from 2004 to 2023, the world economy would grow at a pace of 3.0 percent a year, driving traffic passenger growth of 5.2 percent a year and cargo traffic growth of 6.2 percent a year, it said.

Boeing forecast a total market potential of 24,993 new commercial airplane sales worth about two trillion dollars over the period. Even after retiring 6,397 planes, the world fleet would double to 34,764.

"The long-term forecast for air travel is healthy," said Boeing's annual Current Market Outlook 2004.

World air travel had grown in 30 of the past 34 years, contracting only in 1991 and from 2001 to 2003, it said.

"Currently, the world air travel market is recovering and 2004 is poised for double-digit traffic growth."

Boeing said the market share for the biggest planes such as its 747 or the larger challenger developed by rival Airbus, the double-decker A380, would shrink to four percent from six percent now.

Other twin-aisle planes, such its own mid-sized, fuel efficient 7E7 Dreamliner would gain market share to 21 percent from 18 percent now, Boeing said.

By 2023, three quarters of the world fleet would be single-aisle planes, it said.

The aerospace and aviation group said it expected further deregulation, intensifying competition over the period.

"Typically, when deregulation occurs competition increases among airlines," it said.

"History shows that competition leads to an increase in new nonstop market and frequency growth, rather than an increase in average airplane size in seats."

Most of the growth in the world's airlines will be in increased frequencies and new routes served by small and intermediate-sized planes, it said.

"The large airplane market is small," Boeing said. While the intermediate-size fleet would double, the large plane fleet would grow by about one-quarter.

Overall, China would lead growth in air travel with demand in more mature economies growing at a slower pace.

Over the 20 years, air travel growth was expected to expand by 8.1 percent a year in China, 7.6 percent in Latin America, 6.1 percent across the Pacific, 6.0 percent between Europe and the Asia Pacific, 5.5 percent in the Asia Pacific excluding China and 4.1 percent in Europe.

As a result, the North American share of world traffic would shrink to 20 percent from 24 percent and the European share would decline to 12 percent from 14 percent.

Meanwhile, the intra-Asia-Pacific share would rise to 18 percent from 15 percent and the Latin American share would double to four percent from two percent.

Date: 15 December 2004
International Cargo and Passenger to Grow at 6.0% Yearly to 2008
Strong Growth Reinforces Need for Structural Change

(Geneva) 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.

Table : http://www.iata.org/pressroom/industry_stats/2004-12-15-03.htm

Editor's Notes:

1. IATA Passenger and Cargo forecasts are published annually. These are five-year forecasts for major global traffic flows combining data from participating IATA airlines, other industry data sources and historical knowledge. Full forecasts may be purchased through the IATA Online Store www.iata.org.
2. IATA's Monthly International Statistical Data is based on revenue passenger kilometers and freight tonne-kilometres. Forecast data is for passenger numbers and tonnes uplifted.

Asian air traffic to grow 6 percent over the next 20 years: analysts

SINGAPORE, Jan 24 (AFP) - Air traffic in Asia is likely to grow more than six percent annually over the next 20 years as the low-cost airline industry booms, the China market expands and government regulations are stripped away, an aviation conference heard Monday.

Centre for Asia Pacific Aviation managing director Peter Harbison said 2004 had been a "watershed" year in terms of Asian market liberalisation.

"The irreversible processes and changes that have taken place in the past year will accelerate further progress and growth in the regional airline industry," Harbison told an Asian and Middle East aviation outlook conference.

He referred to a study conducted by aeronautical giant Airbus which said the Asia-Pacific will soon overtake the United States as the region with the strongest long-term air traffic growth.

Another study conducted by rival aircraft maker Boeing estimates that Aisa-Pacific air traffic will grow 6.1 percent annually over the next 20 years.

Harbison said this figure was likely to be conservative, given the "overpowering impact of regional low-cost carriers".

Opening the conference, Singapore Transport Minister Yeo Cheow Tong also cited the two studies in an upbeat assessment of the long-term growth prospects for Asia's aviation industry.

"I am confident that air travel within Asia will continue to grow rapidly ... the future of air travel in this region remains bright," Yeo said, adding China and India would be the main catalysts for the industry's expansion.

Association of Asia Pacific Airlines director general Andrew Herdman backed up the long-term forecasts, which follow 20 percent growth in 2004 as the industry rebounded from SARS and a global economic downturn the previous year.

"Clearly there are some markets where you will see double digit-growth but overall 5.0-6.0 percent is sustainable," Herdman told the conference.

Harbison said there was almost unlimited potential for the regional aviation industry if the north Asian markets were liberalised.

"There's such a tremendous potential in the markets involving China, Japan and Taiwan to be unlocked, the sky's the limit if these markets are opened up," Harbison said.

He said China, in particular, with its estimated 40 million outbound travellers in 2005, was set to become a major influence in regional aviation policy.

Harbison singled out the tiny city-state of Singapore, which serves as a regional aviation hub, as playing a vital role in pushing forward the region's "continuum of liberalisation".

He said the government's successful efforts last year in establishing the city-state as a low-cost carrier hub would have a particularly powerful impact on the industry.

Jetstar Asia, which is 49 percent owned by Australian national carrier Qantas, and two predominantly Singaporean ventures, Tiger Airways and Valuair, began services based here last year.

The government also announced it would build Asia's first dedicated low-cost carrier terminal, which will operate alongside Changi airport from 2006.

"Singapore has made entry into the airline business a lot easier in the future and has set the trend of a much broader definition of airlines, one geared more towards public interest as opposed to the government's," Harbison said.

Harbison warned, however, there were issues that regional carriers had to be wary of, including an acute shortage of skilled staff to keep up with the rapid fleet expansion.

He also said there was a "crying need" for airlines to restructure to cope with the industry's new demands.

"A lot of excitement is being generated with all changes taking place but network carriers must remember that they still have to work very hard to cope with all these changes," Harbison said.

Tuesday January 25, 1:47 PM
INTERVIEW:Arab Carriers' Asia Traffic Seen Up 15% In '05
By Abdul Hadhi
Of DOW JONES NEWSWIRES

Arab airlines expect their Asia traffic to grow about 15% this year as heightened security measures in the West continue to discourage Arab tourists, an industry official said late Monday.

"Asia ranks almost an equal second with Europe in size and traffic for Arab airlines. This market will surpass Europe in 2006, if not 2005," Abdul Wahab Teffaha, secretary general of the Arab Carriers Organization, or AACO, told Dow Jones Newswires.

Abdul Wahab was in Singapore attending an aviation conference.

Asia accounted for 20 million in terms of passenger traffic in 2004, one-third of the Arab travel market, Abdul Wahab said. This marks a 14% increase from 2003.

Europe also accounted for 20 million passengers, while inter-Arab, or within the Arab region, accounted for about 25 million. Abdul Wahab projects that growth in European traffic will be less than that projected for Asia.

Arab tourist traffic shifted dramatically to Asia from the U.S. and Europe after the Sept. 11, 2001, terror attacks in the U.S., and Arab traffic to Asia has been growing steadily since, particularly to Malaysia, Indonesia, Singapore and Thailand.

"There has a been a short retraction because of the tsunami, but bookings for next season are back to normal," Abdul Wahab said, referring to the Dec. 26 earthquake and massive waves that killed over 150,000 people and devastated Asian tourist hotspots such as Phuket and the Maldives.

Arab airlines, led by Emirates Airline (EA.YY) and Qatar Airways, are leading the industry growth in overseas revenue.

Emirates claims to be among the world's five most profitable airlines. It reported a 74% rise in net profit to US$429 million for the year ended March 31, 2004.

While the Middle East continues to be plagued by the Arab-Israel conflict and tensions in Iraq, Arab airlines have found "an oasis of stability" outside the region, Abdul Wahab said.

They have also benefitted from Arabs' increased disposable income amid rising oil prices, which result in greater revenue for oil-exporting countries, he said.

Such higher income of customers has offset the rise in fuel costs for these airlines; fuel costs have increased from 15% of total costs in 2000 to the current 23%.

IATA says 2004 air passenger traffic rose 15.3 pct but losses reach US$4.8 bln
31 January 2005

GENEVA (AFX) - The International Air Transport Association (IATA) said world air passenger traffic staged a 'phenomenal' recovery in 2004 and grew by 15.3 pct from 2003, but airlines struggled to find profits, the chief industry association said.

IATA said in a statement that all regions had reported double digit growth, led by the Middle East with 24.8 pct passenger growth for 2004 over the previous year.

However, industry-wide losses reached an estimated 4.8 bln usd with the price of fuel remaining 'a critical factor for airline profitability,' according to the association, which groups 270 major carriers.

Asia recorded 20.5 pct growth in air passenger traffic in 2004, it added.

'The traffic recovery in 2004 was phenomenal across all regions,' said Giovanni Bisignani, director general of IATA.

Growth in Europe reached 10.1 pct, while air passenger traffic in North America rose 14.8 pct.

The global growth data exceeded IATA's predictions last month of 11 pct growth for 2004 as a whole.

'The challenge for 2005 is to turn traffic growth into profitability with improved cost efficiency across the industry's value chain,' Bisignani said.

IATA forecast that the industry as a whole could achieve profits of 1.2 bln usd this year, provided oil prices average 34 usd a barrel.

However a barrel of North Sea Brent crude was trading at 43.96 usd in London today.

Bisignani said his members are trying to cut costs and increase efficiency, and urged other parts of the air transport supply chain -- notably air traffic control and airports -- to slash their bills.

'We ask the same of our partners, many of whom are monopolies,' he told a meeting of the Civil Air Navigation Services Organization (CANSO), which groups air traffic control operators worldwide, in the Dutch city of Maastricht.

IATA said the bill for air traffic control had increased by 9.4 pct since 1999 to 8 bln usd while airline yields had fallen.

Bisignani charged that the cost efficiency of air navigation firms was 'simply not good enough'.

'Our customers demand that we evolve to a low cost industry with simplified business processes. Our partners, including navigation service providers and airports, must be a part of that evolution,' he added.

Bisignani reiterated a call for more harmonisation of air traffic control across borders and for airlines to have a say in the adoption of new technology.

Airliners had managed to save 1.1 bln usd in 2004 by negotiating with governments, notably in Iraq, China and Mexico, to make flights more direct, reducing the duration of a journey, IATA underlined last month.

Major carriers have also suggested making electronic tickets the norm instead of traditional paper copies, and called for cuts in airport landing and handling fees.

IATA does not include independent budget airlines such as Easyjet and Ryanair, which have brought stiff low-fare competition to the industry.

Asian airlines carry record number of passengers, cargo in 2004: AAPA
03 February 2005
Agence France Presse

Airlines based in the Asia Pacific carried a record number of passengers and cargo in 2004 and the outlook remains buoyant for this year, an industry association said Thursday.

The Association of Asia Pacific Airlines (AAPA) -- which groups 17 premium carriers -- said 117 million passengers were carried last year, up 22.5 percent from the SARS-ravaged year of 2003 and 7.3 percent higher than 2002.

Air cargo volumes also set new records, with traffic measured in freight tonne-kilometres up 12.9 percent.

The record air and cargo volumes were achieved despite growing competition from low-fare carriers and high oil prices, which touched record levels near 60 dollars a barrel in October.

"Helped by strong global economic growth, 2004 was a remarkable year in terms of traffic recovery and new growth for the AAPA member airlines," said AAPA director-general Andrew Herdman in a statement received here.

"Despite high fuel prices and competitive pricing pressures, the strong traffic growth and tight cost controls led to a general improvement in profitability."

Herdman said passenger traffic should grow 6.0-7.0 percent this year, with AAPA member airlines expecting the delivery of 73 aircraft in addition to the existing fleet of 1,273, mainly wide-bodied planes.

The AAPA members are Air New Zealand, All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, China Airlines, Dragonair, EVA Air, Garuda Indonesia, Japan Airlines, Korean Air, Malaysia Airlines, Philippine Airlines, Qantas Airways, Royal Brunei Airlines, Singapore Airlines, Thai Airways International and Vietnam Airlines.

European airport traffic up 7.5 percent in 2004, airport group says
11 February 2005

BRUSSELS, Belgium (AP) - Europeans flew 7.5 percent more in 2004 than 2003, according to statistics released Friday by Airports Council International Europe, the nonprofit group representing 450 European airports.

The biggest airports in Europe, such as London Heathrow, Paris Roissy and Frankfurt with more than 25 million passengers per year, experienced an average increase of 3.2 percent in 2004.

Ronan Anderson, communications manager for ACI Europe, based in Brussels, said the increase in air-passenger traffic showed positive signs that the airline industry was finally bouncing back and surpassing the slump experienced after the Sept. 11, 2001 terrorist attacks.

"Historically, traffic has always increased by 5 to 6 percent or so per year," Anderson said. "We're just getting back to that level."

Highlighting the rise since the attacks, Anderson said London Heathrow had 67.3 million passengers in 2004, compared to 64.6 million in 2000.

Anderson said he expected the air traffic in Europe to double by 2020.

The ACI's report also said the greatest percentage increase in passenger traffic, 11.1 percent, occurred at airports with less than 5 million passengers per year. Regional airports at Liege; Belgium; Riga, Latvia; and Girona, Spain, each had increases of more than 90 percent.

Anderson said the increase in the smaller airports was greatly attributed to low-cost airlines like Ryanair and EasyJet encouraging more travel throughout Europe.

"The explosion of traffic at these regional airports due to low-cost airlines has had a massive impact on traffic throughout Europe," he said.

On Tuesday, the European Union head office announced it would create new rules to clarify what aid can be given to regional airports and airlines across Europe.

Airlines temper enthusiasm for strong travel growth amid high oil prices

GENEVA, Feb 28 (AFP) - International air travel grew by 7.9 percent in January, marking a stronger than expected growth in business for airlines compared to the same month last year, the main industry body said Monday.

But the International Air Transport Association (IATA) predicted that passenger traffic would grow by just 5.9 percent this year, well below the "phenomenal" 15.3 percent growth experienced in 2004 when the industry emerged from a slump in air travel.

Although the forecast was close to annual growth targets until 2008, IATA warned in a statement that high oil prices would also continue to harm airline finances.

"While the profitability picture for the industry is increasingly regionalised there is a universal theme for 2005: austerity," IATA Director General Giovanni Bisignani said.

"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," he added.

Growth in the Asia and Pacific region was stifled by the tsunami that devastated some major tourist areas in south Asia in late December, according to IATA, which groups 270 major carriers.

Air passenger traffic in Asia edged up 2.5 percent in January.

"We are off to a great start for 2005 for international traffic," Bisignani said.

"There is stronger than expected growth in all regions, except for Asia Pacific which suffered from the impact of the Indian Ocean tsunami," he added.

Global air freight traffic grew by 15.5 percent in January.

Despite its caution for the coming year, IATA said Asian, European and Middle Eastern carriers were reporting better profits.

But it warned that beneath strong air traffic, airlines in the United States were struggling financially as yields on domestic flights came under pressure.

Airlines in the US had been propped up by the continuing weakness of the US dollar and had redeployed capacity to international routes in order to post an 11.8 percent increase in air travel in January, the industry group said.

IATA also criticised new government regulation of the air transport industry, especially the European Union's introduction of new, boosted, compensation for passengers who suffer delays or cancellations.

"These add costs and complexity to an industry that is simplifying to reduce costs and provide better value to consumers," Bisignani said.

"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," he added.

French President Jacques Chirac recently revived the idea of a possible international tax on air tickets as a way of raising revenue to fight poverty.

Airlines in some parts of western Europe are facing competition from an expanding network of high speed railway services built by state-owned operators in recent years.

Asia-Pacific travel up 1.3 percent in January: AAPA

AFP - Passenger traffic in the Asia Pacific rose 1.3 percent in January from the previous year to more than 10 million, an industry group said.

The small percentage rise was due to a higher base of comparison as the Lunar New Year holidays last year fell in January, compared with February this year, the Association of Asia Pacific Airlines (AAPA) said in a statement.

"The small measure of positive passenger traffic growth in January did not quite match the growth in capacity but does reaffirm the underlying strength of travel demand," said AAPA director-general Andrew Herdman.

"Any post-tsunami effects appear to have been limited to specific areas within the region."

Airlines based in the region carried 10.072 million passengers in January, compared with 9.946 million in January 2004, with the load factor falling to 74.1 percent from 75.8 percent.

Freight traffic in January jumped 10.7 percent as last year's Lunar New year holidays dampened manufacturing activity.

AAPA members are Air New Zealand, All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, China Airlines, Dragonair, EVA Air, Garuda Indonesia, Japan Airlines, Korean Air, Malaysia Airlines, Philippine Airlines, Qantas Airways, Royal Brunei Airlines, Singapore Airlines, Thai Airways International and Vietnam Airlines.

Big airlines fare badly in industry tell-all report
Murray Bailey
14 March 2005
South China Morning Post

For the second year running, the Association of European Airlines (AEA) has produced an annual report where member airlines list their flight delays and baggage mishandling.

AEA does not want this to be treated as a ranking of the best and worst airlines, but it is unfortunately inevitable.

The only sizeable airline on the "best" list was SAS-Scandinavian for on-time arrivals, which it also achieved last year. The overall winner was another Nordic airline, Finnair.

The "worst" list included a few big airlines - Air France, British Airways and KLM (which all made the list in both reports).

Note, however, some AEA members (including Aer Lingus and Virgin Airlines) don't provide data - raising suspicions that they have something to hide.

Also, it seems difficult to believe Icelandair's (and Air Malta's in 2003) 100 per cent flight regularity - the percentage of flights performed as planned. Particularly because both airlines also figured in the "worst" list for late arrivals or departures. An integrity check is perhaps in order.

In the meantime, could Asia's equivalent to AEA - the Kuala Lumpur-based Association of Asia Pacific Airlines - match this for the region's airlines? And would the airlines dare to tell all?

In the past, Hong Kong was a world champion in terms of the amount of money visitors spent in the city on a per-person basis. Those times, it seems, have long gone.

The latest available data shows that even Thailand takes in more dollars from its visitors.

This is partly because visitors stay a shorter time in Hong Kong than in a destination such as Thailand - less than four days for the former compared to around 10 for the latter. The good news, however, is that spending growth in Hong Kong last year was fast.

Among its main competitors, Hong Kong's spending growth was about the same as in Australia and the mainland, but faster than Singapore and Thailand.

All regional airports reported fast growth last year, but Guangzhou looked likely to beat Hong Kong in the final tally.

Over the first 11 months, Hong Kong had 39.1 per cent growth in passengers compared with 38 per cent at Guangzhou. However, the new airport serving Guangdong's capital saw faster growth later in the year.

Hong Kong residents seem to be increasingly reluctant to take trips to destinations other than the mainland, according to indications from the latest figures.

Although the number of travellers from Hong Kong (excluding the mainland) grew 13 per cent last year, much of it was recovery from declines in the two previous years.

Also, the rate of growth was much slower than for the other major travel markets in the region which ranged between 25 and 30 per cent each for Japan, Korea, and Taiwan.

Final results from the mainland are not yet available, but its growth will have been the region's strongest at about 50 per cent last year and reaching a total of 30 million departures.

However, there is some mystery about how much money is spent by those travellers.

The World Tourism Organisation puts Hong Kong's total quite high at US$11 billion - higher than for both Korea and Taiwan, even though they have a higher traveller count.

The spending figure looks too high if based on travellers to destinations other than the mainland (US$2,200 per trip), but too low if travel to the mainland is included (under US$400). Also looking low is the total spending on international travel by mainland travellers; the organisation says it totalled US$15.2 billion in 2003.

Macau may have assumed it would be the first choice for gambling tourism by mainlanders, but there are challengers.

Two doing big business with mainland gamblers are Myanmar and the Philippines - but a long way from their capitals.

In Myanmar, the gambling centre is Mongla in northeast Shan state on the border with China's Yunnan province.

In the Philippines, it is Laoag in the north, where former president Ferdinand Marcos was born, and where he built an ill-fated international airport.

Both areas have been transformed by casinos with gamblers from the mainland, although Laoag also has a sizeable portion hailing from Taiwan.

Mongla gets an average 1,000 visitors daily from the mainland while Laoag gets four charter flights daily.

Compiled by Murray Bailey, research director and editor, Travel Business Analyst

Number of world commercial aviation deaths falls to just over 400

MONTREAL, March 15 (AFP) - The number of people killed in commercial aviation accidents in 2004 dropped to just over 400, compared to 700 the year before, the International Civil Aviation Organisation (ICAO) said Tuesday.

There were nine fatal accidents among regularly scheduled carriers last year, taking the lives of 203 passengers, compared to seven accidents which killed 466 people the year before.

Charter firms were involved in 18 fatal accidents which killed 207 people in 2004, 10 fewer deaths than in 2003.

The ICAO also collated statistics for people killed by acts of terrorism and sabotage in the aviation industry.

In 2004, 91 people were killed and 8 injured in 16 incidents, mainly in the mid-air explosion of two Russian planes claimed by Islamic extremists.

IATA has plan to save airlines billions

NEW YORK, April 4 (Reuters) - Cutting-edge technology that would lower costs for airlines and make travel easier for passengers is exactly what the ailing airline industry needs, International Air Transport Association chief Giovanni Bisignani said at a conference on Monday.

At the Airfinance conference in New York, Bisignani offered a bleak outlook for the airline industry - forecasting it would lose $5.5 billion in 2005 - but said the implementation and standardization of new technology should save airlines close to $10 billion a year.

"With the drastically deteriorating profits in the airline industry, we have to be proactive about returning to profitability," Bisignani told Reuters in an interview on the sidelines of the conference.

The IATA, an industry group that co-ordinates aviation rules and standards, calls its new plan "Simplifying the Business," and is made up of four main parts.

The first part, which would save the industry $3 billion a year, eliminates paper tickets by the end of 2007.

Globally, electronic tickets account for only 35 percent of all tickets issued, up from 10 percent in 2001.

The IATA, which alone sells over 300 million paper tickets a year, expects 40 percent of its tickets to be electronic in 2005, up from 19 percent in 2004.

The second and third parts will standardize electronic boarding passes and self-service kiosks, both of which would allow usage over multiple airlines.

The fourth part -- and the one that will likely take the longest and cost the most -- revolves around standardizing the process of switching baggage labels to wireless tags from printed bar codes, based on radio-frequency identification technology.

Of the 1.5 billion bags carried by commercial flights each year, about 0.7 percent get lost or misplaced. Dealing with the process costs an airline about $100 per bag, Giovanni said. "The implementation of this process might cost them something, but they will benefit from the return of investment - monetarily, as well as from customer goodwill."

The accuracy of printed bar-codes can be as low as 80 percent, as crumpled or torn labels are misread by machines that process bags, but RFID tags have accuracy rates higher than 95 percent, according to the IATA.

But Delta Air Lines , the first U.S. carrier to test the technology, said it has "indefinitely deferred" the testing due to a cash crunch.

"This kind of technology requires a multi-year investment before it would begin to pay for itself," Delta spokesman Anthony Black said in an interview. "And in our current operating environment, such projects are low on our priority list, and are being deferred for projects that have quicker returns."

Frontier Airlines Chief Financial Officer Paul Tate also said the airline would not invest in any technology that was not already proven to make returns. "I would think all low-cost carriers would feel this way," he said in an interview at the sidelines of the conference.

But KLM Airlines and Japan Airlines have tested RFID baggage-tagging on the route from Schipol, Amsterdam, to Narita, Japan, and another trial at Montreal Airport tested a process that generates RFID tags at kiosks, allowing self-service check-in for passengers with bags to check.

In keeping with the efforts to lower airlines' costs, Giovanni is also seeking independent regulators for airports and air traffic control operations, who, he says, charge airlines "way too much" for their services. Airlines spend $40 billion on such services every year.

Bisignani also said governments must stop passing national security costs to airlines and passengers. Airlines have paid $5.6 billion in additional security costs since the September 11, 2001, attacks on the World Trade Center, he said.

"Three and a half years after September 11, security is tough, but the system is still a mess. And airlines and customers get the $5 billion bill for the resulting inefficiency."

31 March 2005
IATA Release
February Traffic Growth Slows in Line with Projections -Asia Recovers from Tsunami Impact

Data : http://www.iata.org/pressroom/industry_stats/2005-03-29-01.htm

(Geneva) "February traffic growth gave mixed signals. A slowing of global economic activity saw passenger traffic fall to 6.6% year-on-year from the 7.9% reported in January. The good news is that the resilience of air travel was once again demonstrated in the aftermath of the Asian Tsunami. Growth for Asian carriers returned to normal levels, partially boosted by Chinese New Year travel," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).

February passenger traffic growth of 6.6% brought year-to-date passenger growth to 7.3%. All regions reported positive growth with the Middle East and Latin America being the strongest performers. Asia Pacific largely recovered from the impacts of Tsunami, posting a 7.9% year-on-year increase for February.

Cargo slumped by 0.9% in February, although year-to-date figures maintained positive growth of 6.5%. Weaker global economic activity and a slump in Chinese imports during the Chinese New Year period are largely to blame for this.

Year-to-date load factors remained high at 72.7%. Latin American and North America led with average load factors at 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," said Bisignani.

"The return of a discussion on the North Atlantic Open Aviation Area to the industry's agenda is a golden opportunity for the US and Europe to lead change with liberalisation. A modern set of rules that gives airlines the freedom to do business like real businesses—without the constraints of archaic bilateral rules and ownership restrictions—has never been more important to the health of our industry," said Bisignani.

Airline profits hit by oil price


High oil prices could cost airlines £2.9bn ($5.5bn) this year and cause business failures, the International Air Transport Association has warned.

At the AirFinance conference in New York on Monday, IATA said that total losses for the industry could be as high as $40bn from 2001 to 2005.

The forecast 2005 loss is based on an average price for Brent Crude of $43 a barrel. On Monday, Brent hit $57.10.

The high costs threaten the survival of several airlines, especially in the US.

Risky business

United Airlines and US Airways are still trying to emerge from bankruptcy protection.


Giovanni Bisignani, chief executive of IATA, told the conference the air transport industry was "fragmented, constrained and quite frankly in many places a disaster".

However, he suggested a number of measures could improve the situation. He said governments should reduce regulation for the airlines but increase it for the monopolies they are forced to use, such as airports and air traffic control systems.

"We see record profits at airports, when airlines have record losses," Mr Bisignani said.

"Airlines do the flying and everybody else makes the money."

He also argued that governments should cut taxes for airlines, which despite their difficulties in making money are seeing passenger traffic rise six per cent a year.

http://news.bbc.co.uk/1/hi/business/4411169.stm

April 6, 2005
IATA unveils plan to help airlines save $16b a year
Carriers urged to invest in cutting-edge technology

NEW YORK - THINGS look grim again for the global airline industry, and what is needed is cutting-edge technology to lower costs for airlines and make travel easier for passengers.

'With the drastically deteriorating profits in the airline industry, we have to be pro-active about returning to profitability,' said International Air Transport Association (IATA) chief Giovanni Bisignani.

The IATA, which coordinates aviation rules and standards, said the industry faces losses of up to US$5.5 billion (S$9.2 billion) this year, due mainly to rising fuel costs.

Airlines, which spent US$63 billion on fuel last year, are projected to spend US$76 billion this year, based on an oil price of US$43 per barrel.

Mr Bisignani said the industry lost US$35 billion between 2001 and last year because of high oil prices, low traffic volumes, intense competition and high operating costs.

But the IATA chief said his association's plan for the implementation and standardisation of new technology should save airlines close to US$10 billion (S$16.7 billion) a year.

The plan has four main parts.

The first calls for eliminating paper tickets by the end of 2007.

The IATA said this alone would save the industry US$3 billion a year.

Globally, electronic tickets account for only 35 per cent of all tickets issued, up from 10 per cent in 2001.

The second and third parts will standardise electronic boarding passes and self-service kiosks, both of which would allow usage over multiple airlines.

The fourth part - the one that will likely take the longest and cost the most - revolves around standardising the process of switching baggage labels from printed barcodes to wireless tags that use radio-frequency identification technology (RFID).

Of the 1.5 billion bags carried by commercial flights each year, 0.7 per cent get lost or are misplaced.

Dealing with the process costs about US$100 per bag, Mr Giovanni said.

'The implementation of this process might cost them something, but they will benefit from the return of investment - monetarily, as well as from customer goodwill.'

Accuracy in identifying bags by barcodes can be as low as 80 per cent, as crumpled or torn labels are misread by machines that process bags, but RFID tags have accuracy rates higher than 95 per cent, according to the IATA.

But the first American airline to test the technology, Delta Air Lines, said it had 'indefinitely deferred' further testing due to a cash crunch.

'In our current operating environment, such projects are low on our priority list,' Delta spokesman Anthony Black said.

Frontier Airlines is also not planning to invest in any technology that was not already proven to make returns, said its chief financial officer Paul Tate.

'I would think all low-cost carriers would feel this way,' he said.

KLM Airlines and Japan Airlines have tested RFID tagging on the Schipol-Narita route, and Montreal Airport is testing RFID kiosks that allow self-service check-ins for passengers with bags to check.

Mr Bisignani also wants independent regulators for airports and air-traffic control operations, who, he says, charge airlines 'way too much'.

Airlines spend US$40 billion on such services every year.

The IATA added that governments must stop passing national security costs to airlines and passengers.

'Three and a half years after Sept 11, security is tough, but the system is still a mess.

'And airlines and customers get the US$5 billion bill for the resulting inefficiency.' \-- REUTERS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 06 Apr 2005

Airline industry's fragile recovery under threat

But Asian carriers seen better placed than American airlines in face of rising oil prices

By VEN SREENIVASAN

(SINGAPORE) Spiralling oil prices could wreck the global airline industry's fragile recovery and destroy some carriers, particularly in North America. But Asia-Pacific players seem better placed to ride out any storm.

Analysts and industry insiders see stormy skies ahead as jet fuel prices keep soaring in line with crude oil, which has gone up 50 per cent this year.

'It's getting scary,' a Singapore-based airline executive said yesterday. 'We are way beyond our break-even levels.'

Giovanni Bisignani, Director-General and CEO of the International Air Transport Association, warned this week that global airlines could lose a total of US$5.5 billion this year. And that's a conservative estimate.

Mr Bisignani told an air finance conference in New York that the industry's fuel bill - which climbed from US$44 billion in 2003 to US$63 billion last year - will be around US$76 billion based on an average oil price of US$43 a barrel.

But oil prices have already soared way above this mark. Benchmark Brent crude this week hit record highs of US$58 in New York.

'The high price of fuel is robbing our profitability,' Mr Bisignani said. 'We have lost our balance as an industry.'

A US$5.5 billion loss this year would take the global airline industry's accumulated 2001-05 losses to more than US$40 billion.

US and European players are seen as most at risk - but Asian airlines won't go unscathed.

After chalking up a combined profit of more than US$3 billion last year, they could see earnings flatten - or fall - this year. But buoyant passenger traffic means they won't go into the red.

'We are bullish despite higher fuel costs,' said Peter Harbison of the Centre for Asia Pacific Aviation (Capa). 'Asia-Pac will be lower this year if fuel prices stay up, but will still be very much in the black.'

Indeed, analysts seem to be in no hurry to rejig their profit forecasts for regional carriers. 'We are watching the situation,' said Seah Hiang Hong of Kim Eng Research. 'Who knows, oil prices can recede just as sharply.'

Mr Seah expects Singapore Airlines - where fuel accounts for 25-30 per cent of total operating costs - to earn about $1.36 billion in its current financial year ending March 2006. SIA made a $1.1 billion profit for the nine months to end-December 2004.

The region's other big player, Australia's Qantas, expects to post a record annual profit this financial year, beating last year's A$964.6 million (S$1.2 billion), which was itself a record.

At ground level, the question now seems to be when - not whether - SIA, Qantas and others around the region raise their fuel surcharges.

Olivia Wong, Singapore country manager for Cathay Pacific, says her airline has no immediate plans on this front. 'But it's tough,' she said.

'Fuel is one of the costs we can't control. And our fuel surcharge doesn't even cover half of the rise in the fuel price. I guess we just have to find smarter ways of doing business,' Ms Wong added.

Fuel accounts for a quarter of Cathay's total expenditure, and every one US cent rise in the price of a gallon adds HK$60 million to operating costs.

For SIA, every one per cent rise in fuel depresses profit 1.5 per cent. But chief executive Chew Choon Seng said last month the airline will only raise its fuel surcharges if fuel prices rise more than US$10 a barrel.

'We last reviewed our fuel surcharge at the end of last year. I do not foresee any immediate adjustment to the fuel surcharge,' he said.

But fuel has risen almost US$20 since the start of last month.

SIA introduced fuel surcharges in June 2004 and raised them five months later in November. It now charges $4 a ticket from Singapore to Kuala Lumpur, $10 to other Asian destinations and $22 a ticket for flights elsewhere.

The only good news is that regional carriers are expected to benefit from 20-25 per cent air passenger traffic growth in the region this year.

'The growth in Asia-Pacific markets and the still-privileged position that the national flag carriers hold means that they should perform well again in 2005,' Capa's Mr Harbison said. 'That assumes no major shocks - and that fuel prices stabilise and decline over the year.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Date: 04 April 2005
Rebalancing the Air Transport Industry
- US$5.5 billion Industry Loss Expected for 2005
IATA Press Release

(New York) "The high price of fuel is robbing our profitability," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association at the opening of the AirFinance conference in New York. "The fuel bill has risen from US$44 billion in 2003, US$63 billion last year. If oil averages at US$43 per barrel (Brent) for 2005, the bill will be US$76 billion. And that would leave us with an industry loss of US$5.5 billion for 2005 and over US$40 billion for the period 2001-2005," said Bisignani.

"We have lost our balance as an industry. Change is critical," said Bisignani.

"We cannot live with the half-measures and contradictions of the past. Governments intensified airline competition without effective regulation of monopoly suppliers that account for 10% of operating costs. The cost of labour as a percentage of operating costs ranges from 18% in Asia to 38% in the US. And it has been stubbornly difficult to reduce. So it is result of tremendous hard work at restructuring and re-engineering their businesses that airlines have reduced non-fuel unit costs by 2-3% annually," said Bisignani.

Bisignani outlined a vision for change that involves airlines, governments and the industry's monopoly suppliers—airports and air navigation service providers.

"Everybody has a role to play. Airlines must Simplify the Business by eliminating complex processes that are expensive but add no value to our customer. Industry-wide e-ticketing alone will save US$3 billion in costs each year. Our monopoly partners—airports and air navigation service providers—cost us US$40 billion a year. They must understand the need for gains in cost efficiency and deliver measurable results," said Bisignani.

Bisignani singled out governments for adding costs to the industry,

"Deregulation was meant to foster competition and lower the cost of air travel. But governments continue to milk the industry for taxes and charges that are at the levels of alcohol and tobacco. In the US, the average tax charged on a US$200 ticket has increased from 7% in 1972 to 26% in 2004—or US$ 15.8 billion. Moreover, we cannot accept the US$ 5.6 billion global cost burden for security that governments are passing annually to the industry. Governments must take responsibility and pay for national security," said Bisignani.

Bisignani challenged governments to take a different approach with air transport.

"We have nationalistic rules for businesses that compete globally. And, in place of a strong vision and leadership for our industry's future, governments micro-manage and mis-regulate. In Europe alone, mis-regulation and micro-management cost the industry EUR 5.9 billion each year. We need modern rules that will allow us the same freedoms that other global businesses take for granted. Ownership and control rules that restrict access to global capital are of a different age. We need to run our businesses like real businesses. Markets and competition must shape the future of our industry, not the 60 year-old bilateral system," said Bisignani.

Bisignani drew a comparison between a deregulated telecommunications industry and aviation.

"Both of these industries have importance as strategic components of a nation's infrastructure. For both, deregulation resulted in declining yields in excess of 30% between 1991 and 2004. But the playing fields are completely different. The telecom industry has access to global capital, facilitating cross-border mergers. Customers are well-served and the companies are financially healthy. Air transport is fragmented, constrained and, as a result, a financial disaster in many places. Governments agreed on progressive liberalisation through the International Civil Aviation Organization (ICAO). It is time for government leadership to implement the vision," said Bisignani.

Urgent action is needed.

"The livelihood of 28 million people in aviation and aviation related activities and US$1.8 trillion of economic activity are at stake. Governments must act quickly in areas that are their responsibility and then get out of the way. We need to get on with business," concluded Bisignani.

Business Times - 12 Apr 2005

Discount airlines make great strides

Number of budget flights doubles in four years worldwide

(TOULOUSE) Low-cost airlines operate one out of every eight flights worldwide, doubling the number four years ago and putting increased pressure on full-service carriers.

Discount airlines such as Ryanair Holdings in Europe, JetBlue Airways in the US and AirAsia Bhd in Asia account for 12 per cent of all scheduled flights and 15 per cent of all available seats, according to figures released in a statement yesterday from the Official Airline Guide (OAG).

The rising competition helped contribute to a combined US$9.2 billion in losses last year for US network carriers and to consolidation among European airlines.

Southwest Airlines, the world's largest low-cost carrier, has never reported a loss and earned US$313 million last year. Discount airlines JetBlue, AirTran Airways and Frontier Airlines were profitable as well.

'The low-cost phenomenon continues to break all records,' said Duncan Alexander, managing director of business development at the airline guide, based in Bedfordshire, the UK. Compared with this time last year, low-fare airlines are this month operating 19 per cent more flights, and offering 20 per cent more seats.'

The global number of flights now exceeds those from the first quarter of 2001, before the Sept 11 terrorist attacks battered demand for air travel, the OAG said.

The world's airlines will operate more than 2.27 million flights this month. That is 111,000 more than a year ago and 45,000 more flights than in April 2001.

This month, the airlines will have a potential 260 million available seats for sale, the organisation said.

Low-cost airlines will account for just shy of 300,000 flights, or about 38 million available seats.

Discount airlines accounted for only for 6 per cent of the world's flights and 8 per cent of available seats in April 2001, according to the guide, which tracks flight details for 1,000 airlines and about 3,500 airports.

Europe, the Middle East, and Africa are showing the fastest growth for discount airlines, the guide said. In Europe, there are 24 per cent more budget flights today than in April last year.

Air France bought KLM Royal Dutch Airlines in May 2004 and Swiss International Air Lines last month agreed to be acquired by Deutsche Lufthansa AG in takeovers that were in part attributed to the increased expansion of the low-cost carriers.

In the US, where the discount airline industry first got started, the number of flights has increased 12 per cent from a year earlier.

Since April 2001, the low-cost airlines have boosted their share of the US market to 17 per cent from 12 per cent. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

IATA Head Says Fuel Cost May Put Some Airlines In Trouble
12 April 2005

TOKYO (Dow Jones)--Continued rises in oil prices could put some airlines in serious jeopardy as surcharges and fare hikes will never be enough to cover spikes in operational costs, the head of a global aviation industry body said Tuesday.

"We'll seem some airlines going through very, very difficult moments because of fuel," if prices continue to rise through the summer, International Air Transport Association Chief Executive Giovanni Bisignani said at the Foreign Correspondent's Club of Japan.

Some airlines have extremely limited defenses against rising fuel costs as it is practically impossible to keep raising fuel surcharges or fares due to stiff industry competition, Bisignani said.

"The problem is that we have too much capacity," he said.

The IATA estimates that the airline industry's fuel bill grew to $63 billion in 2004 from $43 billion in 2003. If the average price of Brent fuel for this year is $43 per barrel, the bill will further increase to $76 billion in 2005, Bisignani said.

Samba Time! Delta Begins Atlanta - Rio de Janeiro Service October 1
Wednesday April 13, 10:10 am ET

Delta Air Lines' new daily service from Atlanta to Rio de Janeiro, beginning Oct. 1.
Delta plans to serve Rio daily from Atlanta with Boeing 767-300ER aircraft, carrying 204 passengers in a two-class configuration.

"Customers now have more choices to fly directly to either of Brazil's two largest cities -- Rio de Janeiro or Sao Paulo -- from Delta's convenient Latin American gateway in Atlanta," said James Sarvis, director-Latin America and Caribbean. "International markets are growing in customer demand, and Brazil represents a very attractive and strategic tourist and business destination for travelers. Delta is pleased to be adding service to this rapidly growing market as we expand our international destinations."

IATA: March Intl Airline Passenger Traffic +12.1% On Yr
28 April 2005

LONDON (Dow Jones)--International scheduled airline passenger traffic in March 2005 was up 12.1% from a year earlier while cargo traffic showed a 0.8% rise, The International Air Transport Association said Thursday.

The passenger load factor in the month was 75.0%, IATA said.

Giovanni Bisignani, Director General and CEO of IATA, said airlines are still facing a difficult year.

"Intensified cost cutting and better aircraft utilization are steps in the right direction. But they (airlines) cannot keep pace with the increases in the industry's fuel bill. From 2003 to 2004 the industry fuel bill rose by $19 billion from $44 billion to $63 billion," he said.

"At an average fuel bill of $43 per barrel (Brent), the fuel bill for 2005 will exceed $76 billion-and even that seems conservative given today's prices. Fundamental and large-scale change is absolutely critical," said Bisignani.

IATA represents 265 airlines comprising 94% of international scheduled air traffic.

Beginning May 1st, Korean Airlines will increase their 5x per week Boeing 747-400 nonstop service from Atlanta to Seoul to daily service.

Friday April 29, 2:34 AM
Major airlines carry more passengers but struggle with rising fuel prices

GENEVA (AFP) - Airlines carried 9.4 percent more passengers during the first quarter of 2005 compared to the same period last year but are unable to keep pace with rising fuel prices, the main industry association said.

The International Air Transport Association warned that the "good news" would not be enough to secure profits for struggling airlines in the coming year.

"With oil in the 50 dollar per barrel (Brent) range we are a long way from profitability," Giovanni Bisignani, director general of IATA, said in a statement.

Bisignani said increased cost cutting and more efficient use of aircraft could not keep pace with the industry's fuel bill.

IATA predicted in a "conservative estimate" earlier this month that airline fuel costs will reach 76 billion dollars this year against 63 billion dollars last year.

"However you look at it, 2005 is shaping up to be another difficult year for the airlines. Fundamental and large-scale change is absolutely critical," Bisignani added.

Freight traffic expanded at a slower 4.2 percent in the first three months of this year, prompting some concern in the industry.

"While it is too early to identify a slowing trend in freight traffic, we need to watch this development closely over the coming months," the IATA chief said.

Twenty-six percent of the tickets sold by IATA members in the first quarter were cost-saving electronic tickets against 19 percent at the beginning of 2004.

The association, which groups 275 airlines, is aiming for a 40 percent take-up of "e-ticketing" this year and complete paperless ticketing by the end of 2007.

Electronic ticketing is estimated to cost one-tenth of the traditional paper slip, potentially saving airlines up to three billion dollars a year, according to IATA.

IATA: April Intl Airline Passenger Traffic +7.5% On Year
26 May 2005
Edited Press Release

LONDON (Dow Jones)--International scheduled airline passenger traffic in April 2005 was up 7.5% from a year earlier while cargo traffic showed a 5.3% rise, The International Air Transport Association said Thursday.

The passenger load factor in the month was 73.4%.

IATA represents 265 airlines comprising 94% of international scheduled air traffic.

After three years of crisis, air transport readies for takeoff

PARIS, June 8 (AFP) - After three lean years, international air travel faces a brighter future as ticket sales take off and costs drop, but the future is overshadowed by high fuel costs and an excess capacity that may force new mergers.

With the important exception of the big US companies, airlines -- the chief clients at the Paris Air Show this month -- have seen matters improve this year.

"Parts of the industry are profitable," Giovanni Bisignani, director general of the International Air Transport Association (IATA), acknowledged at the end of last month at its annual general meeting in Tokyo.

But overall he painted a sombre picture of the state of the industry's health and IATA does not see an overall return to balance until next year, with losses totalling six billion dollars (4.88 billion euros) in 2005.

Since 2001 airlines have been hit by a series of hammer blows, including the global economic slowdown, the September 11, 2001 attacks in the United States, the SARS (Severe Acute Respiratory Syndrome) epidemic and the conflicts in Afghanistan and Iraq.

"Losses between 2001 and 2004 exceeded 36 billion dollars," Bisignani said at the Tokyo meeting.

In 2004, "North American carriers lost nine billion dollars. Efficiency gains cannot make up for structural problems. Labour costs remain high. And low-cost competition at major hubs drove yields down," he said.

"European carriers posted a profit of 1.4 billion dollars. Yields were better. And consolidation helped capacity management.

"Asian carriers posted 2.6 billion dollars in profit. Strong growth fuelled by China and low labour costs are the competitive advantage. And India may be the next great market for the industry."

The contrast between US carriers and the rest is explained by the particular nature of the North American market, according to former IATA president and current Air France-KLM president Jean-Cyril Spinetta.

"European companies mainly operate international long-haul flights while their American counterparts fly internal routes" and therefore "face more competition from low-cost carriers."

The improvement in the fortunes of non-US companies is attributed to a rise in traffic and pressure on costs.

Passenger numbers rose by 8.7 percent from January to April, IATA said, and freight by 4.7 percent. Traditional companies put their costs under the microscope to improve profit margins.

In mid-May the Spanish airline Iberia announced a new cost-savings plan worth 500 million to 600 million euros and the US carrier Northwest Airlines plans to halve staff numbers to save 176 million dollars.

By 2007 paper tickets will be abandoned in favour of less time-consuming electronic, or e-tickets, IATA said.

The savings drive is made all the more essential by the fact that aviation fuel costs have soared by between 15 and 20 percent after the rise in the price of oil.

But "the main problem in the sector... is that there is too much capacity," according to Spinetta, of Air France-KLM, the first carrier born of the merger of two national airlines.

The point is made by developments in recent months: America West has merged with US Airways, TAP (Portugal) has said it plans to take a 20 percent stake in Brazil's Varig and Germany's Lufthansa has bought Swiss International Air Lines.

If the rescue plan for the Italian carrier Alitalia is successful and it is privatised, Air France-KLM would like to enter into partnership with it.

And the head of Iberia, who has close ties to British Airways, said recently the Franco-Dutch merger was "an interesting path to follow."

Air Transport Needs Common Sense, Not More Taxation
Development Needs Commitment, Not Politics

For Immediate Release - (Geneva) The International Air Transport Association (IATA) expressed extreme disappointment that the ECOFIN meeting in Luxemburg yesterday did not result in the abandonment of proposals for a tax on air transport to support third world development.

"Development is a serious issue that needs a serious solution. But focusing on airline travellers, whether with a tax or a voluntary contribution, is absolutely not the way to do it. No industry has done more for development than air transport by linking nations and facilitating tourism. Development needs commitment, not politics. And air transport needs common sense, not more taxation," said Bisignani, IATA's Director General and CEO.

A strong European air transport industry needs coherent and harmonised policies. "This tax proposal is yet another example of national European leaders sacrificing competitiveness for political agendas."

"Putting a stop to this mis-guided tax proposal is a golden opportunity for the European institutions to prove they are serious about creating a more competitive Europe," said Bisignani. "The industry urgently requires a level playing field and a harmonised operating environment. The Lisbon Agenda for competitiveness must be applied to air transport. It is time for change."

Bisignani also commented on the previous European Commission's failures, "The previous Commission did not understand air transport and the vital role it plays. As a result, ineffective policy-mis-regulation and micromanagement-is its legacy. The cost to Europe's air transport industry is US$7.6 billion (EUR 5.9 billion) each year."

May Intl Airline Passenger Traffic +8.8%, Cargo Dn - IATA
29 June 2005
Edited Press Release

LONDON (Dow Jones)--International scheduled airline passenger traffic in May 2005 was up 8.8% from a year earlier while cargo traffic showed a 1.6% decline, The International Air Transport Association said Wednesday.

The passenger load factor in the month was 71.9%.

"May cargo growth slipped into negative territory in Asia, North America, Latin America and Europe, following a sluggish performance since the beginning of 2005. As a leading economic indicator, the slowdown in cargo traffic demonstrates that the high price of oil is slowing the global economy faster than expected," said IATA Director General Giovanni Bisignani.

"Passenger traffic for May at 8.8% was much stronger. But we can expect a downward trend as the decline in economic activity works its way through the economy," he added.

IATA represents 265 airlines comprising 94% of international scheduled air traffic.

Air-Cargo Traffic World-Wide Falls As Oil Costs Rise
First Clear Drop in 2 Years May Signal Global Decline In General Business Activity
By Daniel Michaels
30 June 2005
The Asian Wall Street Journal

Air-cargo traffic, a leading indicator of general business activity, shrank in May from a year earlier after slowing over recent months. The data are a sign that high oil prices may be hampering world economic growth, according to the International Air Transport Association, which compiles the figures.

Roughly 40% of goods shipped world-wide, measured by value, move by air. This includes high-margin products such as sophisticated industrial equipment, consumer electronics and auto parts, as well as perishable items such as food and fashion.

The volume and value of air cargo rose steadily over the past few years as much of the global economy picked up and the pace of business quickened. Cargo aircraft are an increasingly important market segment for plane makers Airbus and Boeing Co., which recently announced plans for a new large cargo jetliner.

But the pace of growth in air cargo has dropped significantly since February. In May, the volume of traffic actually fell 1.6% below the level of May 2004. This was the first clear drop in more than two years. Air-cargo traffic is measured by both the weight of goods and the distance they fly.

"The obvious conclusion is that the high price of fuel is starting to affect industries beyond those that are superexposed" to petroleum prices, such as airlines, said Anthony Concil, chief spokesman for the IATA, a global airline trade group in Geneva.

Companies feeling a pinch from petroleum prices could be curtailing production, purchases and therefore shipments. Mr. Concil said that while IATA had expected high oil prices to slow economic activity, the recent slump has surprised IATA economists.

The May drop in air-cargo traffic came as the global volume of passenger traffic continued to rise, climbing 8.8% from May 2004. Airlines world-wide are reporting greater numbers of people flying, although ticket revenue isn't rising at the same pace. Sluggish revenue growth, combined with sharply higher fuel prices, is hurting the profitability of passenger airlines. IATA predicts the global industry will show a combined loss of $6 billion this year, with much of that coming from a handful of traditional airlines in the U.S.

Now, the sharp drop in cargo traffic could signal worse times ahead for passenger airlines, whose fortunes are closely correlated to broader economic growth. IATA Director General Giovanni Bisignani said in a prepared statement that airlines "can expect a downward trend as the decline in economic activity works its way through the economy."

IATA: Global air passenger traffic up 8.8 percent in first six months of 2005
28 July 2005

GENEVA (AP) - Global air passenger traffic grew by 8.8 percent in the first six months of this year, the International Air Transport Association said Thursday, adding that it hoped recent terrorist attacks in tourist destinations would not deter future travelers.

Growth was led by airlines from the Middle East, Latin America and North America, which all recorded an increase in passenger travel above 10 percent, the Geneva-based federation of air carriers said.

World passenger loads -- a measure of how full planes are -- were 74 percent in the first half of the year, a full percentage point up from last year, IATA said. In June, loads on North American passenger planes were as high as 83.9 percent.

IATA said the industry "remains vigilant at a heightened level of security" in light of the recent terrorist attacks in Britain, Turkey and Egypt.

"Passengers should be reassured that the air transport network is more secure than ever," said Chief Executive Giovanni Bisignani. Governments should do even more to better coordinate security measures, he said.

Cargo traffic, however, grew by only 3.2 percent between January and June, as high fuel prices and a slowdown in the global economy took their toll, IATA said.

Cargo traffic grew by 13.2 percent in the same six-month period last year.

International air passenger traffic up 8.5 percent in July: IATA

GENEVA, Sept 1 (AFP) - International civil aviation passenger traffic increased 8.5 percent in July compared with the same month last year, the International Air Transport Association (IATA) said Thursday.

In the year to July 31, traffic was up 8.8 percent.

Cargo traffic increased by only 2.2 percent in July from the same month of 2004 and 3.5 percent in the year to July.

IATA, which groups 265 companies repesenting 94 percent of international traffic, said passenger planes were 79.6 percent full from January to July, up from 74.8 percent in the same period last year.

"Carriers are responding to the summer travel season in the northern hemisphere with careful capacity management," said Giovanni Bisignani, IATA director geneeral.

"Globally four out of every five seats were filled in July with every region reporting load factors in excess of 70 percent."

He said strong passenger numbers and fuel surcharges were helping airlines offset the soaring price of fuel.

"The extraordinary high price of fuel means that cost reduction has gone beyond urgent.

"With oil in the 70-dollar-per-barrel range every drop of unneeded fuel burned and every cent of unnecessary expense is simply not tolerable," said Bisignani.

IATA in May forecast industry losses of six billion dollars (4.8 billion euros) based on an average oil price of 47 dollars a barrel.

Escalating fuel prices in recent weeks have brought the year-to-date average price per barrel to 53 dollars.

"Every dollar added to the price of oil adds one billion dollars to airline industry costs," Bisignani said.

Sep Intl Airline Traffic +8.2%; Growth May Slow - IATA
31 October 2005

LONDON (Dow Jones)--International airline passenger traffic rose 8.2% in September from a year earlier with cargo traffic up just 1.3%, trade group The International Air Transport Association said Monday.

The passenger data showed an improvement on the 6.1% annual growth recorded for August, but the trade group warned that passenger volumes are likely to be constrained in the future.

"The continued slowing in freight volumes indicates that high oil prices are taking a bite out of economic activity. It's only a matter of time before the trend is reflected in passenger volumes," said IATA Director General Giovanni Bisignani.

IATA, which represents 265 airlines globally, also said it's now projecting a 5.6% average annual growth rate for international passenger traffic between 2005 and 2009. A growth rate of 6.3% is forecast for international freight tonnage.

IATA member airlines are mainly full-service carriers.

Asia-Pacific Airlines Report Low Passenger Growth In Oct
25 November 2005

KUALA LUMPUR (AP)--Air travel growth in the Asia-Pacific region declined 3.6% in October from a year ago as high oil prices and a slowing global economy choked demand, an industry group said Friday.

The Kuala Lumpur-based Association of Asia Pacific Airlines said its 17 member airlines flew 10.9 million passengers in October, compared to 10.56 million in the same month a year ago.

"The burden of high oil prices is clearly having an impact, both directly in terms of higher fuel bills, and indirectly in the form of slower global economic growth," association director-general Andrew Herdman said in a statement.

For the first 10 months of the year, the number of passengers carried by the 17 airlines reached 106.52 million, up from 100.537 million in the same period a year ago.

"On the cargo side of the business, growth also remains modest, with freight traffic up just 3.2% for the year to date," Herdman said.

The association predicted that competition among airlines will remain intense next year, due to volatile oil prices and slower consumer spending, but said China's economic boom will bolster travel demand in the region.

The AAPA represents Air New Zealand (AIR.NZ), All Nippon Airways (202.TO), Asiana Airlines (020560.KQ), Cathay Pacific Airways (0293.HK), China Airlines (2610.TW), Dragonair, EVA Air (2618.TW), Garuda Indonesia, Japan Airlines (9205.TO), Korean Air (003490.SE), Malaysia Airlines (3786.KU), Philippine Airlines (PAI.YY), Qantas Airways (QAN.AU), Royal Brunei Airlines, Singapore Airlines (S55.SG), Thai Airways International (THAI.TH) and Vietnam Airlines (VAI.YY).

Last year, the number of passengers traveling on these airlines reached 117 million, rising 22.5% from 2003, signaling the industry's rebound from the 2003 SARS crisis, which caused thousands of flights to be cut as travelers avoided Asian areas hit by the outbreak.

IATA: Air Passenger Growth to Slow in 2006
By ALEXANDER G. HIGGINS
14 December 2005

GENEVA (AP) - Global growth in air passenger traffic will drag next year due to a general economic slowdown, but falling oil prices could help airlines cut their losses, the industry's trade group said Wednesday.

The airline industry, which will probably suffer net losses of $4.68 billion this year, could break even in 2006 if fuel prices drop sufficiently, the International Air Transport Association said.

"There is now a case for qualified optimism about the industry's financial performance," said IATA chief economist Brian Pearce.

IATA expects losses next year to narrow to $4.3 billion, and forecasts the industry to swing to a net profit in 2007.

But Pearce, speaking at IATA's Geneva headquarters, said the industry could break even if oil dropped as far as $50 a barrel. Crude oil prices currently hover above the $60 a barrel mark.

Growth, however, in air passenger traffic for both international and domestic flights is expected to drop from 7.1 percent this year to 4.5 percent in 2006, said IATA Chief Executive Giovanni Bisignani.

"We are already seeing slower growth for passenger traffic," Bisignani said.

Pearce said this slowdown follows the trend seen in freight traffic during 2005. Passenger traffic usually lags developments in air cargo traffic, he explained.

In July, IATA said cargo traffic grew by only 3.2 percent between January and June, as high fuel prices and a slowdown in the global economy took their toll. It grew by 13.2 percent in the same six-month period in 2004.

Air passenger traffic had faster growth, at 8.8 percent, in the first six months of 2005. The growth was led by airlines from the Middle East, Latin America and North America, which all recorded an increase in passenger travel above 10 percent.

Nevertheless, Pearce said the industry's overall performance was being weighed down heavily by performance in the United States.

"In 2005, U.S. net losses may reach $10 billion, as substantial restructuring costs and debt interests added to a deterioration in operating performance," he said.

Bisignani said prospects for 2006 could also could depend on other factors, noting that the industry had been hit by a number of crises in recent years -- including SARS, war and terror.

"Avian flu is another potential shock if we see human-to-human transmission," Bisignani said. "Based on our experience with SARS, we are coordinating with WHO."

He said the industry had put no emergency action in place, but "we are prepared to act if the situation becomes more serious." Experts fear the H5N1 strain of bird flu that has killed at least 69 people in Asia could trigger a human flu pandemic if it mutates into a form that is easily spread between people.

Air traffic tops 2 billion passengers in 2005: ICAO

MONTREAL, Dec 16 (AFP) - Global air traffic increased 5.5 percent in 2005 over the previous year, as more than two billion people took to the sky, according to the International Civil Aviation Organization (ICAO).

According to preliminary figures released Thursday, national and international passenger traffic rose 7.5 percent, with more seats offered, while freight traffic changed little in the past year, up only one percent to 38 million tonnes.

Airlines in the Middle East reported the strongest traffic growth, followed by those in Latin America and the Caribbean, and Africa.

Growth for airlines in Europe and Asia was close to the world average, while North America experienced a drop due primarily to lower freight traffic, coming in below the world average.

Correction: Switzerland-Airline-Industry
16 December 2005

GENEVA (AP) - In a Dec. 14 story about the world airline industry, The Associated Press erroneously reported the industry's probable net loss this year as a result of high fuel prices, interest payments, restructuring and other costs. The correct figure is $6 billion, not $4.68 billion, according to the International Air Transport Association.

More than 700 million passengers traveled from European airports in 2005
10 January 2006

BRUSSELS, Belgium (AP) - On an average day in 2005, more than 2 million passengers and more than 25,000 aircraft took off from European airports, the European air traffic control agency said Tuesday.

Some 2.5 million people are expected to travel each day during the summer of 2006 -- equivalent to the population of Manchester or Warsaw.

Overall, more than 700 million passengers traveled on over 9.2 million flights from European airports in 2005, EUROCONTROL said. The number of flights increased by 4.5 percent last year and is expected to grow by 3 percent this year.

Air traffic has grown by 15 percent since 1999 -- and is expected to grow by 35 percent over the next 10 years. Accidents fell by 35 percent and air traffic control delays dropped by 75 percent over the last six years.

Eastern Europe is booming, with the number of flights increasing last year by 18 percent in Croatia, 17 percent in Slovakia and 16 percent in Poland.

EUROCONTROL said air traffic management delays flights by an average of 1.9 minutes per flight.

Asia-Pacific airlines report weak growth in November's passenger figures
5 January 2006

KUALA LUMPUR, Malaysia (AP) - Air travel in the Asia-Pacific region grew by only 1.2 percent in November from a year ago, its weakest pace this year, as demand was crimped by volatile oil prices and a global economic slowdown, an industry group said Friday.

The Kuala Lumpur-based Association of Asia Pacific Airlines said its 17 member airlines flew 10.6 million passengers in November compared to 10.517 million in the same month a year ago, and was down from 10.9 million in October.

"The effects of high oil prices and slower global economic growth remain a concern," association director-general Andrew Herdman said in a statement.

For the first 11 months of the year, he said the number of passengers carried by the 17 airlines grew 5.5 percent to reach 117.128 million, up from 111.054 million in the same period a year ago.

Airfreight growth was more modest at 3.2 percent for the year to date, after freight traffic expanded four percent in November following four months of virtually flat growth, he added.

The association has predicted air travel growth in Asia-Pacific will ease next year from around 6 percent growth this year.

It said competition among airlines will remain intense next year due to volatile oil prices and slowing consumer spending but China's economic boom is likely to bolster travel demand in the region.

The AAPA represents Air New Zealand, All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, China Airlines, Dragonair, EVA Air, Garuda Indonesia, Japan Airlines, Korean Air, Malaysia Airlines, Philippine Airlines, Qantas Airways, Royal Brunei Airlines, Singapore Airlines, Thai Airways International and Vietnam Airlines.

Last year, the number of passengers traveling on these airlines reached 117 million, rising 22.5 percent from 2003, signaling the industry's rebound from the 2003 SARS crisis, which caused thousands of flights to be cut as travelers avoided Asian areas hit by the outbreak.

Econ Growth, Cost Cuts To Boost Asian Carriers 2006 Pft
By Abdul Hadhi
25 January 2006

SINGAPORE (Dow Jones)--Strong regional economic growth and lower costs will boost the profits of Asia-Pacific airlines by up to a third in 2006, analysts say, provided terrorism, a bird flu pandemic or spiraling oil prices don't plunge the industry into another crisis.

The International Air Transport Association, whose 270 member airlines carry 98% of scheduled air passengers worldwide, forecasts that the region's airlines will generate profit of US$2 billion for 2006, up from an estimated US$1.5 billion in 2005.

With Asian economies expected to grow strongly this year, analysts say the robust business environment and rising personal incomes will fuel demand for both business and tourist travel.

The Asian Development Bank has forecast the Asia ex-Japan region will grow 6.6% in 2006, led by China with growth of 9.2%. By contrast, the ADB has forecast 3.6% economic growth for the U.S.

"Most markets across the region will achieve a travel growth rate in excess of 4%-6%, with star markets such as India and China to reach 9% and 12% travel growth respectively," said Don Birch, chief executive of ticketing reservations firm Abacus International.

Among the contributing factors will be the increase in business relationships between Asia and the Middle East and interregional trade with China, he said.

Standard and Poor's aviation analyst Shukor Yusof, who is forecasting Asia-Pacific carriers will report a 20%-30% on-year rise in earnings this year, said airlines will be helped by the stabilization of jet fuel prices below the US$80 per barrel level. Further rises on the same scale as in 2005 are unlikely, he added.

The positive outlook for Asia-Pacific carriers, which have overcome the effects of the SARS epidemic and the December 2004 tsunami, is in sharp contrast to U.S. airlines, which are forecast to report a US$6.5 billion loss in 2006 as they continue to battle high fuel costs and intense competition.

Fuel costs have soared for airlines the world over from the middle of 2004, becoming carriers' biggest expenditure item and prompting them to impose fuel surcharges on tickets to offset part of the cost.

However, unlike U.S. airlines, those in Asia have managed to keep a lid on other costs.

Labor accounts for about 20% of airlines' operating costs in Asia compared with 30% in Europe and 38% in the U.S., according to IATA spokesman Albert Tjoeng.

In their latest reporting periods, labor accounted for 20% of the total costs of Singapore Airlines Ltd. (S55.SG), or SIA, and 21% at Cathay Pacific Airways Ltd. (0293.HK).

Another factor helping Asia-Pacific carriers is the relatively low penetration rate of low-cost carriers, or LCCs, in the region.

"LCCs have affected legacy carriers but not as much as in North America, given that LCCs in Asia do not compete with flag carriers that fly mostly intercontinental flights," S&P's Shukor said.

LCC penetration in Asia is only 6% in terms of passenger capacity compared with 35% in Europe and 45% in the U.S., according to IATA.

But while the market penetration rate in Asia may be low, the emerging LCCs have also made Asia's full-service airlines more cost-conscious.

"Many major flag carriers are also cutting their cost structure by outsourcing noncore information technology and accounting functions, such as SIA, and by cutting jobs such as Qantas, placing them in a better position to compete with LCCs in terms of fares," Shukor said.

Reflecting their confident outlook, a number of airlines, including Qantas Airways Ltd. (QAN.AU) and Cathay Pacific, have already ordered new planes.

However, not all regional carriers will perform as strongly as SIA, Cathay Pacific and Qantas.

Malaysian Airline System Bhd. (3786.KU) and PT Garuda Indonesia, for example, will be hard pressed to fund the purchase of new aircraft that would serve the dual purpose of meeting growing passenger traffic and make them better able to compete with LCCs by reducing fuel costs, according to Shukor.

Garuda has outstanding debt of over US$1 billion and recently received approval from European export credit agencies to delay US$515 million in payments for plane loans while MAS is selling most of its local and overseas properties in coming months to raise 1.5 billion ringgit.

Officials from MAS declined to comment while Garuda officials weren't immediately available for comment.

While most regional carriers are expected to do well in 2006, concerns about terrorism, the possible spread of bird flu and a further rise in oil prices still linger, said Peter Harbison, Executive Chairman of the Sydney-based Center for Asia-Pacific Aviation.

Bird flu has killed at least 80 people in east Asia and Turkey since 2003, according to the World Health Organization.

Experts worry the virus could mutate into a form that would be easily transmitted among people, sparking a global flu pandemic that could kill millions.

The epidemic of SARS, or severe acute respiratory syndrome, claimed 774 lives globally in 2003, and caused thousands of flight cancellations as travelers avoided Asian areas hit by the outbreak.

The severity of the travel slump led to losses even at usually highly profitable airlines such as SIA and Cathay Pacific.

Oil prices also pose a risk.

Crude oil prices declined to around US$61 per barrel at the end of 2005, off a high of US$70.85 in late August 2005. They are currently at around US$65 on fears of supply disruptions by major oil producer Iran as it clashes with the West over its nuclear program.

However, even at current levels, most Asian airlines are on track to do well.

"Jet fuel prices are still below US$80 per barrel and most of the regional airlines are well hedged this year, which will protect their earnings as they benefit from the growth in travel," S&P's Shukor said.

Asia-Pacific Airlines Report '05 Passenger Numbers Up 5%
25 January 2006

KUALA LUMPUR (AP)--Air travel in the Asia-Pacific region grew 5% in 2005 from a year ago despite skyrocketing oil prices and is likely to remain "fairly positive" this year, an industry group said Wednesday.

The Kuala Lumpur-based Association of Asia Pacific Airlines said its 17 member airlines flew a record 128 million passengers last year, compared with 121.9 million in 2004. Freight traffic expanded at a more modest rate of 3.3% in 2005, it said.

"AAPA member airlines as a group set new records for both international passengers and cargo traffic in 2005 despite the dampening effect of high oil prices," association director-general Andrew Herdman said in a statement.

"The outlook for Asia-Pacific's aviation industry in 2006 remains fairly positive, although the burden of high oil prices on the global economy remains a concern."

The 5% passenger growth was a sharp slowdown compared with a 22.5% expansion in 2004, when the industry rebounded from the 2003 SARS crisis which caused thousands of flights to be cut as travelers avoided Asian areas hit by the outbreak.

The association didn't give any growth forecast for this year. It has predicted jet fuel costs for its member airlines to balloon 50% to US$18 billion last year and likely to increase in 2006, cutting into their profit margins.

It said competition among airlines is expected to remain intense this year due to volatile oil prices and slowing consumer spending but China's economic boom is likely to bolster travel demand in the region.

The AAPA represents Air New Zealand (AIR.NZ), All Nippon Airways (9202.TO), Asiana Airlines (020560.KQ), Cathay Pacific Airways (0293.HK), China Airlines (2610.TW), Dragonair, EVA Air (2618.TW), Garuda Indonesia, Japan Airlines (9205.TO), Korean Air (003490.SE), Malaysia Airlines (3786.KU), Philippine Airlines (PAI.YY), Qantas Airways (QAN.AU), Royal Brunei Airlines, Singapore Airlines (S55.SG), Thai Airways International (THAI.TH) and Vietnam Airlines (VAI.YY).

As a group, the AAPA represents roughly one-fifth of global passenger traffic and one-third of global cargo traffic.

World 2005 air passengers up 6 pct-airports body

GENEVA, March 14 (Reuters) - Passengers passing through world and domestic airports last year totalled some 4 billion, 6 percent up on 2004, the industry body Airports Council International (ACI) said on Tuesday.

Travellers taking international flights totalled 1.6 billion, a year-on-year increase of 8 pct, while cargo moved on international routes was up 3 percent according to preliminary figures, the Geneva-based ACI reported.

In a statement, ACI Director-General Robert Aaronson said the statistics showed "that air transport is once again in a position to stimulate business development and expansion of the travel and tourism sector".

The figures showed that the world's top five busiest passenger airports, as in 2004, were Atlanta, Chicago O'Hare, London Heathrow, Tokyo's Hanada and Los Angeles, with increases ranging from 0.8 percent up to 2.7 percent.

Beijing, in 14th position, saw an increase of 17.5 percent in domestic and international passengers -- the biggest of the top 30 global airports -- for a total of nearly 41 million. This followed a 43 percent surge in 2004.

For international travellers, a category in which ACI had not previously issued established a separate listing, the top five were London Heathrow with over 61 million travellers, Paris Charles de Gaulle, Frankfurt, Amsterdam and Hong Kong.

Nearly 49 million took international flights from or to Paris. Frankfurt handled nearly 45 million, Amsterdam nearly 40 million and Hong Kong just under 40 million, according to ACI, which links airport operators and authorities in 177 countries.

The world's five busiest cargo airports in 2005 were Memphis, Hong Kong, Anchorage, Tokyo's Narita and Seoul. The biggest increase among the five in cargo throughput was returned by Hong Kong at 10.1 percent, with Anchorage on 9.7.

IATA Now Sees Global Airlines Making $2.2B Loss In 06
23 March 2006

LONDON (Dow Jones)--Global airlines are now on course to make a combined loss of $2.2 billion in 2006, followed by a profit of $7.2 billion in 2007, the International Air Transport Association, or IATA, said Thursday.

The quarterly revisions are an improvement on IATA's previous forecasts of a $4.3 billion loss in 2006 and profit of $6 billion in 2007.

IATA's Director General Giovanni Bisignani said the more positive outlook is due to better economic prospects in Europe and Asia and an improving situation in the U.S.

"While the trend is positive, we are nowhere near sustainability. A profit of $7.2 billion is only a 3% return on capital invested. Improved cost-efficiency should be at the top of the agenda for everyone in the airline industry," Bisignani said.

The revised forecasts are based on Brent crude oil prices averaging $57 a barrel in 2006 and $52 a barrel in 2007. "Oil remains the single biggest challenge for airline profitability. Strong demand gives little hope of reduced prices this year," Bisignani added.

Among the regions, North American carriers are expected to cut their losses to $5.4 billion in 2006, from $10.8 billion in 2005. Asia-Pacific carriers are expected to post profits of $2 billion this year, down from $2.9 billion in 2005 while European carriers are expected to show a 2006 profit of $1.4 billion, against $1.8 billion in 2005.

IATA represents 265 airlines globally, comprising 94% of international scheduled air traffic. These are mainly full-service carriers.

IATA Web site: http://www.iata.org

Global Airline Passenger Traffic +6.8% In Feb - IATA
3 April 2006
Edited Press Release

LONDON (Dow Jones)--Global international airline passenger traffic rose 6.8% in February from a year earlier while freight traffic rose 5.4%, the International Air Transport Association, or IATA, said Monday.

"While passenger growth was in line with projections, North American carrier growth of 3.6% is significantly below the high levels recorded in 2005 as U.S. carriers re-allocated domestic capacity to higher-yielding international markets," said Giovanni Bisignani, IATA Director General and CEO.

Passenger traffic is measured in revenue passenger kilometers or RPKs.

The Middle East remained the fastest growing region with a 15.3% rise in passenger traffic. The industry-wide passenger load factor in the month was 73.3%.

IATA represents 265 airlines globally comprising 94% of international scheduled air traffic. These are mainly full-service carriers.

Fuel costs hurt Asia-Pacific air travel
28 June 2006

KUALA LUMPUR, Malaysia (AP) - Air travel in the Asia-Pacific region slowed for the third straight month in May as airlines grappled with high fuel prices, an industry group said Wednesday.

The Kuala Lumpur-based Association of Asia Pacific Airlines said its 17 member airlines flew a total 10.5 million passengers in May, up 4 percent from 10.13 million a year ago, but down from 10.9 million in April and 11.06 million in March.

Freight traffic growth also moderated to 3.4 percent in May, compared to 5.2 percent in April, it said.

"Traffic growth moderated slightly in May but the underlying trend remains fairly stable," association director-general Andrew Herdman said in a statement. For the first five months of 2006, he said passenger traffic as well as cargo traffic expanded 5 percent from the same period last year.

He did not elaborate and could not be reached for further details.

In 2005, air travel in the region grew 5 percent with AAPA member airlines flying a record 128 million passengers, compared to 121.9 million in 2004.

But this year, the association said its member airlines are wrestling with the impact of extremely high fuel prices, which have undermined profitability.

As a group, the AAPA represents roughly one-fifth of global passenger traffic and one-third of global cargo traffic.

Global Airline Traffic to Rise Steadily in Mid-Term: UN

NEW YORK, July 4 Asia Pulse - Global airline traffic is expected to rise steadily until 2008 in line with an anticipated good performance by the world economy, according to the United Nations'(UN) aviation agency.

The UN International Civil Aviation Organization found in its medium-term forecast that airline traffic would grow 6.1 per cent in 2006, 5.8 per cent in 2007, and 5.6 per cent in 2008.

Traffic is estimated to have grown by 8.0 per cent in 2005 as a result of the continued expansion of the global economy.

"World airline scheduled passenger traffic is expected to show robust growth over the next three years following a strong rebound in 2004 and continued resilience in 2005," the UN said in a statement Tuesday.

The Middle East is expected to show the highest average annual growth rate of about 10.7 per cent between 2006 and 2008, while the Asia-Pacific region is forecast to experience fairly strong traffic growth rates, well above the world average.

As for tourism, the UN World Tourism Organization (UNWTO) noted that although the rate of growth has slowed slightly, 2006 got off to a good start with the first four months recording a 4.5 per cent growth in international arrivals worldwide.

"Although the rate of growth is slowing gradually, international tourism is firmly on track to grow at a rate above the long-term average of 4.0 per cent for the third year in a row now barring unexpected events," the UN said.

Tourism in Africa and the Middle East both registered an above average rise of 11 per cent, while Asia and the Pacific saw tourism jump 8.0 per cent. Europe and the Americas grew at a more moderate pace during the period at just under 3.0 per cent.

The agency said the first months of 2006 were also marked by the much expected recovery of destinations hit by the December 2004 Indian Ocean tsunami.

"Arrivals in the Maldives were as much as 97 per cent above the same period last year. Sri Lanka, at a 25 per cent increase, also did well, while foreign arrivals in Thailand through Bangkok airport rose by 29 per cent in the first three months of 2006."

"But Indonesia's recovery has been unfortunately compromised by the 27 May earthquake that occurred in the vicinity of its second favourite tourism destination, Yogyakarta," it said.

Asia-Pacific Passenger Traffic up 4.4 PCT in Last Fy: Iata

CANBERRA, Aug 31 Asia Pulse - Despite concerns over terrorism and bird flu, people in the Asia-Pacific region are continuing to fly, statistics show.

The International Air Transport Association (IATA), an international trade group, has released figures covering both passenger and freight air traffic for the last financial year.

IATA said passenger traffic in the Asia-Pacific region was up 4.4 per cent and freight work was up 3.5 per cent.

Despite the good news, the association's director general, Giovanni Bisignani, said continued threats to the aviation industry along with global political tensions meant there was no room for complacency in the industry.

"For the first time in two years, Middle Eastern carriers were not the leaders in cargo or passenger growth," Mr Bisignani said in a statement.

"The slowdown was isolated with little impact even to the regions dominant carriers."

Air traffic growing at smallest rate since 2003: IATA

GENEVA, Sept 29, 2006 (AFP) - August saw the smallest monthly increase in worldwide air passenger traffic since 2003, with a rise of just 4.8 percent, the International Air Transport Association (IATA) reported on Friday.

The August figures marked the fourth consecutive month of declining growth and brought the overall growth rate for this year down to 6.1 percent.

Nevertheless, the assocation's statement noted, average load factors (how full the planes are) remain close to record levels, at 79.4 percent.

IATA said August's terror alert in Britain, where the authorities claimed to have foiled a plot to blow up transatlantic flights, "had no clear impact on traffic growth". But it noted that airport security had been "much improved" whilst calling for governments to shoulder more of the burden of its cost.

Despite the falling growth rate, the IATA said it hoped its 260 member companies would "end the year better off than our current 1.7 billion dollar (1.3 billion euro) loss prediction", thanks to the record load factors plus "a declining oil price and enormous efficiency gains".

And for the first time in six years, the Geneva-based organisation is predicting a profit for next year -- of 1.9 billion dollars (1.5 billion euros).

IATA boss Giovanni Bisignani tempered the good news, however: "Nobody should be rushing to open champagne for a 450-billion-dollar industry returning 0.4 percent of revenues," he said, calling for "more change and efficiency".

U.S. airline traffic up through July
13 October 2006

WASHINGTON (AP) - U.S. airlines carried 439 million domestic and international passengers during the first seven months of the year, a 0.5 percent increase compared with last year, the U.S. Department of Transportation's Bureau of Transportation Statistics said Friday.

The bureau said U.S. airlines carried 387.5 million domestic passengers through June, a slight drop from 388.3 million in the year-ago period.

But the airlines carried 51.5 million international passengers, a 6 percent increase from 48.6 million in the same seven-month period in 2005.

In July, U.S.-based airlines carried 69.5 million passengers, down 1.6 percent from 70.6 million in the same month last year.

The number of domestic passengers in July declined to 60.8 million compared with 62.4 from the same month last year, while international passengers increased to 8.7 million from 8.2 million.

Among U.S. airlines, American Airlines carried 58.7 million passengers from January to July, the most of any airline. Rounding out the top five were Southwest Airlines Co., Delta Air Lines Inc., United Airlines and Northwest Airlines Corp.

Shares of Southwest dipped 35 cents, or about 2.1 percent, to $16.43 in afternoon trading, while American Airlines' parent AMR Corp. fell 88 cents, or 3.4 percent, to $25.01, both on the New York Stock Exchange.

United Airlines parent UAL Corp. slid 78 cents, or about 2.5 percent, to $30.64 on the Nasdaq.

IATA raises 2007 airline profit forecast

GENEVA, Dec 12 (Reuters) - Global airlines are expected to make a profit of $2.5 billion in 2007, up from the previously forecast $1.9 billion profit, despite high fuel prices, the International Air Transport Association (IATA) said on Tuesday.

The loss for 2006 was seen at $500 million, down from the $1.7 billion loss forecast earlier. Officials said the improvement reflected increasing efficiency and steady growth in passenger numbers.

"We now see the industry as doing much better despite the oil shock which pushed up its costs ... This year the airline industry has almost reached break-even at the net post-tax level," Brian Pearce, IATA chief economist, told an annual news briefing.

Excluding $6 billion in restructuring costs at Delta Air Lines Inc. <DALRQ.PK> and Northwest Airlines Corp. <NWACQ.PK>, the whole airline industry would be in profit in 2006, IATA said in a statement.

The Geneva-based association, whose member airlines make up 94 percent of international scheduled air traffic, said its higher 2007 profit forecast reflected a drop in the price of jet fuel from a peak of $93 a barrel.

Still, it cautioned there was limited scope for further significant energy price declines in 2007. "We expect fuel costs to remain at an average of 26 percent of operating costs next year," IATA said.

Airlines in North America are expected to post a $3.7 billion loss in 2006, while European- and Asian-based airlines are in profits, according to IATA, whose figures do not include domestic air traffic.

Air travel continues to accelerate: IATA

GENEVA, April 30, 2007 (AFP) - International air travel continued to accelerate in March, driving the airline industry to its first overall profit for more than six years, the top airline association said Monday.

Passenger travel rose by 7.8 percent year-on-year in March and by 7.0 percent in the first quarter of 2007 thanks to the strength of major economies, the International Air Transport Association (IATA) said in a statement.

The growth in March was the strongest monthly figure recorded over the past year, it added.

"People want to travel and they are doing it in record numbers," said IATA Director General Giovanni Bisignani.

"The fact that airlines are meeting that demand with newer, more fuel-efficient aircraft and near-record load factors bodes well for the bottom line and should lead to an industry profit of 3.8 billion dollars in 2007," he added.

However, air freight lagged well behind, growing by just 2.3 percent in March and by 2.7 percent for the first three months of the year.

"The story for passenger traffic is based on strong economies driving the demand to travel for both business and leisure markets," Bisignani said.

"For freight, competition for other modes of transport -- particularly sea -- is holding growth below our forecast of 5.5 percent for 2007," he added.

IATA, which groups more than 260 airlines, had signalled two years ago that the industry was expected to break even by 2007. But it sharply increased its average profit forecast from 2.5 billion dollars at the beginning of April.

International air transport to grow 5.1 percent a year: IATA

PARIS, Oct 24, 2007 (AFP) - International air traffic will grow 5.1 percent a year between 2007 and 2011 with domestic flights up 5.3 percent, the International Air Transport Association (IATA) forecast on Wednesday

The organisation said that by 2011 the air transport industry will handle 2.75 billion passengers, 620 million more than last year, with freight rising to 36 million tonnes, some 7.5 million tonnes more than in 2006.

"The numbers clearly show that the world wants to fly. And it also needs to fly. Air transport is critical to the fabric of the global economy, playing a critical role in wealth generation and poverty reduction," Giovanni Bisignani, IATA's Director General and chief executive said in a statement.

The greatest growth will come in the Middle East, where the market is expected to grow by 6.8 percent annually, followed by the Asia Pacific region at 5.9 percent and Africa 5.6 percent, it said.

The growth will be lowest in the United States at 4.2 percent.

It said international passenger demand is expected to rise from 760 million passengers in 2006 to 980 million in 2011, slightly lower than the 7.4 percent recorded during 2002-2006, largely due to slightly slower global economic growth.

Domestic passenger demand is expected to grow from 1.37 billion passengers in 2006 to 1.77 billion in 2011, fuelled by expansion in the Indian and Chinese home markets.

Global Airline Traffic Rose 8.2% In Sept From Yr Ago - IATA
2 November 2007

LONDON (Dow Jones)--International scheduled airline passenger traffic increased 8.2% in September compared to a year earlier, trade group The International Air Transport Association said Friday.

IATA measures traffic in revenue passenger kilometers, or RPKs, which factor in how far passengers are flown.

During the month, Latin American airlines had the strongest RPK growth, with a 24.8% jump with the average passenger load factor worldwide at 77.4%

Air freight demand, measured in freight ton kilometers, grew 5%.

IATA represents around 240 airlines worldwide.

Near misses at overcrowded airports among top aviation safety concerns
9 November 2007

BRUSSELS, Belgium (AP) - As global air traffic expands at record rates, experts warn that near misses on the ground at overcrowded airports are becoming one of the most serious safety concerns in civil aviation.

The danger arises when airports try to alleviate bottlenecks by adding runways. That leads to more taxiways intersecting the runways, raising the risk of accidental incursions -- where an aircraft or vehicle becomes a collision hazard by venturing onto a runway being used for takeoffs and landings.

"Runway incursions are right at the top of our agenda," said Gideon Ewers, spokesman for the International Federation of Airline Pilots' Associations.

"They are happening more and more frequently as air traffic increases and older airport designs struggle to cope," Ewers said.

He said that most incursions "pass without incident" but that those that don't produce "very bad" results.

The deadliest disaster in aviation history occurred 30 years ago as a result of such an encroachment -- the ground collision in 1977 between two fully loaded Boeing 747s in Spain's Canary Islands killed 583 people.

Since then, numerous such accidents have ended in tragedy, and experts are now racing to develop systems to prevent even deadlier disasters.

According to Eurocontrol, Europe's air navigation agency, an average of two incursions take place each day at Europe's 600 civil airports. And in the United States -- where reporting standards are different -- 182 incidents have been recorded so far in 2007, compared with 158 last year.

The most serious recent accident occurred on Oct. 8, 2001, when a Scandinavian Airline System MD-87 on takeoff smashed into a Cessna Citation which had encroached on the runway. A total of 118 people died.

More frequent are close calls like one in July at Ft. Lauderdale, Fla., where two jets missed each other by less than 30 feet. A United flight with 133 passengers on board missed a turn on the taxiway and entered an active runway where a Delta jet was about to land with 167 passengers.

"In an ideal world you'd have no runway crossings at all," said Paul Wilson, head of Airport Operations at Eurocontrol. "But the reality is that as an airport becomes busier, it also introduces more sophisticated guidance systems and procedures to prevent runway incursions."

A Federal Aviation Administration study found that the well-designed Washington's Dulles International Airport had only four incursions during the period from 1997 to 2000. The Los Angeles International Airport, with a complex layout of multiple intersecting runways and taxiways, had 29 incursions.

Experts say that when the volume of traffic -- projected to double over the next 10-15 years -- is taken into account, the potential for near misses and fatal accidents is growing fast.

"It is a problem that affects just about every airport," Wilson said.

The international pilots' union blames poorly designed airports as the primary cause of incursions. High traffic density, complicated operational procedures, nonstandard markings, and poor comprehension of English among cockpit crew add to the risks.

Although low proficiency in English -- the standard language of aviation -- plays a major role, foreign pilots also complain that air traffic controllers in the United States contribute to the problem by using confusing abbreviations or long and complex instructions.

As a result, the FAA now requires U.S. controllers to provide clear and explicit taxiing instructions to pilots, including the exact route to their designated runway and not merely which runway to use.

In order to minimize future risks, Eurocontrol, FAA and other national air safety agencies are looking into using advanced runway incursion alert systems that detect potential collisions on runways and give warnings to controllers and pilots.

One such system developed by the National Aerospace Laboratory in the Netherlands and used at Amsterdam's Schiphol Airport alerts controllers to potential collisions by flashing labels on their radar screens together with audio signals. All aircraft and vehicle movements are depicted in real time on an airport map, unlike conventional radar which has a lag of several seconds.

And when Schiphol added a new, sixth runway, multiple runway crossings were specifically avoided, said Bert Ruitenberg, the airport's operational safety expert. Instead, taxiways to the new runway were built around the perimeter of existing runways.

In addition, red lights embedded in the tarmac prevent planes from entering an active runway. Ruitenberg said such stop lights should become standard airport equipment.

"At some airports expansion is driven just by capacity," Ruitenberg said. "But designers will find it is better to plan with safety in mind (because) this could avoid a lot of the problems that may occur afterward."

Regional airlines fly 12.2 million passengers in October
Nov 27, 2007 (AFP)

Airlines in the Asia Pacific flew 12.2 million passengers in October, up 4.1 percent from a year ago, an industry body said Tuesday.

For the first 10 months of this year, the 17 carriers that make up the Association of Asia Pacific Airlines (AAPA) carried 120 million passengers, an increase of 4.6 percent from the same period in 2006.

In October, the airlines utilised 76.5 percent of their passenger capacity compared with 75.5 percent last year.

"Overall, the general outlook remains reasonably stable, with the global economy still maintaining steady growth," said AAPA director general Andrew Herdman.

AAPA is a trade association of international airlines based in the region, including Air New Zealand, All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, Singapore Airlines and Malaysia Airlines.

The other members are China Airlines, Dragonair, EVA Air, Garuda Indonesia, Japan Airlines, Korean Air, Philippine Airlines, Qantas Airways, Royal Brunei Airlines, Thai Airways and Vietnam Airlines.

Labor, credit woes weigh on airlines - IATA exec

WASHINGTON, Nov 28 (Reuters) - The financial turnaround at airlines, especially in the United States, would be at risk in 2008 if unions were too aggressive in trying to recoup wages and benefits lost in restructuring, the chief of the industry's leading trade group said.

"Unfortunately, as the industry shows even fragile profitability, labor starts to look for a free lunch. Already we've seen strikes from France to Japan," Giovanni Bisignani of the International Air Transport Association told an industry group on Wednesday.

"Several key U.S. contracts will be negotiated next year -- if labor pursues an agenda as an irresponsible adversary, our common future is limited," Bisignani said.

Globally, labor represents 23 percent of airline costs, down 5 percentage points from 2001 -- the start of a six-year restructuring accelerated by the Al Qaeda hijack attacks on New York and Washington.

During that period four U.S. carriers, United Airlines parent UAL Corp , US Airways Group Inc , Delta Air Lines Inc and Northwest Airlines Corp , fell into bankruptcy and AMR Corp , parent of U.S. leader American Airlines, nearly sought protection from creditors.

Bisignani also worries that U.S. carriers could have a hard time upgrading their aging fleets due to general economic uncertainty and continuing credit woes where debt remains high relative to cash flow.

"Lenders will be cautious and even if orders are placed today, production lines at Boeing and Airbus are virtually full for the next three years," Bisignani said.

About a third of the U.S. fleet is more than 25 years old, reducing the cost advantages of depreciation and heightening the impact of fuel costs since older jets are less efficient than the newest models.

IATA is poised next month to revise the industry's outlook to account for oil prices now pushing $100 per barrel. In September, the group projected 2008 profits of $7.8 billion, but the forecast was based on oil at just under $70 a barrel.

International carriers, especially in Europe, worry about U.S. credit market turmoil because of the potential impact on financing conditions and corporate travel. Premium travelers -- usually business customers -- account for 25 percent of traffic aboard the top-five European airlines on transatlantic flights, compared with 15 percent for the leading U.S. carriers, IATA figures show.

"That translates into a 30 percent yield premium for Europe," Bisignani said.

International Air Transport Association CEO says industry 'not financially healthy'
28 November 2007

WASHINGTON (AP) - The global airline industry this year will turn its first profit since 2000, but credit market turmoil and rising fuel prices mean carriers should wait before they "pop the champagne," the head of an international trade group said Wednesday.

The International Air Transport Association recently estimated a global yearend profit of $5.6 billion, which comes on the heels of $40 billion in losses in recent years. U.S. carriers are expected to lead the way with a profit of $2.7 billion this year.

"The industry is out of intensive care, but the industry is not financially healthy," IATA Chief Executive Giovanni Bisignani said during a speech sponsored by the Aero Club.

The credit crunch, while largely contained to the U.S., "throws a shadow over the industry" and rising fuel costs also will hurt profits, Bisignani said. IATA, which represents more than 240 airlines, in September forecast a $7.8 billion profit for 2008, but the group will release updated figures on Dec. 12 to account for fuel costs and surcharges.

Fuel costs accounted for the largest piece of U.S. airlines' operating expenses in the second quarter of 2007 at 25.4 percent, and are expected to represent about 28 percent of global expenses in 2007, according to domestic and international trade groups.

Oil prices have dropped in recent days but remain over $90 a barrel. Light, sweet crude for January delivery lost $3.80 to settle Wednesday at $90.62 on the New York Mercantile Exchange.

Still, the biggest risk for an industry carrying $200 billion in debts is a recession because fuel cost increases can be mitigated in a thriving economy by surcharges and increased demand, Bisignani said.

Cost-cutting measures have resulted in the return to U.S. profitability, but also diminished investments on their aging fleets. About 35 percent of the U.S. fleet is more than 25 years old and that hurts competitiveness, he said. Upgrading will not be easy as lenders will be more cautious due to credit market conditions, and production lines at Boeing Co. and Airbus are full, he added.

To improve global efficiency, Bisignani called for government regulators to collaborate and standardize everything from data collection to security procedures in much the same way safety processes have been handled. But he added that political barriers will be hard to overcome.

Bisignani also joined the chorus of domestic carriers against a recent U.S. Transportation Department proposal to reduce flights at New York's John F. Kennedy International Airport by 20 percent to help ease congestion.

He urged the agency to adopt an IATA standard administered by carriers that takes incumbents and new entries into account during the scheduling process and said the U.S. government risks retaliation and lawsuits if international carriers are somehow edged out of JFK schedules.

TABLE-International air passenger traffic up in Nov

GENEVA, Jan 4 (Reuters) - The International Air Transport Association (IATA) reported airline traffic data for November on Friday as follows:


NOV 2007 JAN-NOV 2007
Passenger traffic 9.3 7.5
Avg load factor 75.4 77.1
Freight 3.5 3.9

For a detailed breakdown by region, see the IATA website: http://www.iata.org/pressroom/facts_figures/traffic_results/2008-01-04-01.htm

Passenger traffic shows year-on-year change in percent. It is measured in revenue passenger kilometres (RPK) which multiply the number of passengers and the distance travelled.

Load factor shows the percentage of seats filled. Air freight traffic is measured in freight tonne kilometres (FTK).

IATA, whose data exclude domestic flights, represents over 240 airlines comprising 94 percent of cross-border scheduled air traffic.

Number of airline accidents rise, fatalities drop: IATA

NEW YORK, May 8, 2008 (AFP) - The rate of aviation accidents rose in 2007 from lows in the prior year but the number of fatalities declined, the International Air Transport Association said Thursday.

In its annual report on safety, the IATA said a large number of accidents in Africa pushed up the global total along with higher numbers from Indonesia and Brazil.

The report showed that the 2007 global accident rate of 0.75 losses for every million flights by Western-built jet aircraft was slightly higher than the 0.65 rate recorded in 2006.

The number of global fatalities declined 19 percent to 692, as passenger numbers increased by six percent to over 2.2 billion passengers in 2007.

In total, there were 100 accidents in 2007 -- 57 for jet aircraft and 43 for turboprop -- compared with 77 accidents in 2006.

The industry group, which represents some 240 airlines comprising 94 percent of scheduled international traffic, said the accident rate for its members was lower than the overall total at 0.68 per million flights.

"Air travel is the safest mode of transportation. In the 10 years from 1998, the accident rate was reduced by almost half," said Giovanni Bisignani, IATA's director general.

"And the number of fatalities dropped significantly in 2007. That's good news. But our goal is always to do better: zero fatalities and zero accidents."

Africa remained the most dangerous region for air transport with an accident rate of 4.09 per million, down slightly from 4.31 per million.

The North American rate of 0.09 per million and Europe rate of 0.29 accidents per million flights were the lowest.

A spate of accidents in Indonesia pushed the Asia-Pacific accident rate to 2.76 per million flights. Latin America's rate was 1.61 per million.

Bisignani said the organization was working hard in all regions, especially Africa, to improve safety: "Despite the greatest efforts we're making in Africa -- sponsoring, safety programs, training programs -- we still have an alarming rate" of accidents.

The IATA said 48 percent of the year's accidents took place during landing, mostly involving a "runway excursion," or leaving the runway.

I wonder about the accuracy of the claim that "Air travel is the safest mode of transportation". For example, on the UK National Rail Network, the number of passenger fatalities in 2006/7 was 7 out of a total of just over 1 billion passenger journeys.

But National Rail had many years of abysmal safety records. I think 1 year's worth of data is not enough to make a conclusive analysis on how safe a mode of transport is.

But National Rail had many years of abysmal safety records. I think 1 year's worth of data is not enough to make a conclusive analysis on how safe a mode of transport is.

Yes that is right, but the numbers I quote are only from the most recent annual report. I think the annual fatality rate has been below 100 for several decades. Even at its worst, I do not thing the fatality rate on the GB rail network has reached the same level as the current Air-transport rate since at least before WWII.

"Like much of America these days, the airline industry feels tired, worn down, and old" - one reporter's opinion of the US Airline industry:
http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/7389575.stm

Survey: Americans made 41 million fewer trips by airplane this year because of hassles
29 May 2008

WASHINGTON (AP) - Nearly half of American air travelers would fly more if it were easier, and more than one-fourth said they skipped at least one air trip in the past 12 months because of the hassles involved, according to an industry survey.

The Travel Industry Association, which commissioned the survey released Thursday, estimated that the 41 million forgone trips cost the travel industry $18.1 billion (euro11.64 billion) -- including $9.4 billion (euro6.04 billion) to airlines, $5.6 billion (euro3.6 billion) to hotels and $3.1 billion (euro1.99 billion) -- and it cost federal, state and local authorities $4.2 billion (euro2.7 billion) in taxes in the past 12 months.

When 28 percent of air travelers avoided an average of 1.3 trips each, that resulted in 29 million leisure trips and 12 million business trips not being taken, the researchers estimated.

The survey results did not address whether travelers chose alternate transportation to pursue any of the journeys they didn't take by plane. The association estimated overall travel industry revenue at $740 billion (euro475.85 billion).

Roger Dow, president and CEO of the Washington, D.C.-based association, said the research "should be a wake-up call to America's policy leaders that the time for meaningful air system reform is now."

"The air travel crisis has hit a tipping point -- more than 100,000 travelers each day are voting with their wallets by choosing to avoid trips," Dow said in a statement.

That's a big blow to airlines, many of which are losing money as the industry struggles with soaring fuel costs. Carriers have raised fares, added fees, cut capacity and scaled back expansion plans, and some small airlines have declared bankruptcy, while Delta Air Lines Inc. and Northwest Airlines Corp. announced plans to combine in an effort to reduce costs.

In all, 44 percent of the 1,003 air travelers surveyed by phone from May 6 to May 13 said they would take more air trips each year if airport hassles could be reduced or eliminated. The survey, conducted by Peter D. Hart Research Associates Inc. and The Winston Group, had a margin of sampling error of plus or minus 3 percentage points.

People who flew more than five times in the past 12 months were more likely to describe air travel as frustrating, at 52 percent, compared with 33 percent of infrequent travelers, defined as people who flew one or two round trips in 12 months, according to the survey.

More than half of respondents said either efficiency or reliability is getting worse, 60 percent said the system is deteriorating, and 56 percent said flying is the "bad" or "worst" part of travel -- though 62 percent said air travel security is improving.

Carriers Reap Benefits of Oil Hedging
12 June 2008
The New York Times

PARIS -- As United States airlines reel from soaring oil prices and a sinking domestic economy, most of their European rivals appear better placed to ride out the storm.

While no airline can avoid the oil price shock, analysts say, European operators are benefiting from the relatively strong euro, given that jet fuel is priced in dollars. European carriers also fly relatively newer models of Boeing and Airbus planes, which burn 30 percent less fuel than models from the 1970s and 1980s, many of which are still in use by United States airlines.

''Europeans have the benefit of fleets that are fuel-efficient,'' said Howard Wheeldon, a senior strategist at BGC Partners, a brokerage firm in London. ''Americans always wait till the last minute and come in to buy aircraft at the end of the cycle.''

The European airlines are also reaping the benefits of consolidation, and some of them serve more lucrative long-distance routes than United States carriers.

Every airline, of course, is suffering the consequences of oil prices that are above $130 a barrel. The airline industry's biggest lobbying group, the International Air Transport Association, has said that every dollar increase in the price of oil costs a cumulative $1.6 billion for airlines.

The ability to lock into fixed fuel prices months ahead of time -- called hedging -- can help offset these rising prices. But with the exception of Southwest Airlines, most United States airlines are less hedged than European ones.

Air France-KLM has hedged 78 percent of its fuel consumption through March 2009, at $70 to $80 a barrel, Jean-Cyril Spinetta, the chairman and chief executive of the airline, said last month. Through a policy of hedging fuel four years in advance, the company saved about $35 a barrel when oil was at $120 a barrel.

But that does not mean that Air France-KLM has not felt a pinch. Pierre-Henri Gourgeon, finance director of the company, said that it could not pass the full cost of fuel price increases to its customers. Instead, it is investing about $1 billion a year in new, more fuel-efficient aircraft, to which savings from fuel-price hedging contribute significantly.

Demand has slowed on its trans-Atlantic routes, Mr. Gourgeon said, though its European routes have not suffered. ''Rather than decrease capacity, we will adjust our growth plan slightly,'' he said.

Other European airlines have also taken the hedging route. British Airways hedged 72 percent of its fuel needs for the first half of the financial year and 60 percent for the second half. Lufthansa has hedged 83 percent of its fuel requirements through the end of 2008 and said that it saved 109 million euros ($169 million), last year by doing so.

Even low-cost carriers like Air Berlin, EasyJet and Ryanair are hedging, with Ryanair recently reversing a longstanding avowal never to do so.

But some European airlines are less protected. According to the French bank BNP Paribas, the Spanish carrier Iberia has ensured 47 percent of its 2008 fuel requirements, while Aer Lingus of Ireland has hedged 36 percent. The troubled Austrian Airlines has hedged only 20 percent of its 2008 fuel needs and is reportedly under pressure to find a ''strategic alliance'' with a stronger carrier, most likely Lufthansa or Air France-KLM. has hedged only 20 percent of its 2008 fuel needs and is reportedly under pressure to find a ''strategic alliance'' with a stronger carrier, most likely Lufthansa or

European airlines are also taking advantage of a wave of consolidation that is only now reaching the United States.

Air France acquired KLM, and Lufthansa purchased Swiss International Air Lines. The two acquiring airlines succeeded in increasing the number of passengers per plane -- the ''load factor'' -- on the airlines they absorbed.

Significantly, analysts say, both of those transformative deals took place after the 2001 terror attacks in the United States and amid the ensuing global downturn in air travel, while many United States airlines were forced into bankruptcy protection.

Most European carriers that were not part of the consolidation trend, like Alitalia Airlines, which is now surviving off Italian government support, are stuck in the same position as their American counterparts.

European Union rules outlawing certain types of state aid, established in 1997, prompted struggling airlines to combine or go out of business, as was the case with Sabena of Belgium in 2001. Meanwhile, the use of Chapter 11 bankruptcy protection in the United States prevented airlines from merging. Consolidation, as seen with the proposed merger of Delta Air Lines and Northwest Airlines, is only now getting under way and may be short-lived.

''The Europeans took the restructuring pain earlier and more sharply than the Americans,'' said Lloyd Brown, an airline analyst at Ernst & Young in London. ''They had more foresight and less support, so they had to make hard decisions.''

Finally, at least 50 percent of the business done by European airlines like Lufthansa and Air France-KLM consists of long-distance flights to regions like Africa and Asia, which are benefiting from a boom in commodities. Asian airlines are also doing better because demand is holding up in that region.

United States airlines have proportionally less international traffic -- roughly 20 percent of their business -- to counteract the slowing demand on national routes. Furthermore, on those shorter flights, American airlines often lack the mix of business and economy classes that enables European carriers to maximize costs by charging more at the front of the plane, said Mr. Wheeldon of BGC Partners.

Still, European airlines are striving to move quickly to limit their risks.

''We are looking at the cash contribution of every flight, on a flight-by-flight basis, not just routes,'' the British Airways chief executive, William M. Walsh, said. ''We are going to take flights out where it makes no sense, with oil at $130 a barrel, to continue them.''

Air traffic growth hits five-year low in June: IATA
4 August 2008
Agence France Presse

The number of people travelling by air grew at the lowest rate for five years in June as the global economic slowdown takes its toll on demand, the air travel industry body IATA said Monday.

Global passenger traffic grew by 3.8 percent in June, the lowest level since 2003 when the industry was hit by the SARS crisis, the International Air Transport Association said in a statement.

"With consumer and business confidence falling and sky-high oil prices, the situation will get a lot worse," warned IATA's Director General and Chief Executive Officer, Giovanni Bisignani.

Passenger load factors dropped to 77.6 percent in June, down 1.2 percentage points from the same month the previous year.

Freight traffic also fell, down 0.8 in June -- the first decline since May 2005 which the IATA attributed to several months of falling manufacturing sector confidence indicators.

Air cargo suffers first fall in 3 yrs in June-IATA

GENEVA, Aug 4 (Reuters) - International air freight traffic volume fell for the first time in more than three years in June, hit by the global economic downturn, the airline industry body IATA said on Monday.

The International Air Transport Association (IATA) said cargo traffic fell by 0.8 percent compared with June 2007 while passenger traffic grew by 3.8 percent, its lowest rate of increase since 2003 when the SARS health crisis caused many people to avoid air travel.

"With consumer and business confidence falling and sky-high oil prices, the situation will get a lot worse," IATA Director General Giovanni Bisignani said in a statement.

"The airline sector is in trouble," Bisignani added. "Falling demand and rising costs are re-shaping the industry."

Cross-border air freight is considered a leading economic indicator and a bellwether for the health of world trade, which took a knock last week when international negotiations over opening up global export markets collapsed in Geneva.

The Geneva-based IATA has frequently warned that high oil prices were hurting the airline sector, whose business remains closely aligned to economic swings. It said on Monday that the industry could record losses of $6.1 billion this year.

The June cargo decline was the first negative reading since May 2005. Latin American airlines saw the largest freight decline, with cargo falling 12.7 percent, and carriers in the Asia Pacific region had a 4.8 percent drop.

Still, freight remained in positive territory for North American airlines, which recorded a 4 percent year-on-year increase in June, and in the Middle East whose relatively small number of carriers saw freight rise 12.1 percent.

In the year-to-date, freight traffic is up 2.4 percent compared to the first six months of 2007, IATA said. Global passenger traffic has risen 5.4 percent in the period compared to the same time last year.

IATA represents about 230 airlines operating about 93 percent of international air traffic, and excludes domestic flights from its data.

Lufthansa strikes hit European traffic in July

FRANKFURT, Aug 11 (Reuters) - European and domestic passenger traffic at German airline Deutsche Lufthansa slipped 0.6 percent last month, reversing growth in previous months as strikes forced the carrier to cut flights.

But Lufthansa posted a 6.2 percent rise in overall traffic in July, helped by 17 percent growth at its Swiss unit, fully consolidated since July 2007. The load factor, or portion of capacity filled, eased 0.9 percentage points to 82.9 percent.

Lufthansa was hit by strikes by ground staff and cabin crew in the last week of July as well as walkouts by regional pilots earlier in the month in a series of disputes over pay.

"At Lufthansa the effects of the strike are particularly noticeable in the Europe traffic region," Lufthansa said in a statement on Monday.

"Although capacity still rose by 0.3 percent, this was considerably less than in prior months due to the strike. (Traffic) dropped by 3.1 percent compared with the previous year, so that the load factor was also (2.5 percentage points) lower at 73.3 percent."

The group load factor on European and domestic flights fell 2 percentage points to 74.2 percent in July.

Passenger traffic grew in all other regions, jumping 9.7 percent on routes to and from the Americas, 8 percent on Asia/Pacific services and 8.5 percent on flights to and from the Middle East and Africa, Europe's second-biggest carrier added.

Rival British Airways said on Tuesday its traffic fell by 3.5 percent in July, led by a slump in economy passengers. Larger competitor Air France KLM posted a 1.8 percent rise in July passenger traffic.

Lufthansa blamed seasonal effects and the strikes for a 7.5 percent drop in air freight and post at its Lufthansa Cargo unit to 142,000 tonnes. The number of flights fell 18 percent.

"The Americas traffic region, which is suffering from the economic downswing, was particularly affected," Lufthansa added.

Group cargo and mail, including the contribution from Swiss, fell 5.1 percent to 162,000 tonnes.

FACTBOX-Europe's biggest airlines by traffic

Sept 12 (Reuters) - Germany's Lufthansa is examining a takeover of Scandinavian carrier SAS, sources familiar with the matter told Reuters. That would create an airline almost as big as Europe's largest by traffic, Air France KLM.

Here is a list of Europe's largest airlines by traffic, measured in revenue passenger kilometers (RPKs), and by cargo, measured in scheduled freight tonnes carried, based on 2007 statistics from the International Air Transport Association and company Web sites:-

CARRIER RPKs (billions)
Air France KLM 203
Lufthansa (incl Swiss) 147
British Airways 113
Iberia 54
SAS Group 41
Virgin Atlantic 41
Alitalia 38
Turkish Airlines 29
TAP 19
Austrian Airlines 17
Finnair 16

CARRIER FREIGHT (thousand tonnes)
Air France KLM 1,445
Lufthansa (incl Swiss) 1,433
British Airways 687
Iberia 232
Alitalia 231
Virgin Atlantic 209
Turkish Airlines 174

Some airlines will not survive global financial crisis: industry group
8 October 2008
Agence France Presse

Some airlines will not survive the worsening global economic situation, an industry association said Wednesday, warning that the next 12-18 months will be "extremely difficult" for Asia-Pacific carriers.

Passenger numbers are falling as Americans and Europeans curtail travel plans and the current financial market turmoil undermines consumer confidence, the Association of Asia Pacific Airlines (AAPA) said in a statement monitored on its website.

"The biggest challenges right now are weakening passenger demand, particularly for first and business class travel, and continuing uncertainty about the global economic outlook," AAPA director-general Andrew Herdman said.

"Asian carriers are therefore bracing themselves for a period of continued turbulence, hopefully without losing sight of their long term strategic goals and future growth opportunities.

"The next 12-18 months will be extremely difficult times for airlines and some won't survive the current crisis."

He added that the association "remains extremely cautious about prospects for the airline industry in 2009."

While fuel prices have recently declined, they are still 25 percent higher than last year, Herdman said.

The crisis, which began in the US subprime, or higher-risk, mortgage sector, has been routing global financial markets and there are signs the impact is affecting other economic sectors such as manufacturing, tourism and property.

AAPA is a trade association of international airlines based in the region, including Air New Zealand, All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, Singapore Airlines and Malaysia Airlines.

The other members are China Airlines, Dragonair, EVA Air, Garuda Indonesia, Japan Airlines, Korean Air, Philippine Airlines, Qantas Airways, Royal Brunei Airlines, Thai Airways and Vietnam Airlines.

Major European airlines don't see quick turnaround as passenger numbers slump
22 October 2008

BRUSSELS, Belgium (AP) - Europe's major airlines said Wednesday that the economic slowdown cut passenger numbers in September and they do not expect a turnaround in the near future.

Alitalia, Spanair and Icelandair were worst hit as the number of people flying on member airlines dropped 1.1 percent, the Association of European Airlines said.

The group said this was the first time in 25 years that the economy caused traffic to fall and came after three months of slow growth over the summer.

With worse likely still to come as European economies slide close to recession, AEA's secretary general Ulrich Schulte-Strathaus said passenger numbers "cannot be expected to recover in the immediate future."

He blamed a "toxic combination" of a slowing economy, declining business and consumer confidence and high inflation driven by higher oil prices -- even though they have come down from recent record levels.

Flights within European countries fell sharply, down 12 percent, while lucrative trans-Atlantic flights between Europe and North America did not grow at all. Only flights from Europe to the Middle East and to the South Atlantic grew -- neither of them major markets.

The AEA said load factors -- the amount of passengers filling up airplane seats -- continued to slide and this was "a massive burden on the industry's profitability."

Italy's flagship carrier Alitalia, which went bankrupt in August, saw the worst drop in passenger numbers, down 25 percent from a year ago.

Spanish airline Spanair was down 21 percent as the bursting of a housing bubble saw the country's economy slow sharply.

Another economically troubled nation's airline, Icelandair, flew 12.8 percent fewer people as the banking crisis saw Iceland itself teeter on the brink of bankruptcy.

But Europe's biggest airlines fared better. Germany's Lufthansa -- which flew nearly 5 million people last month -- saw numbers grow 4.2 percent. Air France saw a 0.2 percent drop in traffic while British Airways saw a larger 5.1 percent decline.

The AEA represents 35 European airlines, mostly national flag carriers, that carry about 380 million people a year. It does not count passenger numbers on budget airlines such as Ryanair or chartered vacation flights.

Airlines, resorts hope to keep numbers up over holidays amid global financial crisis
24 October 2008

ATLANTA (AP) - Minneapolis business manager Roque Rossetti plans to make his annual trip home to Sao Paulo, Brazil, for Christmas. The 35-year-old said the sagging economy gave him no second thoughts about shelling out $1,200 for the ticket.

"If I wait longer, I'd probably pay more, and I might not end up going," he said. But, he added, "I'm secure. I don't have kids or a wife. My house is paid for."

Several carriers have said that advance bookings show their planes are expected to be as full as or fuller than a year ago over the late fall and winter holidays -- largely because they have taken so many seats out of the air, a decision that was made when fuel prices were soaring. In fact, travelers who have not booked flights for the holidays could find it more difficult and expensive than usual to find the flights they want, when they want them.

Because of the capacity cuts, fuller planes do not mean more people will be flying. It also may be tougher for ski resorts and sunny vacation destinations to keep their numbers up, though some are offering promotions to lure holiday travelers who may be hesitant to open their wallets amid an uncertain economy.

"I think the consumer now has a lot of things on their mind -- they're concerned about the economy, they're concerned about the election, but I think they have already made the decision about what they are going to do over Thanksgiving and Christmas," said Arne Haak, chief financial officer of discount carrier AirTran Airways.

Haak said the carrier -- a unit of Orlando, Fla.-based AirTran Holdings Inc. -- has not seen a slowdown in bookings over the holidays.

"In fact, Christmas looks very, very good," he said.

The picture is similar at Atlanta-based Delta Air Lines Inc., an executive said.

"I think it might be the newness of the information," Ed Bastian, Delta's chief financial officer, said of travelers' response to the economic crisis.

He said most consumers are still trying to figure out what the crisis means to them. Bastian said Delta's domestic advance bookings for the holidays show stronger occupancy rates on a year-over-year basis and are in line with the carrier's expectations, though he noted capacity cuts may be playing a role in that. On the international side, he said November-December occupancy rates based on advance bookings are down, though he noted Delta is increasing capacity on overseas flights.

At American Airlines, a unit of Fort Worth, Texas-based AMR Corp., its occupancy rate based on advance bookings for the fourth quarter is down about 2 percentage points year-over-year, Chief Financial Officer Tom Horton said. That's "not outside of the norm you might see varying from year to year, but remember we are taking capacity out of the system," Horton said. The fourth quarter, which includes the holidays, is traditionally a slow period for airlines.

While he would not offer specifics for the holiday season itself, Horton suggested the carrier was not expecting a big drop-off in sales during the time period.

"I don't see anything unique to the holiday period right now," Horton said.

A big change may be that, with the economy suffering, people are looking for better deals.

During a recent stop at Minneapolis-St. Paul International Airport, Georgeann Becker, 60, an attorney from a suburb of Denver, said she and her husband paid for a plane ticket for their daughter to fly home from New York to visit them this Christmas. Her daughter shopped around at the online travel sites and found a cheaper ticket than their travel agent, at around $350, which the Beckers are paying.

"I don't know that we're necessarily holding back. I think you do go out of your way to find the cheapest ticket," Georgeann Becker said.

Esmeralda Perez, a spokeswoman for the Puerto Rico Hotel & Tourism Association, said travelers appear to be waiting to book their vacations until closer to the holidays.

The island's hotels and resorts are being more aggressive with promotions and packages than in past years to lure last-minute guests, she said. The government-sponsored Puerto Rico Tourism Co. has doubled its advertising and marketing spending as well.

Perez said the election in November may also be adding to the broader economic uncertainty. In past election years, she said hotels have seen a surge of holiday bookings after the election.

Cayman Islands Tourism Minister Charles Clifford said cutbacks by carriers within the U.S. have pushed up fares to the islands. In response, Cayman Airways is adding nonstop service from Washington and Chicago to the British dependency beginning in December.

Ski.com, which books vacations at 80 resorts in the western U.S., Canada, Europe and South America, has seen sales slip compared to last year, said spokesman Dan Sherman.

As of September, Vail Resorts Inc. Chief Executive Rob Katz said the number of Colorado season passes sold was down 8.4 percent. Advance lodging bookings through central reservations were down 17.7 percent in room nights over the same period last year.

Recently, the company announced a slate of new promotions, including offering a free night to guests who book a five-night stay or more on dates around Thanksgiving, Christmas, New Year's and other major holidays in 2009.

Katz expects the company's marketing message to penetrate following the election. "I think we will potentially see a different environment by Thanksgiving than what we're seeing today."

Andy Wirth, the chief marketing officer of resort owner Intrawest ULC, said consumers seem to be favoring ski destinations within driving distance this year, although he noted that airline capacity has held steady at the three airports that service its western resorts.

He is optimistic about a major marketing push planned for shortly after the election in November. "The destination skiing customer is a very resilient customer base," he said.

Alain Brochu, a vice president of Intrawest's Mont Tremblant in Quebec, said the resort is seeing increased sales from promotions targeted to individual travelers so far this season. He said one strong seller is the $129 pass, good for 3 days of skiing.

"Preliminary results indicate that adapting to the market rather than trying to change it has generated good response," he said in an e-mail.

Airlines are not sure how long demand will hold up for them, and several expressed concern recently that demand will drop off in 2009 as the realities of a recession set in for more travelers.

AirTran's Haak said "obviously that is something we're going to keep an eye on."

Asian airlines brace for worse turbulence next year: analysts
25 October 2008
Agence France Presse

Asia's aviation sector is hurting from a sharp descent in passenger numbers but the full impact of a deepening global financial crisis is not likely to be felt until next year, analysts said.

Small carriers will be particularly vulnerable as people curtail travel plans, they added, predicting some airlines will not make it through.

"The biggest challenges right now are weakening passenger demand, particularly for first and business class travel, and continuing uncertainty about the global economic outlook," said Andrew Herdman, director-general of the Association of Asia Pacific Airlines (AAPA).

"The next 12-18 months will be extremely difficult times for airlines and some won't survive the current crisis," said Herdman, whose AAPA represents 17 airlines in the region.

Shukor Yusof, an aviation analyst with credit rating agency Standard and Poor's, said he expects some airlines to defer aircraft orders or return leased planes as they reduce routes and flight frequencies.

"The weakest ones will not be able to maintain the business," he said.

The International Air Transport Association (IATA) said passenger volumes for Asia Pacific carriers dropped 6.8 percent in September, much sharper than the average 2.9 percent decline worldwide.

Asian airlines also carried 10.6 percent less cargo in September, worse than the drop in Europe and North America, as trade volumes fell sharply, IATA said.

"The deterioration in traffic is alarmingly fast-paced and widespread," IATA director-general Giovanni Bisignani said in a statement.

"We have not seen such a decline in passenger traffic since SARS in 2003," he added, referring to the health scare that grounded travellers in Asia.

Analysts fear that unlike during the SARS period, which lasted for a few months, the current crisis will last for a year or more.

Losses for global airlines this year may exceed IATA's earlier projection of 5.2 billion US dollars, with another further 4.1 billion dollars in losses seen in 2009.

Business class travel, a major cash-spinner for airlines, has become an early casualty of the crisis, especially with retrenchments and belt-tightening in the financial sector, analysts said.

Leisure travel is also suffering as tourists stay home or travel to nearer destinations.

Singapore Airlines said it carried 1.6 percent fewer passengers in September from a year ago.

Singapore's Changi Airport said it handled 2.89 million passengers in September, down 0.4 percent from last year -- the first decrease in monthly traffic since February 2004, the airport operator said.

Hong Kong's Cathay Pacific said passenger numbers in September dropped 0.7 percent year-on-year, while Australia's Qantas said the number of international passengers it carried fell an annual 6.4 percent in August.

"People in the source countries are beginning to say: 'Well, let's rethink what we're going to do for the holidays,'" said John Koldowski, an analyst with Bangkok-based Pacific Asia Travel Association.

"It will take a little bit of time because some have already booked their tickets. But if this progresses, we're going to see a much deeper contraction for 2009."

Tourism-related industries like hotels are likely to suffer as well.

"What we're finding out is that people are shifting the way they travel. Instead of travelling business they travel economy; instead of staying at a five-star hotel, they stay at a three-star hotel," Koldowski said.

Business travellers have become more prudent with entertainment expenses as well, he said, adding: "The longer the crisis goes, the tougher it's going to be."

Some analysts said the crisis could force a consolidation of the industry, but others argue that pride could get in the way of cross-border mergers for national flag-carriers.

Earlier this month, India's largest domestic airline, Jet Airways, struck an alliance with arch-rival Kingfisher Airlines involving code-sharing, ground-handling and route rationalisation to avert collapse.

Herdman of AAPA said a key factor in surviving the current crisis is a strong balance sheet because of the tight credit situation.

"In this environment, it's almost impossible to raise equity and the cost of debt is rising," he said. "The airlines best placed to survive are those with good cash reserves."

Aviation industry is facing biggest crisis in its history amid fears of a global recession
29 October 2008

PARIS (AP) - A three-day aviation industry conference opened Wednesday in Paris with some executives warning that the battered business is not likely to see brighter fortunes until 2010 at the earliest.

The World Air Transport Forum, uniting a variety of industry players, began as airlines are battling volatile fuel prices, tighter credit conditions and diminishing passenger traffic amid the global economic slowdown.

"We are facing probably the worst crisis our industry has ever faced," said Yanik Hoyles, British Airways' general manager for Europe. Others said conditions could worsen if recessions break out in North America and Europe, as expected.

Steve Ridgway, chief executive of Virgin Atlantic, said 2009 will be the "real telling year."

"We are not anticipating any kind of pickup until the summer of 2010 but who knows? It may not even be then," he said.

The outlook has changed dramatically since last year's World Air Transport Forum, when the industry expected to make a profit of at least $5.2 billion in 2008, said Pierre Jeanniot, the conference chair.

Now the International Air Transport Association is forecasting airline losses may exceed $5.2 billion this year.

The industry "is flying through the most threatening skies it has ever encountered and the storm is not over," said Jeanniot, a former CEO of Air Canada.

Traffic declined 2.9 percent in September from a year earlier, the first time since Asia's outbreak of severe acute respiratory syndrome in 2003 that global passenger traffic has shrunk, according to IATA.

A recent easing of global oil prices has brought relief to airlines but executives expressed fears that prices could be pushed back up. Oil prices have fallen by about 57 percent since peaking near $150 a barrel in mid-July.

Jeffrey Shane, a former U.S. Transportation undersecretary, said the crisis may require regulators to rethink rules prohibiting foreign ownership of national airlines and limiting slot availability at airports.

Friday, October 31, 2008
Airlines seen facing winter survival battle

PARIS (Reuters) - European airlines face a cut-throat battle to survive the winter as recession threatens the recipe many have used to ride out a spike in oil prices -- sharing the pain with consumers by slapping on fuel surcharges.

Airline bosses at a conference ending on Friday heard warnings that the slump in confidence after the banking crisis left no choice but to cut costs, merge or go bust.

"Consolidation will be very strong in coming months either through players merging or disappearing. That's overdue," said Air France-KLM Chairman Jean-Cyril Spinetta.

Delegates at the World Air Transport Forum said the only question was whether a major flag carrier would fold. Small Danish low-cost carrier Sterling this week joined a list of more than two dozen carriers that have gone bust this year.

"Everyone is saying I will wait for my colleague to collapse first, just to give me a bit of oxygen for a few months," said Marc Rochet, head of all-business-class airline l'Avion, recently swallowed by British Airways Plc .

Still, some airlines put a brave face on the crisis with upbeat growth targets, saying the rebound may be strong if they can hold on until 2010. One expert accused them of bluffing.

"Nobody wants to be the first to give bad news. Everyone is lying to each other," Ralph Kaiser, head of corporate travel payments system UATP, told delegates.

Air traffic historically tends to grow at twice the level of gross economic product, but global international traffic fell in September for the first time in five years.

Industry icon Bob Crandall, the former American Airlines chief credited with introducing changes such as yield management, said the correlation between growth and traffic was unlikely to be re-established and the industry must brace for a long crisis.

"My prediction is the world's financial difficulties will be much worse than most of us think," he said.

DEBT CURE

Many airlines are losing money in an industry which, at the best of times, has rarely been able to generate fat margins.

"Those who come out will be those who enter the crisis with solid finances and low debt," Spinetta said.

Air France-KLM is vying with Lufthansa for a stake in rescued Alitalia, following a state spin-off of bad assets, and until recently was eyeing Austrian Airlines .

Alitalia , weeks away from running out of cash as it seeks to escape insolvency, received a lift on Friday when four unions agreed a conditional deal with local investor group CAI, assembled to rescue the Italian flag carrier. But doubts remained over whether unions would sign up.

Airlines were pummeled by record oil prices which peaked at around $150 a barrel in the summer before dropping back below $70.

Many imposed fuel surcharges, but the recent traffic drop and abrupt economic slowdown could bar their escape route.

"In July everyone said their costs were out of control. They were able to pass on fuel costs, but now it is not certain they will be able to and that is going to increase pressure," Bjorn Naf, chief executive of Bahrain's Gulf Air told the forum.

Long-term, unless oil collapses, the industry faces the challenge of persuading consumers to pay higher prices.

"We are in a hiatus and that is why there is so much drama going on in the industry," Virgin Atlantic Chief Executive Steve Ridgway told Reuters in an interview this week.

Although such price tags spell misery for Western airlines and consumers, airlines and airports from the oil-fired Gulf drew a contrast with growth in their region, saying it would be sustained by the diversification of their economies.

The head of Dubai Airports, Paul Griffiths, called the financial crisis a "blip" that will not deter the southern Gulf emirate from plans to build the world's largest airport -- covering twice the size of the territory of Hong Kong.

"People (in the global airline industry) will continue merging or go bankrupt and disappear. But Gulf carriers will keep growing and weather the storm," Gulf Air's Naf said.

Non-OPEC Bahrain, a relatively minor oil producer situated 30 minutes' drive from Saudi Arabia's wealthy Eastern Province, aims to carve a niche for its still loss-making airline with fast transit times. Three billion people can be reached in five hours' flying time from the Gulf using new planes, Naf said.

Boeing sees global air cargo traffic tripling by 2027
4 November 2008
Agence France Presse

US aerospace giant Boeing forecasted Tuesday that global air cargo traffic would grow 5.8 percent annually over the next two decades, tripling an industry that has proved resilient to economic shocks.

"Air cargo traffic will grow over the long term despite current near-term market weakness and worldwide economic uncertainty," Boeing said, noting that the industry had shown strong recoveries from previous economic downturns.

"We've seen market contraction during the middle of this year for the first time since late 2003; however, history tells us that the air cargo market returns robustly when the economy strengthens," Jim Edgar, regional director of marketing at Boeing Commercial Airplanes, said in the statement.

The US company cited the Asian economic crisis in the late 1990s, the September 11, 2001 terror attacks in the United States, and the pneumonia-like Severe Acute Respiratory Syndrome (SARS) outbreak that killed almost 800 people in 32 countries in 2002-2003.

"Air cargo remains crucial to globalization," said Edgar, who also contributed to the company's biennial forecast, released at the International Air Cargo Forum and Exhibition 2008 in Kuala Lumpur.

Boeing predicted that air cargo traffic will have tripled by 2027, underpinned by long-term economic growth, freighter fleet renewal and moderating fuel prices.

According to the Boeing estimates, the global economy will grow "just higher" than 3.0 percent on average over the next 20 years, said Randy Tinseth, vice president of marketing, Boeing Commercial Airplanes.

"Asian production fundamentals -- including abundant raw materials and low-cost labor -- remain solid, and China will remain a source of strong economic growth with substantial industrialization and related investment," Tinseth said.

The Asian air cargo market growth was expected to continue to lead all global traffic routes, with domestic Chinese and intra-Asian markets expanding by 9.9 percent and 8.1 percent per year, respectively.

Between 2007 and 2007, Boeing predicted the worldwide freighter fleet would grow to 3,890 aircraft from 1,950. The biggest cargo planes, such as the Boeing 747 and 777, would account for 35 percent of the total fleet, compared with 26 percent currently, and transport 74 percent of the world's freight.

Boeing forecast that more than 75 percent of the 3,360 freighters joining the fleet -- 2,500 airplanes -- would come from passenger-to-freighter modifications as the industry grows.

Brazil's Embraer cuts delivery forecast for 2009

SAO PAULO, Nov 8 (Reuters) - Brazilian aircraft manufacturer Embraer has reduced its delivery forecast for 2009 to 270 jets from a previous estimate of 315 to 350 planes.

Embraer also said in a statement late on Friday that it expects to invest a total of $450 million next year. In the first nine months of 2008, Embraer spent a total of $407 million in investments.

Earlier this week, Embraer said it has not received any order cancellations because of the global financial crisis, which has restricted the availability of credit and is slowing economic growth around the world.

But the company warned that the scarcity of credit would likely force some clients to request delays on delivery.

Embraer delivered 48 jets in the third quarter, compared with 47 in the year-earlier period and 52 in the second quarter of this year.

Embraer, short for Empresa Brasileira de Aeronautica, is the world's leading producer of regional jets seating up to 120 passengers. It also makes luxury business jets and military aircraft.

Airlines could cut more flights
Post-holiday travel falloff expected to be sharp
11 November 2008
USA Today

More cuts in airline schedules may await travelers after the holidays -- there are early signs that the usual after-Christmas falloff in travel could be deeper than airline managers had expected.

With conventional fare sales and an overall 10% reduction in domestic flying capacity already in place for the December holidays, U.S. airlines aren't worried that the sliding economy will produce the kind of bah-humbug Christmas season retailers fear.

But come Jan. 5, when all the family vacationers, New Year's revelers and college football fans have gone home, and corporations' austere 2009 travel budgets take effect, all bets are off.

Signs of weakening demand:

*Continental Airlines last week sharply reduced its forecast for a key benchmark of revenue growth for November. It now expects a 4% to 6% increase from a year ago in revenue per seat per mile flown instead of growth in the "low to mid-teens." Continental is the only U.S. airline that publishes such a forecast, but history has shown it to be a reliable gauge of industry trends.

*A Southwest Airlines official says Continental's outlook conforms with her airline's. Tammy Romo, Southwest's vice president of financial planning, says trends have worsened in the month since the airline announced a 5% cutback in January flying capacity -- a big reversal for an airline that's grown steadily for 34 years.

"We have seen signs of weakness in our recent booking and revenue trends," Romo says.

*American Express, one of the largest corporate travel agencies, forecast three weeks ago that 2009 coach fares typically paid by business travelers could range from down 3% to up 5%, depending on the length and severity of the U.S. economic downturn. Now it looks like the lower end of that forecast will prove most accurate because business travelers increasingly are seeking cheaper fares aimed mainly at leisure travelers, says AmEx spokeswoman Tracy Paurowski.

So how will airlines react?

In the past they turned to widespread price cutting. But this year's fare and fee hikes, along with recent drops in fuel prices, put profits in sight in 2009.

During earnings conference calls with analysts and reporters last month, executives at several airlines hinted their bias is toward further capacity cuts if demand weakens more. Officials at Delta, now the world's biggest carrier, have dropped the strongest such hints.

"Managing your capacity is critical to controlling your revenues," spokeswoman Betsy Talton says.

Thanksgiving air travel projected to fall-ATA

NEW YORK, Nov 12 (Reuters) - The number of passengers traveling with U.S. airlines over the Thanksgiving holiday period will drop about 10 percent from last year as a weak economy hits consumer spending and carriers cut back flights.

Thanksgiving remains the busiest travel time for U.S. airlines, but the 2008 season will see a decline in passengers for the first time in seven years, according to the Air Transport Association of America (ATA), the trade body for the leading U.S. airlines.

The ATA said on Wednesday the number of passengers will drop from about 26 million to roughly 24 million over the 12-day Thanksgiving travel season from Nov. 21 through Dec. 2.

Thanksgiving itself is celebrated on Nov. 27 this year.

The trade association expects the three busiest travel days will be Sunday, Nov. 30; Monday, Dec. 1, and Wednesday, Nov. 26, respectively. Planes are projected to average close to 90 percent full on these days.

ATA Chief Executive James May said the weaker economy is hurting consumer spending and airlines have cut back their schedules in response to economic pressures.

This could help ease congestion. "With fewer flights operating, that should provide some relief to the air traffic management system," said May.

"Make no mistake -- the airports will be busy and many flights will be 100 percent full," added May.

The ATA said it is hoping the U.S. Government will once again open up military airspace to help further ease congestion.

ANALYSIS-Business travel growth expected to slow in 2009

NEW YORK, Nov 13 (Reuters) - It's not quite the death of the salesman, but growth in business travel will likely slow down significantly in 2009 as cash-strapped U.S. companies cut back on unnecessary trips by executives.

The trend has worrying implications for U.S airlines, hotel and car hire companies, as well as the other industries that rely on the business traveler.

The National Business Travel Association (NBTA) remains reasonably optimistic, predicting that the number of business trips will continue to expand next year -- but at a slower pace than the annual growth from 2004 through 2007.

"This year we saw a slowdown in the growth of business travel -- in 2009. We will see a continuation of that slowdown," said NBTA CEO Kevin Maguire.

"In some companies, we are already seeing major cutbacks in travel, while other companies have higher travel budgets in place for 2009," said Maguire.

The NBTA said the tough economic conditions are forcing companies to change the way they think about business travel.

One big change is that traveling on behalf of a company will no longer be seen as a perk, Maguire said in an interview.

"Business is business -- do you send people on trips for purposes other than accomplishing business goals? Not any more," said Maguire.

"The economy is tough -- bottom lines are very, very important and the perk issue is really not a factor any more," Maguire said.

MEANER BEAN COUNTERS

The NBTA expects corporate bean counters to become even meaner in 2009.

Its research predicts company travel managers will step up cost-containment strategies by reducing nonessential travel and using data that allows them to access automated hotel information that flags out-of-policy spending.

Other companies will simply stop sending executives to meetings that involve travel costs.

"We are already starting to see companies cancel meetings and cancel participation in conferences," said Maguire. "You will see more companies go to webcasting and teleconferencing and videoconference. You can do a conference for much less than sending bodies to a meeting."

Some companies in the travel industry have already positioned themselves to limit their overall exposure to the slowing domestic economy.

U.S. airlines have increasingly been turning to international routes, which can often be more profitable. Delta Air Lines Inc is to add 15 new routes between the United States and what it called the world's fastest growing economies in Asia, Africa, Europe and the Middle East.

Starwood Hotels & Resorts Worldwide Inc , operator of the W, Sheraton, and St. Regis brands, last month reported lower quarterly profit and said it would slash costs and jobs and scale back capital spending.

However, Starwood was quick to stress that it derives about 55 percent of its management and franchise fees and 45 percent of its owned hotel earnings from outside the United States, positioning it better than some rivals.

HALF-EMPTY HOTELS

For hotel companies that do rely mostly on the United States, it could be a tough 2009.

Consulting firm PricewaterhouseCoopers expects that a key measure of the U.S. hotel industry's health, revenue per available room (RevPAR), will fall 5.8 percent next year, following this year's estimated 0.8 percent decline.

That would be the industry's first back-to-back decline in the widely watched measure since 2001-2002.

PwC said demand for hotels in 2009 is forecast to fall by 2 percent which, when coupled with an increase in supply, is expected to reduce occupancy levels to 58.6 percent, the lowest rate of occupancy since 1971.

What's more, the slowdown could put pressure on the corporate rates that hotel companies can charge for 2009.

Many corporate rates in hotels are negotiated a year in advance, so some companies may feel they are paying too much right now with prices negotiated when the economy was stronger.

That means current negotiations for 2009 corporate hotel rates have been tough, said hotel industry veteran Bjorn Hanson of New York University.

"Some (corporate) travel managers were saying, 'We paid too much in 2008, we want some of it back in 2009,' and others were saying '2008 is behind us, but we just want a very small increase for 2009.'"

Either way, it doesn't bode well.

Asian airlines suffer rapid decline in passengers, cargo: AAPA
25 November 2008
Agence France Presse

Asia-Pacific airlines are being hit with a sharp fall in passengers and cargo traffic as the global economic crisis bites, an industry group warned Tuesday.

The Association of Asia Pacific Airlines (AAPA) said passenger numbers slipped 4.1 percent in October, while air cargo demand slumped 11 percent.

"In recent months, Asia Pacific airlines have been facing a rapid decline in both passenger and cargo demand as a result of the global economic slowdown," said AAPA director-general Andrew Herdman.

The association said the average international passenger load factor for October fell 3.1 percentage points to 73.1 percent.

And despite a 7.5 percent reduction in cargo capacity, the average international cargo load factor for the month fell 2.6 percentage points to 65.4 percent.

"AAPA member airlines carried 119 million international passengers in the first 10 months of 2008, in line with last year, but passenger numbers are now falling," Herdman said.

"Airlines around the world are facing extremely difficult market conditions, with expectations of even tougher times ahead in 2009," he said.

"Asia Pacific airlines are moving quickly to adjust capacity in line with expected demand, and redoubling efforts to reduce costs throughout the business."

IATA Warns Aviation In Critical Condition
27 November 2008

LONDON (Dow Jones)--The International Air Transport Association (IATA) Thursday said international air traffic in October fell for the second consecutive month and warned the airline industry is in a dangerous condition.

International passenger traffic, or revenue passenger kilometers, declined by 1.3% compared to the same month a year ago, a smaller decline than the 2.9% drop in September.

IATA Director General Giovanni Bisignani said, "The gloom continues and the situation of the industry remains critical."

The October load factor, which measures how many of the airline's available airplane seats it filled with paying passengers, was 75%, about two percentage points lower than last year.

Whilst the drop in oil prices are a relief to airlines, Bisignani said, "recession is now the biggest threat to airline profitability. The slight slowing in the decline of passenger traffic is likely only temporary."

IATA cautioned the cargo market had not yet bottomed out. It said international air freight traffic contracted 7.9% in October, the fifth consecutive month of "increasingly severe drops."

"The deepening slump in cargo markets is a clear indication that the worst is yet to come," Bisignani added.

A sharp drop in Asia-Pacific exports impacted the regions' carriers as its international freight traffic fell 11%. The Asia-Pacific region accounts for 45% of the international cargo market.

Latin American carriers saw the largest decline of 11.4%.

But if carriers across the board were seeing a decline in passenger traffic, then European carriers were bucking the trend.They saw traffic move into positive territory with 1.8% growth in October.

Despite both the U.S. and European economies heading into recession, transatlantic traffic growth was flat for the month. But IATA said it expected further declines in international traffic for both regions' carriers.

North American carriers saw international passenger traffic decline by 0.8% in October compared to last year, slightly ahead of 0.9% drop reported in September.

Asia-Pacific carriers, which represent 31% of global international passenger traffic, saw passenger traffic fall by 6.1%, an improvement from the 6.8% decline reported in September. IATA said capacity reduction of 2.3% was not enough to keep pace with waning demand, and as a result load factors for the region's carriers fell to 72.2%.

Over the year, the weakest market for both intercontinental and regional travel was Africa. It saw the largest decline with international traffic dropping 12.9% in October. It is the only region where traffic weakened from September.

With the global economic downturn forcing the financial services industry to restructure, IATA urged a drive for efficiency.

Bisignani said, "Policy makers must also understand that change is needed in air transport. Unlike the finance industry, airlines are not asking for handouts. Commercial freedom, efficiency and a fair treatment in taxes are needed."

IATA represents some 230 airlines, comprising 93% of scheduled international air traffic.

TABLE-U.S. airlines November traffic data

CHICAGO, Dec 5 (Reuters) - The following table lists November mainline operational data for the 10 largest U.S. airlines by passenger traffic, compared with the same month a year earlier:

----Traffic---- ---Capacity--- --Load factor--
RPMs pct chg ASMs pct chg pct Change
American 9.53 -14.5 12.45 -9.3 76.6 -4.6 pts
Delta* 8.91 -4.9 11.50 -5.3 77.4 +0.3 pts
United 7.47 -17.0 9.71 -14.2 76.9 -2.7 pts
Continental 5.86 -10.7 7.53 -7.8 77.8 -2.6 pts
Northwest* 5.67 -7.4 7.08 -4.7 80.1 -2.3 pts
Southwest 5.26 -8.3 8.33 +0.4 63.2 -6.1 pts
US Airways 4.26 -6.9 5.48 -6.1 77.7 -0.7 pts
JetBlue 1.90 -7.8 2.51 -6.3 75.7 -1.3 pts
AirTran 1.33 -6.6 1.76 -7.1 75.8 +0.4 pts
Alaska** 1.40 -6.9 1.83 -6.8 76.7 0.0 pts

NOTES: Traffic is measured in billions of revenue passenger miles, the distance traveled by paying passengers.

Capacity is measured in billions of available seat miles, reflecting the number of seats available for sale and the length of the flights.

Load factor is the percentage of seats occupied by paying passengers and change is in percentage points.

*Figures for Delta and Northwest, which have merged, include data for regional affiliates.

**Alaska Airlines doesn't include unit Horizon Air.

All data are from the airlines.

Financial crisis tipped to cut cost of air travel
6 December 2008
Agence France Presse

The price of air tickets should start coming down soon because of the world financial crisis, experts are predicting, while ruling out a plunge that would endanger the health of airlines.

"If you keep prices too high you're going to lose more passengers," said Geoff van Klaveren, of Exane BNP Paribas, against a background of both companies and tourists cutting back on air travel.

Cut price airline Ryanair's boss Michael O'Leary forecast a reduction in an average ticket of between 15 and 20 percent by the end of March, and claims to be attracting passengers from more conventional companies like British Airways.

Most airlines nowadays use the yield management system, whereby prices are adjusted by computer on an almost daily basis in line with demand, starting relatively low then rising if a particular flight fills up, or falling if it does not.

"However, company profit margins are narrow, and they cannot really engage in a price war," commented Didier Brechemier, a consultant with Roland Berger.

Few airlines have yet adopted an aggressive pricing strategy, as they try to recover from the massive cost of fuel which neared 150 dollars a barrel in mid-July, forcing them to slap surcharges on tickets.

While oil has now fallen to a third of this level, companies have held back from price-cutting at the same rate, while from time to time announcing a reduction in the surcharges since September.

At the same time they have adopted other tricks to keep the money coming in, such as the introduction by the leading European airline, Air France-KLM, of a 50-euro charge on economy class seats located near the emergency exits, where passengers enjoy more legroom.

The same company is also introducing an extra class between business and economy which will come into effect towards the end of next year, and Brechemier predicted that others would follow suit.

"This project is perfectly matched to the crisis, and we are in a hurry to put it into effect," said Air France-KLM boss Pierre-Henri Gourgeon, noting that it would allow businessmen to continue travelling in reasonable comfort while saving money.

The global airline industry -- forecast to lose 4.1 billion dollars this year by industry body IATA -- is also fast consolidating in a bid to reduce costs by achieving economies of scale.

Last week, German airline Lufthansa announced a takeover offer for loss-making rival Austrian Airlines (AUA) and Irish low-cost airline Ryanair made a 748-million-euro cash offer for national rival Aer Lingus.

British Airways said Tuesday it was "exploring a potential merger" with Australian rival Qantas Airways as part of a broad tie-up.

BA is also in talks with Spanish airline Iberia and American Airlines.

Airlines head for $2.5 bln global loss in '09 -IATA

GENEVA, Dec 9 (Reuters) - Global airlines are heading for less drastic losses in 2009 than initially feared thanks to sharp falls in fuel prices but the industry remains in a "sick" state, the International Air Transport Association (IATA) said on Tuesday.

Overall revenues are expected to fall for the first time since 2002, with air cargo transport -- viewed as a barometer of the global economy -- declining more sharply than passenger traffic, the industry body said.

IATA scaled back its estimate for total losses in the sector next year to $2.5 billion from the $4.1 billion it had forecast in September, based on a reduced average oil price of $60 per barrel. It also trimmed expectations on 2008 losses to $5.0 billion from $5.2 billion.

But its 230 members, which represent 93 percent of scheduled international air traffic, still face a bumpy ride.

"The outlook is bleak. The chronic industry crisis will continue into 2009. We face the worst revenue environment in 50 years," said IATA Director General Giovanni Bisignani.

The "ferocity of the economic crisis" has overshadowed gains made from restructuring and greater fuel efficiency in recent years, he said. "The industry remains sick."

Passenger traffic is forecast to fall 3 percent next year, the first drop since 2001, while cargo is predicted to be 5 percent lower in 2009 after contracting an estimated 1.5 percent this year, according to the Geneva-based body.

Revenue is seen 6 percent lower at $501 billion, against an estimated $536 billion this year.

Air cargo traffic, which makes up 35 percent of goods traded internationally, is continuing its decline, Bisignani said.

Its 7.9 percent decline in October, the fifth consecutive month of increasingly severe drops, was a clear indication that "the worst is yet to come" for airlines and the slowing global economy, IATA said.

European member airlines are expected to post losses of $1 billion next year, ten times higher than in 2008, it said.

North America is expected to be the only region making a profit in 2009, but only some $300 million, less than 1 percent of members' revenue, it said.

"An early 10 percent domestic capacity reduction in response to the fuel crisis has given the (North American) region's carriers a head start in combating the recession-led fall in demand," IATA said in a statement.

Asia-Pacific carriers will see losses more than double to $1.1 billion in 2009 from an estimated $500 million in 2008. Airlines in the region, which accounts for 45 percent of the global cargo market, will be disproportionately hit by the decline in trade, it said.

Oil prices have tumbled from a peak above $147 a barrel in July to around $44 as the economic downturn has slashed demand.

The oil price fall is not fully reflected in the IATA figures because of hedging, according to IATA Chief Economist Brian Pearce.

Some of the benefits of lower spot prices for fuel were being delayed into 2010, as hedging means many airlines are locked into higher than spot prices, Pearce told reporters.

IATA's forecasts for 2009 were all based on an average price of $60 a barrel for oil for a total bill of $142 billion, some $32 billion lower than this year.

Asked about the impact on Boeing and Airbus sales, Pearce said: "I would think that some of these orders and deliveries are likely to be at least deferred and some cancelled."

Bisignani also forecast 300,000 to 400,000 job losses over the coming year in the aviation and travel industry, which IATA says employs some 32 million people worldwide.

International air traffic slumps in Nov: IATA
30 December 2008
Agence France Presse

Struggling airlines hit more trouble in November, with passenger numbers down and freight plunging by a "shocking" 13.5 percent, the worst drop since the September 11 terror attacks, IATA said Tuesday.

Profits at Asia-Pacific carriers, which saw the sharpest downturn in demand as the global economic crisis deepened, are expected to be "disproportionately" affected by the plunge in cargo traffic, the aviation industry group added.

"The 13.5 percent drop in international cargo is shocking ... By comparison, this is the largest drop since 2001, in the aftermath of September 11," IATA chief Giovanni Bisignani said.

International air passenger traffic in November was down 4.6 percent from a year earlier, marking the steepest fall in the past three months.

In October, passenger traffic was down 1.3 percent after a drop of 2.9 percent in September, the International Air Transport Association noted.

Asia-Pacific carriers were hurt most, with a 5.1 percent cut in capacity unable to offset a 9.7 percent decline in passenger numbers.

North American airlines saw traffic slump 4.8 percent, hit by "the near collapse of the investment banking sector and consequent reductions in business travel."

Even Middle Eastern airlines, which typically posted double-digit jumps in passenger traffic before the crisis, saw growth shrink to just 5.6 percent.

Meanwhile, international cargo traffic in November experienced its largest drop since the September 11, 2001 terrorist attacks.

"As air cargo (accounts for) 35 percent of the value of goods traded internationally, it clearly shows the rapid fall in global trade and the broadening impact of the economic slowdown," said Bisignani.

Freight traffic shrank 16.9 percent for the Asia-Pacific airlines which account for almost half of all air cargo carried.

"As freight accounts for a larger percentage of revenues for the Asia-Pacific carriers, fourth quarter profits for the region's carriers will be disproportionately impacted by the downturn in the global air freight market," IATA said.

Latin American, North American and European carriers also posted double-digit falls in freight traffic.

ABN Amro aviation analyst Sandy Morris described cargo traffic at the moment as "dismal," but he added: "I should imagine that we are probably somewhere near the bottom now."

Morris was also more upbeat about the passenger sector, saying that if domestic traffic was taken into account, then overall demand was "certainly weakening but not precipitously.

"The irony is that despite weakening demand, many airlines will be in better financial shape in 2009," he said, explaining that sharply lower fuel prices would more than compensate for fewer passengers.

Fuel prices skyrocketed as oil soared above 140 dollars in July before plummeting to around 40 dollars now as the global economic downturn saps demand.

IATA said earlier this month that it expects the industry to lose 2.5 billion dollars (1.9 billion euros) in 2009 due to the economic crisis after losses of some 5.0 billion dollars this year.

European Air Traffic To Fall 3% In 2009 - Eurocontrol
26 January 2009

PARIS (Dow Jones)--Air traffic in Europe is expected to contract by 3% in 2009 after being virtually flat in 2008, reflecting the general economic slowdown, according to a Eurocontrol press release.

With businesses and private travelers reining in their spending, especially in Western and Central Europe, airlines will be cutting back on capacity this year, after traffic - as measured by the number of flights - grew 3% annually on average over the last six years, the Brussels-based European air traffic management organization Eurocontrol said.

Last year, the number of flights in Europe rose just 0.1%, the slowest growth rate in five years. Eurocontrol said traffic fell steeply toward the end of last year, with a 7% drop in overall air traffic in December alone, and three-quarters of the European countries saw declines.

For all of 2008, Italy, the U.K. and Spain experienced traffic declines of 2.7%, 1.7% and 2.1%, respectively. Traffic continued to grow in Eastern Europe, however.

Low-cost airline traffic saw its first drop in 15 years, with 4,600 flights a day in November 2008, down 6.1% on year. Business aviation traffic in December was down 16% on year.

Airlines face tough 2009 as freight collapses-IATA

GENEVA, Jan 29 (Reuters) - International air freight traffic plunged 22.6 percent in December compared to a year earlier, an "unprecedented and shocking" free fall that signals a broader slump in world trade, industry data showed on Thursday.

The International Air Transport Association said airlines faced one of their toughest years ever, with cross-border passenger traffic dropping 4.6 percent year-on-year in December, even after a boost from advance bookings of holiday travel.

The data is also bad news for the broader global economy -- in value terms, a third of world trade is in goods sent by air.

"Keep your seatbelts fastened and prepare for a bumpy ride and a hard landing," warned IATA Director-General Giovanni Bisignani.

"The 22.6 percent drop in international cargo traffic in December puts us in uncharted territory and the bottom is nowhere in sight," Bisignani, previously chief executive of Air Italia, added.

All regions showed major declines in international freight traffic, according to IATA. Asia-Pacific carriers, who make up 45 percent of the air cargo market, were hit hardest.

"The collapse in the airline industry's freight business is a reflection of 20-30 percent declines in export and import volumes being reported across Asia, North America and Europe as the global recession plumbs new depths in December," it said.

$2.5 BILLION LOSSES LOOM

Global airlines are set to post $2.5 billion in losses in 2009 after suffering a $5 billion loss last year, according to IATA whose 230 member airlines account for 93 percent of scheduled international air traffic. Its figures do not include domestic traffic.

Its projections remain based on a fuel price of $60 per barrel, a decline of 3.0 in passenger volumes and a drop of 5.0 percent in cargo traffic.

They came a day after a gloomy outlook from the International Monetary Fund which sees the global economy at a virtual standstill, forecast to grow just 0.5 percent in 2009.

For the full year of 2008, international air cargo traffic was down 4 percent, while international passenger traffic posted modest gains of 1.6 percent, according to the Geneva-based body.

Despite year-end holiday travel, carriers struggled to keep pace with falling demand in December, when the passenger load factor fell to 73.8 percent, meaning one in four seats was empty, it said.

"Airlines are struggling to match capacity with fast-falling demand. Until this comes into balance even the sharp fall in fuel prices cannot save the industry from drowning in red ink," said Bisignani.

Business travel -- driven largely by international trade and services -- has slumped since the financial turmoil began in September. It shrank further in November with the number of passengers travelling on premium tickets dropping by 11.5 percent year-on-year, according to IATA data earlier this month.

Revenues from premium tickets are a key source of profitability for airlines.

IATA called on Thursday for major structural changes to the beleaguered industry whose revenues it said were expected to contract by $35 billion to $501 billion.

"We don't want bail-outs. But we need to change the ownership rules. Almost every other business has the freedom to access to global capital and the ability to merge across borders where it makes sense. To manage this crisis airlines need the same management tools," Bisignani said.

Asian airlines trim down for expected hard landing
1 February 2009
Agence France Presse

Asian airlines are cutting routes and taking other measures to avoid flying half-empty planes during a travel slump caused by the global economic crisis, analysts and industry players say.

With most projections saying the world economy will worsen before it starts to recover, airline job cuts could come next, analysts said.

Carriers are also expected to seek alliances and other forms of cooperation to ride out the turbulence whipped up by a global financial storm that originated in the United States, the world's biggest economy, they added.

"It's going to get worse before it gets better... and airlines are making preparations to try to ride this out," Standard and Poor's aviation analyst Shukor Yusof told AFP.

Singapore Airlines (SIA), one of Asia's major carriers, has announced the suspension of some international flights affecting routes to India, Southeast Asia, the United States and Europe.

In a sign that even elite passengers are feeling the pinch, SIA's non-stop, all-business class service to New York and Los Angeles will be trimmed to 10 flights a week from 14.

"We don't want to be flying half-empty planes around the world any longer than we have to, because it increases our cost burden at a time when we can least afford that," said SIA spokesman Stephen Forshaw.

Japanese carriers Japan Airlines (JAL) and All Nippon Airways said they were slimming down by suspending or reducing flights and switching to smaller planes.

JAL, Asia's biggest airline, said it was decreasing flights from Tokyo to New York, Bangkok and Seoul beginning in late March. It will suspend services from the western city of Osaka to London.

JAL also plans to reduce the number of seats on other routes such as Tokyo to Sydney, Chicago and Los Angeles by introducing smaller aircraft.

All Nippon Airways, the country's second biggest carrier, said it would stop using jumbo 747s on flights from Tokyo to Paris and Frankfurt later this year. It would also introduce smaller planes between Tokyo and Washington.

"2009 is shaping up to be one of the toughest years for international aviation," International Air Transport Association (IATA) chief Giovanni Bisignani said in his latest assessment.

"Keep your seatbelts fastened and prepare for a bumpy ride and a hard landing."

The Asia-Pacific region was the industry's booming market in recent years but international passenger traffic carried by the region's airlines fell 9.7 percent in December over the previous year, the sharpest decline in any region, IATA said.

Only carriers in Latin America and the Middle East saw an increase.

Asia-Pacific airlines, which account for 45 percent of global cargo, also registered the steepest fall in freight traffic, a 26 percent decline last month, said IATA, the industry's trade organisation.

This is worse than the 22.6 percent fall in cargo traffic worldwide, the IATA figures showed.

"I'm expecting the inevitable -- which is job cuts. It's looking more and more likely because of the degradation in the traffic numbers both for passengers and cargo," Yusof, of Standard and Poor's, said.

He said airlines would eventually have to deal with a surplus of wide-bodied aircraft made idle from a lack of passengers.

SIA has the option of selling, leasing or parking surplus planes, its spokesman said.

But SIA says it will push through with all its current orders, including 13 Airbus A380 superjumbos -- the world's largest passenger plane -- 18 A330s and 20 Boeing B787-9s, so that it can retire older aircraft.

In Australia, national airline Qantas grounded 10 aircraft and cancelled plans to lease two new planes in November. It halted all planned domestic growth for both Qantas and budget offshoot Jetstar.

Hong Kong carrier Cathay Pacific is also under severe pressure after passenger numbers dropped 0.3 percent year-on-year in December despite an aggressive marketing campaign, following a 2.2 percent drop in November.

Cathay Pacific's revenue manager Tom Owen said the airline had been forced to cut ticket prices to keep December figures respectable.

Cathay's cargo business has been hit even harder, dropping 23.9 percent year-on-year in December. The firm has delayed a new cargo terminal at Hong Kong International Airport by two years.

Taiwan's two major carriers, China Airlines and EVA Airways, said recently introduced direct air links to mainland China had cushioned the impact of the economic slump.

"The 22 weekly flights to major mainland cities are very profitable," China Airlines senior vice president Roger Han said.

For those less fortunate, one option is consolidation, the Centre for Asia Pacific Aviation consultancy said in an analysis.

It predicted that full-service airlines and some low-cost carriers "will attempt to forge new relationships this year", ranging from operational mergers to full equity transactions.

But it warned that most such attempts are likely to fail because the industry is heavily regulated.

there was a thread about monthy passenger traffic of airports. Does anyone know where I can find it?

^^ A European one is here (http://www.skyscrapercity.com/showthread.php?t=727520).

If that's not the one, and the last post in the thread was more than a month ago, it may have been sent to the archives.

Business-class air travel drops in December - IATA

GENEVA, Feb 18 (Reuters) - Airlines sold far fewer business and first class seats in December, though economy travel in the Christmas period was buoyed somewhat by tickets bought before economic gloom set in, a global industry body said on Wednesday.

The International Air Transport Association said "premium" traffic was 13.3 percent lower in December than the same month in 2007, following the 11.5 year-on-year drop seen in November.

"This precipitous fall has been driven by the abrupt decline in business activity and international trade around the world," IATA said in its latest Premium Traffic Monitor.

Asia had the largest drop, with Far East flights filling 25.1 percent fewer top-tier seats compared to the year before, said the Geneva-based IATA, which represents 230 airlines including British Airways, Cathay Pacific and United Airlines.

Singapore Airlines, the biggest airline by market value, said on Monday it was cutting capacity by 11 percent in the year from April due to waning travel and cargo demand.

Overall, December premium traffic fell 8.8 percent in the North Atlantic region, 16.3 percent in Europe and 4.2 percent in the Middle East, according to IATA's data that excludes domestic flights.

Africa was an exception with 11.8 percent year-on-year premium traffic growth in December.

In economy class, the picture was less bleak. Some 5.3 percent fewer people took cross-border flights in December compared to the year before.

"Leisure trips at this time of the year may well have been pre-booked before the full extent of the recession was apparent, so an accelerated fall in economy travel numbers should be expected in January," IATA said.

"With jobs being lost at an increasing rate during January and consumer confidence falling further it seems that the bottom has not been reached for air travel and even weaker numbers may become evidence in the first few months of this year."

For 2008 as a whole, IATA said premium travel fell 2.8 percent while economy travel rose 0.9 percent.

Because economy tickets represent more than 90 percent of all tickets sold, overall passenger numbers on international markets flown by IATA airlines grew 0.5 percent last year.

Although sliding oil and jet fuel prices have given airlines some respite, IATA said weakening passenger and cargo demand has created new problems, causing both fares and yields to drop.

Premium tickets normally make up about 8 percent of total passenger numbers but 15 to 20 percent of revenues. IATA said airlines saw a 20 percent drop in premium revenues in December, which if sustained could cut 3 percent or $15 billion from the airline industry's annual revenues.

Slump in air travel, cargo, accelerates: IATA
26 February 2009
Agence France Presse

International air travel traffic slumped even further in January plunging the airline industry deeper into crisis, the industry association IATA reported Thursday.

Passenger demand fell by 5.6 percent in January compared to the same month last year, a full percentage point worse than the decline recorded in December 2008, the International Air Transport Association (IATA) noted.

The steep fall in air cargo also accelerated, demand dropping by an unprecedented 23.2 percent year-on-year in January, compared to a drop of 22.6 percent a month earlier.

"Alarm bells are ringing everywhere," IATA chief executive Giovanni Bisignani said in a statement.

"The industry is in a crisis and we have not yet seen the bottom."

"Every region's carriers are reporting big drops in cargo. And, aside from the Middle Eastern carriers, passenger demand is falling in all regions," Bisignani added.

Some of the decline was offset by cuts in flights, but the 2.0 percent cut in global airline capacity failed to keep up with the decline in air travel.

The biggest regional fall in passenger travel and air cargo again occurred in Asia, previously the industry's biggest source of growth in recent years.

Passenger traffic dropped 8.4 percent in January despite the traditional boost for the Chinese New Year, while air cargo in the region, the biggest global air freight market, fell 28.1 percent.

IATA said the prospects for passenger traffic in Asia this year "remain dismal."

North American carriers suffered a decline of 6.2 percent in passenger travel, largely due to the fall in demand on trans-Pacific routes, while freight fell 19.3 percent.

In Europe passenger demand fell by 5.7 percent last month, more than double the decline seen a month earlier, and freight fell 23 percent.

The Middle East was the only region to experience growing air travel, of 3.1 percent, but it was far below the double digit growth recorded by airlines based in the region last year.

Bisignani repeated criticism of additional flight taxes in Europe, especially while tax breaks were being lined up in other sectors to stimulate economic growth.

"Don't tax us to death in order to pay for investments in the banking industry," said the IATA's chief.

"This includes the UK government's plans to increase multi billion pound Air Passenger Duty and the Dutch government's misguided departure tax," he added.

IATA maintained a forecast of a 2.5-billion-dollar (1.9-billion-euro) loss for the industry in 2009.

The crisis is set to wipe 35 billion dollars off revenues, leaving airlines with a total of 500 billion by the end of the year, according to the association.

IATA groups 230 carriers covering more than 90 percent of scheduled international air traffic, with the exception of exclusively low-cost airlines such as Ryanair and EasyJet.

Asian air cargo slumps 23.6 pct in January
26 February 2009
Agence France Presse

Air cargo demand in Asia slumped 23.6 percent in January while passenger numbers dropped 7.8 percent, the Association of Asia Pacific Airlines said Friday.

"The collapse in world trade is having a severe impact on airfreight demand, forcing airlines to temporarily ground a number of dedicated freighter aircraft," association director general Andrew Herdman said in a statement.

"Passenger travel demand is also weak, with premium traffic particularly hard hit as businesses seek to cut costs in response to the global economic downturn."

The association said that the number of international passengers carried by its member airlines dropped 7.8 percent to 11.4 million in January 2009 compared to a year ago.

Average passenger load was down nearly five percentage points to 73.9 percent.

In the cargo sector, there was a 23.6 percent decline in international freight tonne kilometres in January compared to the same period a year ago, it said.

Airline '09 losses to pass previous estimates-IATA

KUALA LUMPUR, March 19 (Reuters) - The losses of world airlines in 2009 are likely to exceed the $2.5 billion forecast previously, as the global economic crisis eats up passenger and cargo traffic, an industry body said on Thursday.

"Our last industry forecast made in December was for a $2.5 billion loss in 2009 based on a 3 percent fall in passenger demand and a 5 percent demand in cargo," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).

"This is now looking very optimistic and next week we will issue a revised forecast," he told reporters.

IATA, which represents 230 airlines including British Airways, Cathay Pacific and United Airlines, said earlier this month world airlines lost up to $8 billion last year, far more than the $5 billion previously estimated.

In January, international passenger demand fell 5.6 percent year-on-year, following a 4.6 percent decline in December, according to IATA. February numbers are to be released next week.

Cargo volumes in January fell 23.2 percent year-on-year after December's 22.6 percent decline, the eighth consecutive month of contraction for freight traffic.

Bisignani said while economy travel demand has also slumped in response to the global financial crisis, a much faster decline in the premium segment, which airlines depend on for their bottom line, was hurting more.

"Business classes are empty. The airlines make money in the front and recover the cost on economy, and when the business class disappears, it's a big problem," he said.

Airlines around the world have been battered severely by the global financial crisis and have unveiled a slew of cost-cutting measures to stay afloat. Asian carriers have been worst hit.

Singapore Airlines, the world's biggest airline by market value, last week asked staff to take unpaid leave for up to two years in a bid to reduce costs.

The Singapore carrier, which last month announced plans to cut its capacity by 11 percent and has grounded 17 of its 100-plus aircraft, had already asked pilots at its cargo arm to volunteer for unpaid leave.

Cathay Pacific, the dominant airline of Hong Kong and Asia's fifth-largest carrier by market value, which reported a record $1 billion second-half loss recently, said last week it could sell some assets to raise cash.

Bisignani said he expected more capacity cuts by airlines across the world to adjust to slowing demand.

"You see further capacity cuts practically every week in different parts of the world. We have to try to adjust capacity to demand," he said.

Airlines face losses of 4.7 billion dollars in 2009: IATA
24 March 2009
Agence France Presse

Airline industry association IATA on Tuesday sharply increased its loss forecast for carriers to 4.7 billion dollars in 2009, which is set to be "one of the toughest years" that the sector has faced.

The new forecast, equivalent to 3.4 billion euros, by the International Air Transport Association marked a sharp rise from the 2.5 billion dollars in losses for 2009 that it predicted in December.

The industry group also raised its estimate of total airline losses for 2008 from 8.0 billion dollars to 8.5 billion dollars, blaming a "very sharp fall in premium travel and cargo travel."

"2009 is shaping up to be one of the toughest years that the airline industry has ever faced," said Giovanni Bisignani, IATA's director general, who also described the year as "grim."

While the forecast losses for 2009 were barely a fraction of the 13 billion dollars the industry lost in 2001 following the September 11 attacks in New York, Bisignani pointed to rapidly deteriorating revenues to stress the severity of the current crisis.

In December, the industry association forecast revenues would fall 35 billion dollars or 6.5 percent for 2009, but on Tuesday, it raised the loss to 62 billion dollars or 12 percent.

Bisignani called it a "shocking difference."

The industry is particularly hurt by the fall in premium traffic, or first class and business class seats, where airlines typically make their money.

Although the airline industry's prospects may improve towards the end of the year, "expecting a significant recovery in 2010 would require more optimism than realism," Bisignani insisted.

"Given the scale of this crisis and the impact on premium traffic and revenues, even with the best of optimism, I do not expect a significant recovery in 2010. This impact of this crisis will be with us for some time," he warned.

The only bright spot is falling fuel prices, noted Bisignani. Oil prices have plunged from a peak of over 140 dollars a barrel last July to around 50 dollars now.

However, some airlines anticipated that prices would continue soaring and therefore hedged or took out forward contracts based on the higher prices last year.

They are now paying elevated prices despite the fall, IATA explained.

Overall demand is projected to continue to slide this year, with passenger traffic shrinking by 5.7 percent over the year.

Asian-Pacific carriers are expected to be the worst hit, with the biggest losses to be posted by these airlines amounting to 1.7 billion dollars this year as demand tumbles 6.8 percent.

European carriers are forecast to post 1.0 billion dollars in losses while Middle East carriers are seen losing 900 million dollars.

Only North American carriers would post a profit of 100 million dollars, as they benefited from having trimmed capacity earlier and lower fuel prices, according to IATA.

Air travel slump accelerates in February: IATA
26 March 2009
Agence France Presse

The sharp decline in air travel accelerated in February as global passenger volumes nosedived 10.1 percent below levels recorded a year earlier, the airline industry association IATA said Thursday.

The double-digit fall in passenger demand was almost twice that of the 5.6 percent decline recorded for January, the latest data from the International Air Transport Association showed.

Airlines were unable to cut their capacity fast enough to keep up with the slump.

"The 5.9 percent reduction in capacity -- the most aggressive since the crisis began -- could not keep pace with the fall in demand," IATA said in a statement.

Freight traffic fell by 22.1 percent in February, in line with falls in December and January.

"Freight traffic, which began its decline in June 2008 before passenger markets were hit, has now had three consecutive months in the minus 22 to minus 23 percent range," IATA added.

Giovanni Bisignani, IATA's director general, said: "We may have found a bottom to the freight decline, but the magnitude of the drop means that it will take time to recover."

But even as freight traffic stabilises, airlines are now feeling the squeeze in passenger traffic.

Airlines in the Asia-Pacific region posted the sharpest fall in demand, 12.8 percent, as export-dependent economies cut back on business and leisure travel, particular those to long-haul destinations.

Capacity cuts of 7.8 percent were unable to make up for the drop in demand in the region, said IATA.

North American carriers posted a 12.0 percent drop, while European carriers saw traffic plunge 10.1 percent.

Latin American airlines lost 3.8 percent in passnger traffic, but that was closely compensated by cuts in capacity of 2.4 percent.

Only Middle Eastern carriers bucked the trend with a rise of 0.4 percent in international traffic.

IATA on Tuesday sharply increased its loss forecast for airlines to 4.7 billion dollars in 2009, saying it was set to be "one of the toughest years" that the sector has faced.

Europe's airports report big drop in traffic

GENEVA, April 8 (Reuters) - Europe's airport network rang alarm bells on Wednesday over the effect of the global recession on their business, reporting steep declines in passengers and cargo traffic since the start of the year.

The industry's regional body ACI-Europe said travellers passing through the continent's domestic and international terminals in January and February were down 12.2 per cent compared with the same period in 2008, and freight dropped by 23.7 per cent.

The figures were in line with similar falls in passengers and freight reported by international airlines and industry analysts said they showed how another, more community-based, branch of the global travel industry was suffering.

"The double whammy of falling aviation and commercial revenues is hitting Europe's airports more and more severely with each passing month," said ACI-Europe's Director General Olivier Jankovec.

"On top of that, the capital intensive nature of airports means that we are also being squeezed by the ongoing paralysis of capital markets," he declared in a statement issued from the body's Brussels headquarters.

ACI-Europe links 440 airports in 45 countries, from giants handling more than 50 million passengers a year to tiny businesses such as Mostar in Bosnia which processes only 9,000.

Among major ACI-Europe members are Britain's Heathrow, operated by BAA [FERBA.UL] a subsidiary of Grupo Ferrovial , Germany's Frankfurt, owned by Fraport , France's Charles de Gaulle, part of Aeroports de Paris and Russia's Moscow-Domodedovo, while its smallest members include Linz in Austria, Knock in Ireland, and Berne in Switzerland.

Airports around the world are closely tied to local economies, generating thousands of jobs and commercial activities in catchment areas, so a serious decline in their business can have a wide knock-on effect.

The growth in the past decade of smaller airports handling much of the booming budget airline and internal air travel sector in Europe and North America is credited with bringing prosperity to once less-favoured regions.

The Geneva-based Airports Council International (ACI) says that worldwide, domestic travellers passing through its members' facilities in February were down 10 per cent and international passengers down 11 per cent compared with the same month in 2008.

ACI, the industry's global body, says travellers taking international flights from airports throughout the world were down 11.3 per cent in February while domestic travellers declined by 9.4 per cent against February 2008.

International freight moved from world airports was down 23.5 per cent and domestic freight dropped by 12.4 per cent, according to ACI's latest figures. (Editing by Jonathan Lynn)

Air trade slump highlights task facing G20

PARIS, April 7 (Reuters) - Airlines are unveiling more evidence of the uphill task facing world leaders as they seek to kickstart moribund trade, with freight traffic plunging again in March and empty business seats adding to growing losses.

U.S. majors which have reported passenger traffic declines of up to 13 percent were joined on Tuesday by rivals including Air France-KLM. Europe's largest airline said it had carried 9.4 percent fewer passengers and 19.2 percent less cargo in March.

Annual comparisons are less dramatic when adjusted for the fact that the Easter holiday, traditionally a busy travel period in Christian countries, falls in April not March this year.

Yet airline traffic figures are in the spotlight because they provide crucial economic signals for March, for which official data is not yet available, just as the world's economic powers try to breathe some life into flatlining global trade.

G20 leaders agreed last week on a $1.1 trillion package to boost the economy including a $250 billion infusion of funds to unfreeze international trade, about half of which goes by air.

Shares in Air France-KLM on Tuesday fell up to 4 percent.

It was the fourth month in a row that the world's largest carrier of international freight, with operations balanced across the globe, has seen cargo bookings drop about 20 percent.

"It just goes to show foreign trade is going really poorly at the moment. We are expecting very weak (February) data for French exports and imports tomorrow," said Alexander Law, economist at French research consultancy Xerfi.

Air France-KLM also revealed a "significant deterioration" in passenger unit revenues in March, days after it abandoned hopes of making money in the just-ended fiscal year.

In Scandinavia, SAS said March passenger traffic fell 16.7 percent and Finnair said it was slashing ticket prices to try to fill its seats..

The Finnish carrier's March cargo traffic fell 17.5 percent.

Shares in SAS fell 7.3 percent and Finnair fell almost 6 percent. British Airways, which last week warned on profits as March traffic fell 7 percent, lost 2.7 percent.

GLOBAL SUPPLY CHAIN

Tuesday's stream of data arrived after U.S.-based Delta Air Lines, the world's largest carrier after taking over Northwest, said overnight its passenger traffic fell 13 percent and cargo activity dropped by a whopping 35.5 percent in March.

Delta and Northwest together make up the third biggest domestic airline freight network, according to latest IATA data for 2007.

Out of sight from ordinary passengers, the amount of cargo in the belly of a passenger jet or on special transporters provides precious clues to the flow of unfinished goods in the economic pipeline -- a possible indicator for future activity.

Supply chains in the globalised economy mean exporters increasingly rely on imports of components or semi-finished goods, often from dozens of other countries.

In Europe, factories have resorted to selling from stored inventory, rather than producing more goods from imported parts -- for which trade financing is in any case hard to find.

While cargo volumes have plummeted since December as a result, economists say supply chains are so tight that activity could leap upwards again as soon as the economy begins to stir.

Whether that will signal a true recovery is less certain.

"On inventories, you're probably going to have a technical recovery at one stage; you do hit rock bottom and you can't get any lower," economist Law said.

"But it doesn't mean there will be a pickup in demand. It just means you've emptied out your warehouses and you've got to have a vital minimum to sell."

Data also coincided with signs that tourism is suffering after holding up relatively well compared with business traffic.

France said tourism, which accounts for 6 percent of its economy, fell 3 percent last year and will fall again this year.

France kept its spot as the world's top tourist destination with 80 million visits last year but there were fewer from Britain, Germany, the United States and Japan.

Germany's Air Berlin, which provides both charter flights and city links for businesses, said on Tuesday its March traffic fell 5.6 percent, sending its shares 7 percent lower.

Mideast airlines March passenger demand rises - IATA

DUBAI, April 28 (Reuters) - The Middle East was the only region where airlines saw any growth in passenger demand in March, the International Air Transport Association (IATA) said on Tuesday.

The 4.7 percent rise in international passenger demand, up from a 0.4 percent rise the previous month, "represented an expansion of market share" of Middle East carriers, IATA said.

Airlines in the region also increased capacity by 13.1 percent, it said, creating an imbalance in the market.

Earlier this year, IATA said that after several years of rapid growth, Middle Eastern airlines were likely to double their losses to $200 million in 2009 as they felt the pinch of the global financial crisis.

But many of the region's carriers have been reporting steady growth. Last month, Abu Dhabi-based Etihad Airways said it expected revenue to grow 24 percent to $3.1 billion this year as it takes delivery of 11 aircraft and boosts passenger numbers by adding at least six new routes.

Carriers elsewhere around the world saw passenger demand fall sharply in March. North American carriers posted a 13.4 percent decline in passenger demand, while European airlines suffered a 11.6 percent drop, IATA said.

In Africa, passenger demand slipped 15.6 percent, and Latin American carriers saw a 5.9 percent fall.

Airlines post traffic rises but gloom remains

LONDON, May 6 (Reuters) - British Airways, Ryanair, and easyJet all posted passenger growth for April, but warned that Easter had provided a short term boost and the industry remained in the quagmire.

BA flew 0.9 percent more passengers in April than the same month last year despite a 17.7 percent slump in business travel, but admitted it was selling tickets at lower prices to fill its planes.

The company said its load factor -- a measure of how well it fills its planes -- rose 2.6 percent to 78.1 percent.

"We're sacrificing yield (prices) in order to keep volume," BA head of investor relations George Stinnes told reporters, adding that the airline had launched a 2-for-1 offer on business class tickets.

Low-cost carrier easyJet said earlier on Wednesday that April traffic rose 6.3 percent. Easter fell in March last year, inflating the April year-on-year figures.

It said bookings for the summer were about the same as last year, encouraging analysts, but remained cautious on the economy. A spokesman for founder and biggest shareholder Stelios Haji-Ioannou said he still takes the view that easyJet ordered too many planes for current market conditions and should continue to postpone deliveries.

Ryanair posted a 12 percent jump in April passengers while its load factor increased to 82 percent

"The low cost airlines continue to produce materially better numbers than full carriers. They are holding up while business-to-business traffic like premium or cargo travel is down," said Stephen Furlong, airlines analyst at Davy stockbrokers in Dublin.

British Airways shares were up 5.5 percent higher at 175 pence by 1507 GMT, while easyJet was off 4 percent and Ryanair was up 4.4 percent.

BA remains in merger talks with Spanish partner Iberia

Air cargo slump near bottom, no sign of upturn-IATA

ZURICH, May 27 (Reuters) - The slump in demand for air freight may have hit bottom, data from an airline industry body showed on Wednesday, but it warned there were no signs that a recovery was around the corner.

Air cargo demand tumbled 21.7 percent in April, the fifth consecutive month of a drop of more than 20 percent, but the pace of decline held steady, indicating that the worst of the downturn could be in the past, the International Air Transport Association (IATA) said.

"Freight remains at shockingly low levels. The worst may be over. However, we have not yet seen any signs that recovery is imminent," IATA Director General and Chief Executive Giovanni Bisignani said in a statement.

Demand for air cargo, a key barometer for the health of global trade, has dwindled as retailers have stopped ordering new stock due to the slump in consumer spending, while manufacturers have also curbed their production of new goods.

Air freight volumes are likely "to bounce along the bottom" until inventories adjust to more normal levels, IATA said.

Earlier this month, Bisignani told Reuters it would be necessary to wait another three or four months before it would be possible to tell if the situation was improving.

IATA, which represents 230 airlines including British Airways, Cathay Pacific and United Airlines, and Emirates, said international air passengers numbers fell 3.1 percent year-on-year in April.

IATA said earlier this month that passenger travel was likely to fall further and the number of people flying business and first class had fallen sharply in March, depressing fares and hitting airlines' revenues.

Privately-owned airline Virgin Atlantic warned on Tuesday the tough economic environment would make it "almost impossible" for airlines to make a profit in the current year.

The group also reiterated recent comments from rival British Airways that a slump in passenger numbers worldwide showed no signs of abating, making the current climate the toughest the industry has faced.

IATA has forecast that carriers are set to lose $4.7 billion this year as a result of the global recession that has shrunk passenger and cargo demand, after losses of around $8.5 billion last year.

INTERVIEW-IATA to raise 2009 airline industry loss forecast

KUALA LUMPUR, June 4 (Reuters) - Losses from the world's airlines will be worse than forecast this year and will cause a knock-on effect on suppliers, with Boeing and Airbus orders next year looking to be down 30 percent, the industry's top body said on Thursday.

International Air Transport Association (IATA) Managing Director Giovanni Bisignani told Reuters in an interview that the body would revise its forecast of $4.7 billion of losses at its annual meeting on Monday.

"We are going to revise them for the worse because the numbers we have seen in passengers and in freight are not showing any improvement," Bisignani said, adding that it would take 3-4 years before revenues recovered to pre-crisis levels.

The industry lost $8 billion in 2008.

"Freight has probably touched the bottom, it is minus 21 percent (year-on-year) since the last two or three months... but we do not see any kind of improvement. But the passenger (sector) where we generate 90 percent of our revenues is still roughly 10 percent down," he said.

Airlines carry 38 percent of the world's freight traffic and demand has been hit hard by the downturn that is expected to see global output fall by 1.3 percent, according to the International Monetary Fund.

While there has been a recovery in stock markets and in the oil price, this has not been matched by the prospects of a return to growth in the global economy, Bisignani said.

"We don't see any real recovery of the real economy... the goods traded around the world are still 21 percent lower," he said.

The price of oil recently hit a seven-month high of $69.05 and IATA's forecast of losses this year is based on oil at $50 a barrel. Oil at $50 a barrel would cost the airline industry $100-$120 billion this year, less than last year's $180 billion, IATA forecasts.

ORDERS TO DRY UP

According to Reuters estimates, some $500 billion of airline orders have been placed for this year. Difficulties in getting banks to finance purchases could see the number of planes delivered by Boeing Co and its European rival Airbus Industrie drop by 30 percent next year, Bisignani said.

"On the demand side (for planes), we have seen numbers dropping, in order to recover the same level of revenues we would take between 3 and 4 years, so probably there will be a shift in the need for capacity," he said.

The current downturn has hit carriers across the globe from wounded national giants like Deutsche Lufthansa and British Airways.

Even nimble budget airlines such as Ryanair which this week posted its first loss in 20 years thanks to a writedown on an investment in Aer Lingus, have cut fares in order to try to grow passenger numbers at the expense of national carriers.

Bisginani called for an end to sweetheart deals for some low-cost carriers which see them paying lower fees for airports, but rejected calls for a bailout of the airline industry.

"When an industry is losing billions and billions of dollars, we are not asking for bailouts, we are just asking, give us the opportunity to run this as a normal business and see if we are able to start making some money."

He said that a wave of industry consolidation would be unleashed if the U.S. ended ownership caps by foreigners on its airlines and said he believed the industry could create value for stockholders.

"The value chain shows that everybody makes money except the airlines. Manufacturers make money, make money in spare parts especially, airports make money because they run a monopoly service," Bisiginani said.

Airline group IATA says weak economy, Easter shift, sent April premium traffic down
16 June 2009

MINNEAPOLIS (AP) - More evidence emerged Tuesday that a bad economy pushes passengers to the back of the plane, as a trade group reported that traffic in the high-end airline seats fell 22 percent in April.

Revenue from those passengers fell even faster, down an estimated 44 percent from April 2008, the International Air Transport Association reported.

The number of travelers on coach tickets rose 0.3 percent in April, which IATA said was an improvement over a 6.9 percent decline for the first quarter.

IATA pointed out that Easter landed in April this year versus March last year. The shift probably cut into higher-priced business travel but boosted leisure travel, IATA said. The group estimated that the Easter shift accounted for 5 percentage points of the decline in April premium travel.

Drivers of air travel such as jobs growth and industrial production were still declining in most big economies during April, "which would suggest a floor for air travel has not yet been reached," the group wrote.

Air travel has become much cheaper in recent months, with economy fares down 15 percent and premium fares down more than 20 percent, IATA said. That's because airlines are discounting tickets to try to keep them from going unsold.

Premium traffic in Europe fell 33.6 percent versus April 2008. Premium traffic within North America was down 16.5 percent, and traffic from Europe to Asia fell 26.4 percent.

Air cargo drops in May, recovery still far off-IATA

GENEVA, June 25 (Reuters) - Demand for cross-border air freight dropped 17.4 percent year-on-year in May, suggesting international trade is still a long way from recovery, a global airlines body said on Thursday.

The International Air Transport Association (IATA) said that passenger demand fell a more modest 9.3 percent year-on-year in May, and repeated its view that for airlines, "this crisis is the worst we have ever seen".

"We have lost several years of growth and yields are under severe pressure. Airlines are in survival mode. Cutting costs and conserving cash are the priorities," Giovanni Bisignani, IATA's director-general, said in a statement.

The latest reading of international air traffic includes the first estimate of the impact of H1N1 flu on airline travel.

Mexican carriers saw their passenger traffic fall nearly 40 percent in May, compared to a 9.2 percent drop among all Latin American airlines, said IATA, which represents 230 carriers including United Airlines , Cathay Pacific , Emirates [EMIRA.UL] and British Airways .

U.S. airlines also reported weak demand to Latin American destinations affected by the newly-discovered virus which has now spread to a global pandemic, the figures show.

Air cargo is a leading indicator for world trade, and equity markets are watching it closely for signs of economic recovery.

IATA said the 17.4 percent drop is a relative improvement compared to the 21.7 percent year-on-year fall in April, but remains far from full health.

It said although manufacturers have begun to add to their product inventories in anticipation of an eventual economic rebound, "inventories remain 10 to 15 percent higher than normal in relation to sales levels, indicating that a significant recovery is not expected in the near term".

Passenger traffic demand is slightly stronger than the 11 percent drop seen in March, indicating "a floor may have been reached," but it also has a long way to go, said IATA, which has estimated airlines will lose $9 billion in 2009.

IATA: May Air Passenger Demand Down 9.3% On Yr
25 June 2009

LONDON (Dow Jones)--The decline in global passenger demand in air travel appeared to have reached a floor in May, the International Air Transport Association, or IATA, said Thursday, but warned airlines still face a long haul to recovery.

IATA said passenger demand fell 9.3% in May from a year earlier. Freight demand dropped 17.4%, an improvement from the 21.7% drop in April.

The 5.0% cut in capacity wasn't enough to keep pace with falling demand and passenger load factors fell to 71.2%, down from 74.5% recorded in May 2008, IATA said.

IATA said figures suggested a floor had been reached and added: 'Although the impact of the recession appears to be stabilizing, strong headwinds from debt and low asset prices are expected to weaken and delay any significant recovery.'

'We may have hit bottom, but we are a long way from recovery,' said Giovanni Bisignani, IATA's Director General and chief executive.

Bisignani said airlines had lost several years of growth, with yields under severe pressure.

'Airlines are in survival mode. Cutting costs and conserving cash are the priorities,' said Bisignani.

He criticized airport operators and air navigation service providers for $1.5 billion in cost increases seen so far this year.

'It's irresponsible in the best of times and a completely unacceptable abuse of monopoly position in a crisis,' said Bisignani.

Small EU airlines say demand dropped 10 pct in first 3 months of 2009
26 June 2009

BRUSSELS (AP) - Europe's small airlines said Friday that passenger numbers dropped 10.7 percent in the first three months of the year as the economy downturn hit business and tourist travel.

The European Regions Airline Association said half of its member carriers -- which do not operate long flights across Europe or outside the continent -- saw fewer people fly, even airlines flying to Alpine ski slopes during high season.

Air Alps Aviation, which flys from Italy to Austrian resorts, posted a 44 percent drop in demand while Tyrolean Airways was down 11 percent.

Smaller airlines have boomed in recent years as the emergence of many low-cost carriers led to more people switching from road and rail to air travel.

Major European airlines reported a 9.5 percent drop in passenger numbers from January to March. Globally, airlines expect to lose $9 billion this year.

IATA: 60 Airlines Post 1Q Net Losses Totalling $3B
30 June 2009

LONDON (Dow Jones)--The International Air Transport Association, or IATA, Tuesday said that over 60 airline companies have already reported a net loss over $3 billion during the first quarter, adding that airlines are on course for a $9 billion loss for the year.

Those losses are mainly due to falling yields - average revenue per passenger - and total revenue, and were recorded before the recent rise in fuel prices.

Equity markets became more cautious on the airline sector during June, with the Bloomberg Global Airlines index falling 2% from May levels, which compared to a 0.9% rise in the FTSE Global All-Cap, IATA said.

IATA, which represents 230 airlines globally, said: "Market concerns are rising about the squeeze on airline cash flows being brought about by the substantial rise in jet fuel prices and the equally sharp fall in yields."

Tuesday, the front-month August light, sweet, crude contract on the New York Mercantile Exchange was at an eight month high at $73.38 a barrel.

Airlines continue to cut capacity, with available seat kilometers down 5% in May and available freight ton kilometers down almost 10%, but still can't keep pace with the falloff in demand.

Capacity cuts so far this year have been roughly half of the decline in volumes flown, IATA said, forcing both fares and yields to fall sharply in the last couple of months alone.

European Airline Passenger Traffic Dn 8.3% In May
10 July 2009

LONDON (Dow Jones)--The Association of European Airlines, or AEA, said Friday passenger traffic in May was down 8.3% and in the first half of June decreases were around 7.5% with falls of 5.5% in the second half.

MAIN FACTS:

-May Far Eastern traffic down 9.8%, North Atlantic 8.8%, and traffic in Europe down 7.9%.

-Overall seat-km in May 5.3% lower than previous year.

-May load factor down 2.4 points to 73.2%

-All but three of the 28 reporting airlines reduced capacity for May.

-Towards the end of June there were signs that load factors on European and North Atlantic routes had stabilised, although the Far East market remains very weak.

European airlines see no signs of recovery

PARIS/FRANKFURT, July 9 (Reuters) - Figures from Lufthansa , one of the world's biggest carriers of air freight, a key barometer of world trade, showed the airline slump continuing, while Air France-KLM braced for temporary lay-offs.

Continental Europe's largest airlines -- Lufthansa by market value and Air France-KLM by revenues -- were unable to point to significant signs of recovery in separate announcements on Thursday, though Frankfurt airport operator Fraport sounded a rare but still fragile note of optimism.

Germany's Lufthansa said shipments of cargo and mail fell 14.3 percent in June after 10 percent in May as a slump in economic activity continued to weigh.

"In the air freight sector ... the market environment remained weak in June," the German flag carrier said.

Passenger traffic retreated 5.2 percent in June, it said, though this was better than the 7 percent some analysts had feared, and an improvement on May's fall of 7.1 percent.

Cargo flows are under the spotlight as economists look for clues on physical trade movements. They have been hit both by economic weakness and a crisis over trade financing that G20 countries have promised to address by pumping in cash.

Just under half of international trade by value is shipped by air, according to airline lobbyists, and Lufthansa is the world's second-largest cargo network after Korean Air . When Air France and KLM, which merged in 2004 but still operate separately, are combined, they outrank Lufthansa.

FRAPORT MORE OPTIMISTIC

Fraport said it had become slightly more optimistic about 2009 after a slump in passenger traffic had eased in June.

It will release the figures on Friday.

In the United States, airlines saw steep declines in traffic in June, a sign that demand remains weak and that carriers are likely to post second-quarter losses.

Germany has been the world's biggest exporter of goods since 2003 but has been hit by a slump in exports this year.

In mixed economic data on Thursday, Germany said it might have already emerged from recession, but U.S. unemployment data failed to cheer markets.

TEMPORARY LAY-OFFS

Air France-KLM Chief Executive Pierre-Henri Gourgeon told a shareholders' meeting the Franco-Dutch group may impose temporary lay-offs to cope with recession as it saw no signs yet of a recovery in travel demand.

"Air France-KLM must remain competitive. I haven't excluded temporary lay-offs. We will watch very closely. These measures should allow us to avoid affecting employment," he said.

In May Air France-KLM said it planned 3,000 job cuts in the financial year to end-March 2010 through natural wastage.

The world's airlines lost more than $3 billion in the first quarter of 2009, airline lobby IATA said last week, maintaining its estimate for full-year losses of $9 billion.

Airlines say there is little way of knowing how business trends will develop in the second half of the year and are conserving cash or merging to survive, while a rebound in oil prices looks set to delay profits when the recovery happens.

At $61.7 per barrel on Thursday, North Sea Brent crude futures <LCOc1> have risen 56 percent since mid-February, but they are still less than half their peak of $146/bbl a year ago.

Merger talk was rekindled on Thursday when the chairman of Spanish airline Iberia stepped down and was replaced by proven dealmaker Antonio Vazquez.

Vazquez, who oversaw the sale of Altadis to Britain's Imperial Tobacco in 2007, could put new life into merger talks with British Airways , which have been bogged down for a year, analysts said. [ID:nL9627060]

Vienna airport operator Flughafen Wien said passenger traffic fell by 10.5 percent in June as traffic to eastern Europe declined by almost 20 percent.

The June decline was less severe than in the first five months of the year. Year-to-date traffic declined 12.7 percent.

Running on empty
4 July 2009
The Economist

ON JULY 1st Lufthansa finally took control of BMI, the second-biggest carrier at Heathrow airport. But the only person celebrating was Sir Michael Bishop. A fortnight earlier the 67-year-old entrepreneur had forced the German airline to honour a decade-old put option to add his 50% stake to the 30% it already held, albeit at a lower price: £223m ($368m) rather than £292m.

That the deal had to be imposed on Lufthansa, almost literally on the steps of the High Court in London, was a sign of the times. Until quite recently, the chance to acquire BMI’s 11% share of take-off and landing slots at Heathrow would have been enviable. In 2007 American airlines, eager to take advantage of new “open skies” rules, were paying up to £25m for each pairing of slots. But these days, faced with one of the most savage downturns in the history of a notoriously cyclical industry, Lufthansa is desperately trying to conserve cash and cut capacity to match plunging demand.

The airline recently warned that without fierce cost-cutting measures it would fail to make even an operating profit this year. In the first four months of 2009 its premium traffic fell by 15%, while traffic within Europe dropped by 37%. Blair Pomeroy, of Oliver Wyman, a consultancy, points out that the last thing Lufthansa needs just now is to spend precious money and management time trying to sort out a struggling, sub-scale airline such as BMI.

It shows just how bad things are if even Lufthansa, one of the world’s most powerful airlines, cannot see how to make money by bulking up at Heathrow, one of the most coveted bits of real estate in aviation. According to IATA, the trade body that represents most of the world’s airlines, the industry is on course to lose $9 billion this year. Although passenger volumes appear to have bottomed out and freight recently recorded a small increase, IATA’s boss, Giovanni Bisignani, fears that the worst is yet to come and that once the summer holidays are over the crisis will intensify.

The problem, according to Brian Pearce, IATA’s chief economist, is that “fares and yields are still collapsing” in most of the world because capacity cuts have yet to catch up with the fall in demand. Deliveries to airlines that ordered new planes near the top of the cycle are running at a rate of about 100 a month and will continue at that pace well into next year because the penalties for late cancellation are so high. It is also hard for airlines to mothball planes they are still paying for. American majors were able to slash capacity much faster than their European and Asian counterparts because many of their elderly planes were fully depreciated. In just a few months last year, United Airlines grounded nearly 100 of its elderly Boeing 737s.

Another anxiety is the price of jet fuel, which has risen by nearly 50% since the beginning of the year and by over 30% since early May. Mr Pearce says that his forecast assumes oil at $65 for the rest of the year—five dollars below the level it reached this week. Each extra dollar adds $1.6 billion to the airlines’ costs.

If cash continues to evaporate at its present rate, even the strongest airlines will need to raise money. But the price they will pay for it could cripple them for years. Even airlines with healthy balance sheets, such as American and Southwest, are having to pay 10-11% on secured debt. United offered a yield of 17% on $175m worth of debt issued last week.

Sir Richard Branson, the founder of Virgin Atlantic, has mischievously suggested that his old rival BA could go bust. Aviation analysts think that unlikely. But its chief executive, Willie Walsh, admits it is facing a “fight for survival”. In the last financial year, BA recorded its worst-ever loss: £401m, £331m of which was chalked up in the first three months of 2009. The airline was getting through £2.7m a day in February and had cash reserves of less than £1.4 billion at the end of March.

Usually, about 65% of BA’s profits come from its routes across the North Atlantic, most of it from passengers paying a £4,000 business-class fare to New York. So far this year, BA’s premium traffic is down by about 17%—hardly surprising when much of it used to come from deal-chasing bankers. Mr Walsh is right to be fearful, particularly if unions balk at his plans to cut 3,500 jobs and opt to launch a summer of strikes.

IATA’s Mr Pearce sees some signs of recovery in Asia. But he expects only a long, hard grind for airlines in Europe and America. European regional airlines, squeezed on one side by low-cost rivals like easyJet and Ryanair and on the other by the big network operators, such as Air France-KLM and Lufthansa, are especially vulnerable. Although overstretched by the acquisition of BMI and two smaller airlines, Lufthansa is strong enough to weather the storm better than most. But not as well as Sir Michael, who realised some time ago that the best way of making money from the airline industry was to leave it.

Air groups: May freight down 20 pct, outlook grim

BRUSSELS, July 10 (Reuters) - European airlines witnessed another bad month of freight volumes in May with few signs of an upturn, two aviation groups said on Friday.

"May was another catastrophic month for air freight, which posted a 19.8 percent decrease" year-on-year, said the Association of European Airlines, which represents 33 carriers including Air France-KLM and British Airways.

"Several AEA airlines have seen their cargo volumes cut by one third or more," it added.

The group said passenger numbers fell 8.3 percent in May compared with a year earlier, with preliminary figures for June indicating a slight improvement.

"There is no relief in sight, however, in the air freight market," it added.

Airports body ACI Europe said freight dropped 20.1 percent year-on-year in May at the 105 airports it surveyed, a slight improvement on April's 25.4 percent fall.

The group gave no figures for June, but its director-general Olivier Jankovec last month told Reuters he forecast 2009 freight would be down 16 percent on last year.

Gloomy airlines see upturn at year end: IATA
16 July 2009
Agence France Presse

Airlines have reverted to pessimism about business prospects and do not expect any improvement in international air travel until the end of 2009, IATA said on Thursday.

The global recession has been cited as the main reason for deteriorating demand, but the impact of the swine flu pandemic is also being highlighted by airlines responding to the International Air Transport Association's survey.

"The glimmer of optimism about financial performance for the coming 12 months seen in April's survey has faded as respondents, on balance, indicate further declines in profitability ahead," said IATA.

"Even the optimistic respondents don't see significant recovery before Q4 this year and others not until early 2011," it added.

The airline industry has been battered by the global recession. As businesses attempt to reduce costs, cut backs have been made in particular yo business travel.

IATA noted that premium traffic -- business class or first class travel where carriers typically make their money -- fell more in May than in prior months this year.

"Passenger travel numbers in May cast doubt on the view that a bottom to the travel decline has been reached," it said.

In May, premium traffic passengers fell 23.6 percent, compared to a fall of 22 percent in April, and a drop of 19.2 percent in the first quarter.

IATA noted that economy travel appears to be growing for Europe-Middle East and Middle East-Asian routes, but this could also reflect a shift of business travellers from premium to economy class.

The impact of swine flu also began to be felt in May.

IATA had earlier said that the H1N1 virus depressed air travel by about one percent globally in May.

The slump was particularly marked in travel within central America which indicated a 62.4-percent fall in May. Traffic between central and south America also plunged 46.7 percent during the month.

European and American airlines were more downbeat than carriers in Asia, which expect "stabilisation of profitability."

Meanwhile, IATA also warned of what it described as "de-globalisation" amid the crisis, as economic stimulus packages unveiled by governments focus spending on boosting domestic economies.

The association feared that these measures are being implemented at the expense of world trade and capital links, and could further hurt international travel.

"The deterioration in international air travel in, to and from Asia during May, despite recovering economies in the region, is a worrying sign of what is being called 'deglobalisation'," said IATA.

Overall international air passenger traffic fell 9.3 percent in May following a year-on-year decline of 3.1 percent in April, a month traditionally buoyed by holiday travel over the Easter period.

IATA added last month that airlines are expected to lose nine billion dollars this year, the worst slump the industry has ever faced.

Combined with the revised estimate that it lost 10.4 billion dollars in 2008, the industry now looks set to lose almost 20 billion dollars over two years.

Does anyone know where I might be able to find passengers numbers for city pairs? For example, if I wanted to find out how many people fly between Los Angeles and Frankfurt where could I find this out? Also, I am curious if there are stats on the size of markets to a particular area. For example, how many passengers a year is Los Angeles - Europe. In other words, how many people fly between LA and Europe in 2008. Thanks.

Does anyone know where I might be able to find passengers numbers for city pairs? For example, if I wanted to find out how many people fly between Los Angeles and Frankfurt where could I find this out? Also, I am curious if there are stats on the size of markets to a particular area. For example, how many passengers a year is Los Angeles - Europe. In other words, how many people fly between LA and Europe in 2008. Thanks.

These are usually very hard to come by. Airlines rarely post specific route figures. These seem to be very proprietary numbers.

@massp88: In 2008 there were 237694 passengers flying FRA->LAX (960 take offs including the 2 weekly cargo flights) and 242508 flying LAX->FRA.
From the whole of Germany there were 363070 passengers on 1405 flights flying to LAX (passenger load factor 84,8%).
Between LHR and LAX (both directions) there were 131601 passengers in June 2009.

The numbers for Germany can be found at the Federal statistical office of Germany (https://www-ec.destatis.de/csp/shop/sfg/bpm.html.cms.cBroker.cls?CSPCHD=00700001000049tm9hLM000000REfOZITOUpCrnH8S4ctteA--&cmspath=struktur,sfgsuchergebnis.csp).
(Click "Details" at "Luftverkehr auf allen Flugplätzen - Fachserie 8 Reihe 6.2 - 2008" (should be the first entry), choose whether you want the data as pdf-document or xls-table, click on "weiter" and the download will start; the numbers for intercontinental flights can be found in chapter 4.2.2, 5.2 and 8.2)

Mamas don't let your babies grow up to be airline bosses
19 July 2009
The Toronto Star

The first decade of this new century is one that airlines will be eager to forget.

It has been marked by the 9/11 terrorist attacks, the SARS outbreak, skyrocketing fuel costs, the bankruptcy of five major North American airlines and the outright disappearance of the likes of Swissair, Canada 3000 and Jetsgo.

Yet it seems those setbacks weren't punishment enough for an industry hard-pressed to turn consistent profits even in the best of times.

Which these obviously aren't.

Last week, the International Air Transport Association (IATA), trade group for the world's major carriers, reversed an earlier prediction that the latest plunge in demand had bottomed out. Reacting to a further 9.2 per cent drop in May traffic, IATA now forecasts total industry losses of $9 billion (U.S.) this year on a likely 15 per cent decline in revenues.

To which Willie Walsh, CEO of British Airways PLC, shakes his head and says, "Too optimistic." BA, which posted a record loss of $615 million (U.S.) last year, is so determined to cut 4,000 positions from its workforce that it's prepared to take its first strike in a dozen years.

BA's survival is at stake, claims Walsh. For Calin Rovinescu, CEO of Air Canada since the ouster of his predecessor in April, at stake is averting a second trip through bankruptcy court this decade. Like its peers among large, so-called "legacy" carriers, Air Canada has cut capacity by abandoning routes and reducing frequency of flights.

But Air Canada, which lost more than $1 billion (Canadian) last year, finds that it cannot reduce capacity fast enough to keep pace with sharp declines in traffic. In the past year, Air Canada has cut capacity by 7.6 per cent. But in that time, passenger volume fell 9.1 per cent. Archrival WestJet Airlines Ltd. trimmed its available seats 2.5 per cent during that period. But demand has fallen 7.1 per cent.

The worst global recession since the Great Depression and the accompanying credit crisis have severely reduced volume in all price categories.

Penny-pinching corporate clients have been grounding their employees, using teleconferencing wherever possible. The leisure market has also taken a hit as blue- and white-collar unemployment soars across North America and Europe.

Even workers who remain employed are sufficiently fearful of job loss they're opting for "staycations" rather than flying to Disney World or Vegas.

Fuel costs have dropped this year, of course, but they remain far above 2006-07 levels. Even swine flu and a recent string of airline tragedies have given travellers more reason not to fly. (So far this year, there have been about 630 plane-crash fatalities, more than in all of 2008, though well short of the 1972 record of 2,374.)

BA chair Martin Broughton, who calls the past 12 months an "annus horribilis" for BA and other global carriers, says his industry is "crying out for consolidation."

And it's true that despite all the capacity reductions, there still are too many planes chasing too few passengers.

BA is doing its part with drawn-out negotiations to merge with Spanish flag carrier Iberia Lineas Aereas de Espana SA, and BA hopes later this year to add American Airlines in an alliance among the three carriers.

Deutsche Lufthansa AG, having absorbed the short-lived successor to the failed Swissair, is close to a deal to buy Austrian Airlines.

Air France-KLM Group continues its long flirtation with a chronically profit-challenged Alitalia SpA. Yet even after last year's combination of Delta Air Lines Inc. and Northwest Airlines Inc., the U.S. market remains over-served by six national carriers, along with scores of regional players and upstart discounters such as JetBlue Airways Corp. and AirTran Holdings Inc.

With its heavy debt load and fractious labour relations, United Airlines Inc. seems the likeliest candidate to sacrifice its independence.

Yet even if the industry's consolidation wishes are fulfilled, commercial aviation will still suffer the curse that economists refer to as "low barriers to entry."

Starting an airline is notoriously easy: You just rent or lease one of the hundreds of aircraft mothballed in the Mojave and you're in business.

No sooner do failed carriers such as Jetsgo make their last trip to the hangar than appear the likes of privately held Porter Airlines, based at Toronto's Island airport. Porter goes head to head with Air Canada on the busy Toronto-New York run. (Porter flies to Newark, N.J., one of the Big Apple's three major airports.) Just three years after its launch, Porter counts eight destinations, with a business plan calling for an eventual 17 ports of call.

And U.S. upstart JetAmerica, with a leased Boeing 737, will next month begin offering $9 (U.S.) flights from its Toledo base to Newark, and will also commence service to the sub-metropoli of Melbourne, Fla., Lansing, Mich., and South Bend, Ind. The Jet

America plan is to profit from a raft of "convenience fees" for checked baggage, ordering tickets by phone ($20 U.S.) or Internet ($10 U.S.) and round-trip assigned seats ($20 U.S.).

Upstarts are the curse of the industry, driving down fares enough on cash-cow routes to impoverish larger carriers that rightly fear losing market share if they don't match the lowest fare on offer. Trouble is, these legacy carriers are operators of high-cost networks, vying for passengers with low-cost startups.

It's not as though the established players can be credited with unerring discipline.

Calgary-based WestJet last week unveiled expansion plans for 11 new destinations in the U.S. and Caribbean for next winter. Air Canada, which Bay Street expects will lose money this year and next, making for three consecutive years of red ink, plans to add capacity on major routes in peak periods, citing its London-Vancouver run during the Winter Olympics in February as an example.

"Adding flights at this point in the economic cycle takes courage, believe me," Rovinescu told a Vancouver audience gathered for the unveiling of an Olympics-branded Boeing 777 last week.

Courage probably isn't the word for it. Air Canada needs $600 million (Canadian) in financing to stave off insolvency.

Already the world's 14th-largest carrier, with more than 330 aircraft, what Air Canada needs is a thorough restructuring to get its costs down to within shouting distance of WestJet's.

"In the interim," airline analyst Fadi Chamoun of UBS Securities told Canadian Press last week, "equity holders will likely bear the brunt of the costs related to securing sufficient cash resources to bridge the liquidity gap until the economy recovers."

Air Canada shareholders have already suffered an 80 per cent drop in the value of their shares over the past year.

We need Waylon Jennings and Willie Nelson to reprise their 1978 hit "Mamas Don't Let Your Babies Grow Up to be Cowboys." The vocation you want to steer them clear of is airline executive.

"This industry is always in the grip of its dumbest competitors," Robert Crandall, long-time CEO of American Airlines, once complained.

"We have no choice but to match whatever low fare anybody puts out there.

"And so it will get as bad as they want it to get."

Air traffic falls 7.2 pct in June, hit by swine flu: IATA
30 July 2009
Agence France Presse

International air passenger traffic fell by 7.2 percent in June over 12 months, with the swine flu pandemic adding a blow to an airline industry already depressed by the economic crisis, IATA said on Thursday.

"These are extremely challenging times for airlines. There are no signs of an early economic recovery," said Giovanni Bisignani, director-general of the International Air Transport Association (IATA).

"Other external risks are potentially great, including rising oil prices and the impact of Influenza A(H1N1) on demand," he added.

IATA estimated that the effects of swine flu shaved up to four percentage points off growth rates for Asian-Pacific carriers in June, when a 14.5-percent fall was reported compared to the figure for the same month a year ago.

Latin American airlines posted a 4.7-percent drop in passenger demand, but this is "significantly better" than the 9.2-percent plunge in May, said IATA.

IATA said there were "early indications" that the Latin American region was beginning to recover from the impact of swine flu but pointed out that there was "still uncertainty around the spread of Influenza A(H1N1) and its effect on travel."

North American carriers also saw the sharp decline in traffic ease in May, with demand falling just 6.7 percent in June compared to 10.9 percent in May.

European carriers meanwhile posted a fall of 7.1 percent, compared to the May drop of 9.4 percent.

IATA said that even though the sharp decline in demand slowed in June compared to the rate in previous months, airlines had not reduced their capacity to match the fall.

"As a result, June revenue on international markets fell by a shocking 25-30 percent," it said.

Meanwhile, international air cargo traffic was down 16.5 percent, a 13th month running of contracting demand.

"There has been some improvement in world trade and, after adjusting for seasonal fluctuations, freight volumes rose six percent from the low point recorded in December 2008," IATA said.

At the current pace, air cargo traffic would take "several years" to return to early 2008 levels, it added.

Aviation crisis? What crisis? Budget carriers flourish amid economic gloom
5 August 2009

KUALA LUMPUR, Malaysia (AP) - Budget airlines have found a silver lining in the global recession.

As travelers pinch pennies and opt for cheaper alternatives, AirAsia, Europe's Ryanair and other low-cost carriers are adding routes and buying new planes to grab a larger slice of global aviation at the expense of their more established rivals.

Major players such as British Airways and Hong Kong's Cathay Pacific Airways have reported full year losses for the first time in years despite cutting costs and flights to cope with a downturn in premium air travel.

Full service carriers, which once completely dominated the skies, are banking on an economic recovery to restore their fortunes but they may find it tough to return to the growth levels they enjoyed before the crisis.

"Full-service airlines have a bit of conundrum on their hands," said Derek Sadubin of the Sydney-based Center of Asia Pacific Aviation. "We think low-cost carriers will become so much more entrenched in airports and corporate travel that it will be difficult for them to claw their business back" when the economy recovers, he said.

To be sure, all airlines have struggled as oil prices soared in the last two years. Oil prices have since tumbled and despite a rally early this year, are still half the level of a year earlier.

But major industrialized economies continue to contract and economic conditions are likely to remain tough even when a recovery is under way. The International Air Travel Association in June predicted airline losses worldwide to swell to $9 billion this year, nearly double its previous forecast.

Full service carriers are the worst hit as the downturn has hammered business and first-class travel, which make up a small percentage of seats but account for up to 40 percent of their revenues.

Their smaller, no-frills rivals are weathering the recession better with a low-cost model that relies on high passenger volumes, stripping out costs through strategies such as taking the cheapest landing slots at airports and turning full service features like meals and check-in baggage into profit-making extras.

In Asia, budget aviation has seen exponential growth since the start of the decade and now has a 16 percent market share, Sadubin said.

The market share of low cost carriers could cross the 20 percent mark in the next one to two years, he said, as they open up new routes across the region and give travelers an option to fly at a fraction of the cost charged by full service airlines.

Malaysian-based AirAsia, the biggest low-cost carrier in the region, posted a record profit of 203.2 million ringgit ($56.4 million) for the quarter through March, up 26 percent from a year earlier. Passengers soared 21 percent to 3.15 million during the period while falling at regular airlines.

It has ordered new planes, made its debut in Europe with flights to London in March and is eyeing plans to enter the U.S. market.

"We are in the McDonald's, Wal Mart category. Business is booming as people are looking for value," AirAsia Chief Executive Tony Fernandes told The Associated Press in a recent interview.

AirAsia's success has generated rivals, the best known of which are Singapore-based Tiger Airways and Qantas Airways-owned Jetstar.

Tiger, which is 49 percent owned by Singapore Airlines, is rapidly expanding and has a total 56 new aircraft on order for delivery through to 2016. Tiger expects business travel to account for 15 percent of its total traffic by March 2010, more than triple from current levels.

Budget aviation has put down even stronger roots in the U.S. and Europe, with about a one-third market share in both regions, analysts said.

In Europe, Irish discount airline Ryanair remained on an expansionary course and forecasts a net profit of up to 250 million euros ($350 million) for its 2010 fiscal year. It is eyeing plans to order up to 300 more aircraft in a deal that would make the Irish carrier more than double the size of British Airways.

In the cash-rich Middle East, analysts said budget aviation penetration is still low at less than five percent but new carriers have sprung up in recent months. FlyDubai, based in the United Arab Emirates, was launched in June and has unveiled ambitious expansion plans after ordering 50 Boeing 737 aircraft.

The intense competition from budget carriers has changed the rules of the game for some major airlines.

Many full service carriers are regularly churning up promotional offers -- with tickets at a discount of up to 80 percent -- in an effort to protect their market share.

Others like India's Jet Airways, Korean Air, and Malaysian Airlines have set up low-cost offshoots, relying on a two-brand strategy to cushion earnings.

Some carriers have taken more drastic steps to focus on lower-fare volume business.

British Airways has announced it won't configure any new planes to offer first-class cabins. Qantas has also scrapped first-class service on several long-haul routes and is considering reducing the 72 business seats in its Airbus A380 superjumbo jets.

But Singapore Airlines, one of Asia's top carriers, remains confident of a recovery in the premium market. It has cut fares and capacity this year but said it would not crop the 60 business seats in its A380 planes.

"It's a cyclical business and positive growth will return. We are not going to fundamentally change our business focus overnight just because of the downturn," said spokesman Nicholas Ionides.

Association Of European Airlines: June Traffic Dn 6.5% On Year
10 August 2009

LONDON (Dow Jones)--The Association of European Airlines Monday said traffic fell 6.5% on year in June, an improvement from the 8.3% decline in May, but added that the market remains weak.

Seat capacity, measured as available seats per kilometer, fell 4.9% on year and was consistent with reductions airlines made in May, said the AEA, which represents 33 European airlines.

Although carriers reduced frequency, the AEA said the rate of reduction "still didn't match the weakening market," and as a result load factor - which measures how many available seats are filled with paying passengers - fell 1.3 percentage points to 77%.

AEA said the hardest-hit market was for flights between Europe and the Far East, down 10.7% - the first double-digit traffic decline for flights between these regions since the SARS epidemic of 2003.

However, preliminary data show that traffic declines have eased in July - usually a peak time for summer travel - by 2.2% on year.

Capacity reductions slowed compared with May and June to 3%, but the AEA said the reductions were "at last sufficient to counteract the market decrease and drive a small improvement in load factor."

Fragile air traffic recovery under way - IATA

GENEVA, Aug 27 (Reuters) - A recovery in air traffic is under way, according to latest data from a global industry body, in another sign the world economy is clawing its way out of recession.

But the recovery will be "volatile and weak", the International Air Transport Association said on Thursday, indicating the turbulence that has buffeted an industry facing another year of multi-billion dollar losses is not at an end.

Airlines carried 11.3 percent less cargo and 2.9 percent fewer people in July than a year earlier, IATA said in its latest monthly reading of cross-border traffic, a leading indicator for the health of world trade.

The figures represented an improvement from June, when the year-on-year declines were 16.5 percent for cargo and 7.2 percent for passengers.

Air freight is a good leading indicator of world trade movements, since shippers tend to switch to air when speed is more important than cost -- at the start of an upturn -- and switch to ocean transport in a recession, IATA says.

As a result, air freight is first into recession but usually is first out, it said in a recent analysis.

So far this year, freight volumes have fallen 19.3 percent and air travel is down 6.8 percent, according to IATA, whose data exclude domestic flights.

And compared with June and adjusted for seasonal factors, both freight and passenger travel grew by more than 3 percent in July, it said.

"The data can be rather volatile but this does confirm earlier signs that a recovery in demand for air transport has begun, though there are good reasons for expecting the path of further recovery to be volatile and weaker than recoveries from previous recessions," IATA said.

IATA said there was a varied regional pattern, with passenger traffic in the Asia-Pacific remaining weak but improving, with a strong rebound in air freight reflecting recovery in several Asian economies.

Airlines in Europe and North America are seeing less improvement in freight, but a stronger improvement in passenger volumes which could reflect earlier cuts in fares.

Passenger capacity was more in line with demand in July, with passenger load factors averaging 80.3 percent, but excess capacity continued to emerge in the freight sector, it said.

"Downward pressure on freight rates and revenues continues to increase," said the Geneva-based body, which represents 230 carriers including British Airways, Cathay Pacific, Emirates and United Airlines.

IATA has estimated airlines will lose $9 billion in 2009 after an $8.5 billion loss in 2008, when high oil prices hit profits and then the global credit and financial crisis slashed demand for business and leisure air travel.

IATA estimated last year that $3.5 trillion of goods were transported by air in 2006, representing 35 percent of international trade.

Airlines lost more than $6 bln first half '09-IATA

GENEVA, Sept 1 (Reuters) - The world's airlines are being squeezed even as the global economy recovers, with higher oil and jet fuel prices causing added pain, an industry group said on Tuesday.

Net losses continued to expand in the second quarter of 2009, reaching at least $6 billion for the first half of the year, the International Air Transport Association (IATA) said.

In its latest financial monitor, it said the second quarter of 2009 involved "further deterioration" for airlines' bottom lines. Big carriers normally take in half their annual profits in the season that includes the northern hemisphere summer.

"This year Q2 losses of $2 billion follow Q1 losses of $4 billion," IATA said in a statement. "Total industry losses in the first half of 2009 are likely to have been in excess of the reported $6 billion.

IATA has previously estimated airlines will lose $9 billion in 2009 after an $8.5 billion loss in 2008, when high oil prices hit profits and then the global credit and financial crisis slashed demand for business and leisure air travel.

The Geneva-based group, whose 230 member airlines fly some 93 percent of international air traffic, also said that signs of economic rebound had pushed up energy prices in August, with jet fuel prices above $80 a barrel.

While air cargo volumes and passenger numbers rose in July, improving from their credit crunch and recession lows, IATA said "both remain well below levels seen at the same time last year."

"There was a material improvement in July but the future path is likely to be volatile and weaker than normal recoveries," it said.

IATA, whose members including British Airways, Cathay Pacific, Emirates and United Airlines, said last week that declines in cargo and passenger traffic in July were less than in the previous month.

The industry's recovery was under way but will be "volatile and weak", it said.

Global air travel may not recover until 2011
9 September 2009

HONG KONG (AP) - International air travel, whacked by the economic downturn, is starting to stabilize but may not recover until 2011 as companies and passengers continue to scale back, executives at aviation giants Boeing Co. and Airbus SAS said Wednesday.

Passenger travel, somewhat better so far in the second half of 2009 than in the first, was still expected to slump between 6 percent and 8 percent for the year, said Randy Tinseth, a Boeing vice president for marketing.

Still, there were signs the drop in demand was slowing, with global airlines beginning to restore capacity and the Chinese and Latin American markets picking up, he said.

"We're already starting to see some improvements in traffic and traffic growth, but we've got a long ways to go," Tinseth told reporters at an Asian aerospace and aviation show in Hong Kong. "We see 2010 as a year of economic recovery and 2011 as a year of air travel recovery."

Airlines have racked up massive losses since the global economic crisis led companies to curb travel and shipping and consumers cut back on trips. Carriers, their losses already $6 billion in first six months of the year, are set to lose a total of $9 billion for all of 2009, according to the International Air Transport Association.

Boeing rival Airbus, the world's largest manufacturer of commercial planes, said air traffic seemed to be in the process of bottoming out and was slightly more optimistic.

Global air traffic -- measured by a combination of revenues, passengers and distances flown -- could slide between 2 percent and 4 percent this year, but then turn flat or grow as much as 4 percent next year, according to Laurent Rouaud, the aircraft manufacturer's senior vice president for market and product strategy.

In 2011, traffic could grow over 6 percent, he said.

Asia, where major economies like China and India are still expanding fast despite severe contractions in the West, was likely to lead the recovery. The region's air traffic may be up 4 percent this year and at least 6 percent in 2010, he said.

Boeing's Tinseth said Asia is set to overtake North America as the world's largest air travel market over the next 20 years, growing from its current 32 percent share to 41 percent.

Boeing sees return to cargo traffic growth next year

HONG KONG, Sept 9 (Reuters) - U.S. aerospace giant Boeing Co expects global air cargo traffic to return to growth next year amid a broad economic recovery, with the United States and China leading the way, a senior executive said on Wednesday.

Air cargo growth typically leads economic and passenger traffic growth by 3-6 months, Jim Edgar, Boeing's regional director, cargo marketing, said at the Asian Aerospace Expo in Hong Kong.

"This year, we're anticipating a deeper decline and it'll be the first time in history that we'll have two years of decline back to back," Edgar said, referring to worldwide cargo traffic.

"The decline is slowing ... things are improving and we're hopeful, but there's a way to go yet," he said, adding that near-term certainties include the global economy, oil prices and the stability of financial institutions.

Generous stimulus packages from governments will prop up the global economy, Edgar said.

"We expect the U.S. and China to lead the worldwide recovery, followed by the EU, UK and Japan," he said.

Air freight, a leading indicator of the health of world trade, is picking up slowly, but is still down on last year and the upturn remains fragile, the International Air Transport Association (IATA) said last week.

Airlines carried 11.3 percent less cargo in July than a year earlier, according to IATA data.

Boeing, like its European rival, EADS' Airbus unit, has had a difficult year as carriers and air cargo operators have seen less business during the global recession.

The road to recovery for the airline industry still looks bumpy for the current second half, said Randy Tinseth, vice-president of marketing for Boeing Commercial Airplanes.

"We're going into the worst part of the year -- it'll be a pretty tough next 4-6 months," Tinseth said. "But in 2010, there'll be a bounce back in traffic."

On Tuesday, Airbus said it was seeing signs of recovery in freight demand and expects a recovery in total passenger traffic volume by 2010.

Airbus and Boeing are headed for their worst annual order tally in at least 15 years as struggling airlines cancel or defer almost as many planes as they are buying.

The world's airlines are expected to post 2009 losses of $9 billion, with first-half net losses hitting at least $6 billion, IATA has said.

Airline trade group forecasts deeper 2009 losses
15 September 2009
By John Crawley

WASHINGTON (Reuters) - The outlook for global airlines this year has worsened, with a leading trade group projecting $11 billion in losses as weak passenger and cargo demand pressure revenues.

"The industry situation remains bleak," Giovanni Bisignani, director general of the International Air Transport Association trade group, said Tuesday.

"With rising fuel costs and falling yields, recent optimism in the global economy has not appeared on the industry's bottom line," he told government and industry officials in a speech.

In coming months the airline industry could see other bankruptcies, Bisignani said, declining to be more specific about carriers or regions that are most vulnerable.

But he said smaller- and medium-sized carriers have not had the access to debt markets that their larger peers enjoy, putting them in a more fragile condition.

Low-cost, Slovakia-based airline SkyEurope filed for bankruptcy and suspended all flights earlier this month. Japan Airlines , Asia's biggest carrier, is undergoing a state-supervised restructuring after years of losses. U.S. and other carriers are seeking to invest in the company.

Bisignani said the two-year downturn is worse than the financial hit carriers took after the Sept. 11, 2001 hijack attacks on New York and Washington when travel was severely depressed.

"This is not a short-term shock," Bisignani said in projecting nearly $4 billion in losses for 2010.

But airlines are not looking for government bailouts similar to help extended after the 2001 attacks and the billions given to distressed U.S. automakers this year, he said.

In the United States, Bisignani made his first formal pitch to the Obama administration to relax the law that restricts foreign ownership of domestic airlines.

The IATA trade group estimated in June that airlines would lose $9 billion in 2009 after an $8.5 billion loss in 2008, when record high oil prices dragged down results.

The Geneva-based group's 230 member airlines account for some 93 percent of international air traffic. Members include British Airways, Cathay Pacific, Emirates and United Airlines.

During an earlier conference call with reporters, Bisignani said revenues were expected to slump by 15 percent this year and would not return to 2008 levels until 2012 at the earliest.

For 2009, IATA said it expects passenger traffic to fall 4 percent, compared with its June estimate of 8 percent. It sees cargo demand falling 14 percent.

The updated forecast assumes oil prices average $61 a barrel, up from $56 a barrel in the previous forecast.

U.S. STOCKS HIGHER AS SENTIMENT IMPROVES

Despite the dour forecast, sentiment on airlines has improved recently as cost-cutting has helped soften the blow from weaker demand and some airlines have said revenue trends may improve.

U.S. airline shares were mostly higher Tuesday, with some carriers rising as much as 8 percent. The Arca Airline Index was up more than 4 percent.

Among non-U.S. carriers, Air France-KLM rose 1 percent in Paris and British Airways was flat in London trading.

"The dynamics of the U.S. airline industry are very different from the dynamics of the global airline industry" that IATA represents, said Michael Boyd, an airline consultant.

For instance, he said non-U.S. carriers such as JAL are highly dependent upon international travel that has taken a hit in the recession, unlike U.S. airlines.

On Monday, Delta Air Lines Inc, the world's largest carrier, boosted its operating margin forecast for the third quarter, citing an estimated drop in fuel costs.

After Delta's improved outlook, many investors are betting that other U.S. airlines will come out with similarly positive announcements, said airlines analyst Helane Becker of Jesup & Lamont Securities.

"The realization that everyone else is going to put out guidance is maybe catching up to people," Becker said in explaining the airline stock rally on Tuesday. In a research note Monday, J.P. Morgan analyst said he expected Continental Airlines to be the next to unveil an improved outlook.

The new forecasts could spur a rash of analyst upgrades, which would bode well for stocks.

"A lot of stocks are rated 'hold' or 'sell' by a lot of analysts," Becker said. "There is room for analyst upgrades."

Concouse 3

http://img170.imageshack.us/img170/3430/800pxdxbconcourse3trip2.jpg

Air travel slump has bottomed out, says trade body
30 October 2009
The Herald

THE slump in aviation triggered by the global recession bottomed out last month but the industry is still a long way from recovering from a historic loss of passengers, the leading international airline representative body has said .

Figures from the International Air Transport Association (Iata) show passenger numbers on international flights grew marginally in September and that load levels - the proportion of seats on a plane that are filled - had recovered to "pre-crisis" levels.

However, the body, which represents some 230 airlines, said the latest figures were "misleading" as they compared with an exceptionally bad month last year, and that rising costs and a sharp drop in the lucrative business market were still making it difficult for operators to survive.

Giovanni Bisignani, Iata's director general, said: "It is far too early to call this a recovery. The worst may be over in terms of the fall in demand, but yields continue to be a disaster and costs are rising. " With Edinburgh the glaring exception, most of the UK's airports have continued to report a continuing decline in passengers in recent months, though the rate has slowed from the precipitous drop around September last year.

Glasgow and Aberdeen airports, both owned by BAA, saw passenger numbers fall by 12per cent and 9per cent respectively last month while Prestwick Airport in Ayrshire saw an even more tumultuous 28per cent decline, brought about by cuts in capacity by Ryanair.

The no-frills airline has meanwhile expanded in Edinburgh, helping to fuel a 3.8per cent increase in passenger numbers in September, its fourth consecutive month of growth.

In the latest addition to its network, Ryanair yesterday announced a new service from Edinburgh to Bordeaux, which will begin service on March 10 next year with four flights scheduled a week.

International passenger demand is now 5per cent higher than the low point reached in March 2009, but 6per cent below the peak recorded in early 2008, Iata said yesterday.

Aircraft are flying less frequently, which increases costs, and airlines have also been hit by the continuing rise in fuel prices.

Airlines raise cash but IATA keeps 2009 loss outlook

GENEVA, Nov 3 (Reuters) - The world's leading airlines were able to raise $8 billion in new cash from capital markets in the past two months, but their full-year outlook remains worrisome, an industry group said on Tuesday.

In its latest industry snapshot, the International Air Transport Association said it still expected airlines to lose $11 billion on a net basis in 2009 and warned that with jet fuel prices on the rise, cash flows would be under pressure.

Air fares have been nudging up along with improved economic and consumer sentiment worldwide, IATA said, while stressing that prices remain much lower than they were before the financial crisis hit.

"The revenue environment remains extremely challenging," said the group, which represents 230 airlines including British Airways , Qantas , United Airlines , Cathay Pacific and Emirates [EMIRA.UL].

It has previously said the airline sector would lose $4 billion in 2010 as a result of continued economic improvement.

Airlines to lose $5.6 billion in 2010, on top of $49 billion losses since 2000
15 December 2009

GENEVA (AP) - The global airline industry will face another harrowing year in 2010, with losses expected to reach $5.6 billion despite some recovery in passenger and cargo traffic, an industry group said Tuesday.

Low yields and rising costs are a "continuing disaster" for world airlines, who have already lost $49 billion since 2000, according to the International Air Transport Association. The industry group maintained its estimate of $11 billion full-year losses for 2009.

"The worst is likely behind us," said IATA chief executive Giovanni Bisignani. "Some key statistics are moving in the right direction. Demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs."

Still, he conceded that "airlines will remain firmly in the red in 2010."

IATA attributed much of the pressure on the "extraordinarily low" yields airlines are currently generating -- the average price someone pays to fly one mile. Those will barely improve in 2010 because of a glut of planes on the market and lower corporate travel budgets, it said.

The group, which represents 240 airline companies worldwide, has been forced to lower its forecasts as the intensity and longevity of the economic crisis became clearer. It had earlier forecast $3.8 billion in losses for 2010, and only 12 months ago was predicting that deep cost cuts by U.S. carriers would limit industry losses to $2.5 billion for this year.

"2009 very quickly got much worse than we expected," said IATA chief economist Brian Pearce.

Passenger traffic fell 4.1 percent, from the already-low levels they reached in 2008 when financial markets collapsed, and premium fares fell the hardest. Cargo traffic, meanwhile, declined 13 percent.

The U.S. carriers that were being counted on to lead the industry toward recovery also struggled, losing an estimated $2.9 billion in 2009. European airlines and Asia-Pacific carriers both lost around $3.5 billion, while the Middle East fared somewhat better, with a negative result of $1.2 billion.

Latin America was the only region in the black in 2009, and is expected to be the sole profit-maker again next year.

IATA said it expects passenger traffic to bounce back by 4.5 percent in 2010, with nearly 2.3 billion people traveling. Cargo demand will perk up by 7 percent, but remain significantly below the peak traffic of 41.8 million tons in 2007.

Bisignani said 2010 will look similar to 2007 in terms of passenger traffic and an oil price of around $75 a barrel. But revenues will be $30 billion less next year than in 2007, and "change is needed," he said.

He urged airlines to focus on the traditional solutions of conserving cash and cutting costs, while governments should cut taxes.

After 30 airlines were eliminated in 2009, Bisignani said the big carriers were healthier now as a result of $38 billion in cash they have raised this year. Still, carrier debts total $220 billion and regional carriers may be in trouble.

"I don't see the threat of major bankruptcies, but smaller airlines (will) have difficulty accessing credit," he said. "As a result, they are fragile."

Beyond the airline data, Bisignani also launched a surprisingly sharp criticism of the British government for raising taxes on emissions with the purported goal of halting global warming. The higher charges are robbing carriers of the money they need to invest in cleaner technologies to fulfill an industry pledge to halve carbon emissions by 2050, he said.

"The U.K. is the worst tax offender," Bisignani told reporters. "Now the government admits that it is just a tax to pay bankers' bonuses, completely unrelated to the environment."

Concouse 3

http://img170.imageshack.us/img170/3430/800pxdxbconcourse3trip2.jpg

..where?

Asia-Pacific airline passengers slump 5.7 percent in 2009
22 January 2010
Agence France Presse

Asia-Pacific airlines suffered a 5.7 percent drop in passenger numbers and an 11 percent slump in cargo traffic in 2009 as they weathered their worst ever downturn, an industry body said Friday.

The Association of Asia Pacific Airlines (AAPA) said that the collapse in corporate travel and intense price competition during the global recession saw airline revenues tumble 20-25 percent.

"We have been through downturns before, but none as severe as we’ve experienced in the past two years," AAPA director general Andrew Herdman said in a statement.

Airlines cut flights and cargo capacity, and shaved back on costs, but were still not able to fully offset the effects of sharply lower revenues, compounded by continuing volatility in oil prices, he said.

"Overall, Asia Pacific airlines are expected to report significant losses for 2009, following similar heavy losses suffered in 2008," he said.

However, Herdman said traffic numbers in recent months had shown signs of recovery.

"The cargo business is regaining some of its dynamism, and passenger demand on short haul leisure routes within the region has already picked up, although business travel demand is recovering more slowly," he said.

Regional airlines faced the task of "conserving cash, rebuilding damaged balance sheets, and carefully managing capacity to match demand as they work towards restoring profitability."

"Whilst we remain hopeful about future prospects, the outlook for 2010 very much depends on the sustainability of what still appears to be a rather fragile global economic recovery."

The International Air Transport Association (IATA) has said it expects Asia-Pacific carriers to lose 700 million dollars this year, an improvement from the 3.4 billion dollars lost last year.

Singapore Airlines posted its first quarterly loss in six years during the June 2009 quarter and deferred the delivery of eight A380 superjumbos. Australia's Qantas and Hong Kong's Cathay Pacific also saw earnings slump.

Asia's largest carrier Japan Airlines this week filed for bankruptcy, and other airlines could be in line for government bailouts.

Globally, IATA is forecasting a loss of 5.6 billion dollars for the industry this year.

Air cargo jumps in Dec but aviation outlook tough -IATA

GENEVA, Jan 27 (Reuters) - Air freight traffic jumped by almost a quarter in December in a positive end to the aviation industry's worst year, showing economic recovery is picking up steam.

However, the International Air Transport Association (IATA) said the aviation sector would face a tough 2010 making up for the lost demand in 2009 and handling new security demands.

"The industry starts 2010 with some enormous challenges. The worst is behind us, but it is not time to celebrate," IATA Director-General Giovanni Bisignani said in a statement.

The slump in demand in 2009, the worst year in the industry's history, meant airlines would face another spartan year adjusting to two-and-a-half lost years of passenger growth and three-and-a-half years of lost freight growth, he said.

This would require airlines to focus on matching capacity to demand and controlling costs, he said.

"In terms of demand, 2009 goes into the history books as the worst year the industry has even seen," Bisignani said.

IATA said air cargo traffic -- a barometer of the strength of world trade -- in December was 24.4 percent higher than a year earlier. Its load factor, an industry measure of capacity utilisation, was 54.1.

But this year-on-year strength was exaggerated by an unusually weak December 2008, the low-point in the cycle.

For 2009 as a whole, freight demand fell 10.1 percent -- in line with the World Trade Organisation's forecast for the contraction in global trade -- for a load factor of 49.1.

Passenger demand rose 4.5 percent in December for a load factor of 77.6, but for the year as a whole it fell 3.5 percent, giving a load factor of 75.6, said IATA, which groups 230 airlines including British Airways , Singapore Airlines , and Emirates [EMIRA.UL].

In a further sign of economic recovery, the Dutch CPB institute said trade in the three months ended November was 5.7 percent higher than in the preceding three months -- the biggest increase since it started tracking trade data in 1991.

The more volatile monthly figures showed trade volumes rose in November by 1.1 percent from October, when they increased by an upwards revised 1.4 percent, but were still 12 percent below their April 2008 peak, said the institute, whose trade data is used by the World Bank and European Commission.

Bisignani said the aviation industry would have to face tougher security requirements following an attempt to blow up a U.S. passenger jet on Dec. 25.

Bisignani said global airlines were spending $5.9 billion a year on security measures, which were the responsibility of governments who should be picking up the bill.

IATA has forecast that airlines will lose $5.6 billion on a net basis this year after losing $11 billion in 2009.

Russia air traffic fell 9.4 percent in 2009
28 January 2010

MOSCOW, Jan 28 (Reuters) - Russian air passenger numbers fell 9.4 percent in 2009 as the global downturn in air travel took its toll, a figure nearly three times as severe as the global average.

Russia's state air transport agency said on Thursday that 45.1 million business and holiday travellers had flown in the country last year, down 9.4 percent on 2008, though December had recorded an 18.7 percent jump.

The International Air Transport Association (IATA) said on Wednesday 2009 air traffic fell 3.5 percent globally, while also recording a sharp rise in December.

Oleg Panteleev, editor of the specialist aviaport.ru website, said he expected Russian air passenger traffic to rise 8 percent in the current year as the economy picks up.

"Aviation is very sensitive to the economic climate," he said.

The Russian agency added that state carrier Aeroflot carried 5.6 percent fewer passengers in 2009, beating the overall Russian market.

The government has had to mop up a string of defunct airlines destroyed by the industry crisis, pulling them together into the combined group Rosavia.

The state also took greater control of Aeroflot earlier this week, agreeing to take a near 25.8 percent stake from tycoon Alexander Lebedev to top up its shareholding to over 75 percent.

Air freight, passenger data jump in Jan-IATA
2 March 2010

ZURICH, March 2 (Reuters) - Asia powered improved demand for international air traffic in January as both passenger and freight figures jumped by more than the sharp falls triggered by the financial crisis a year ago.

Air freight traffic rose by 28.3 percent while passenger demand was up 6.4 percent from a year earlier, the International Air Transport Association (IATA) said.

Asia led the rise in air cargo with a jump of more than 38 percent while passenger demand was up 6.5 percent.

Still, IATA Director General Giovanni Bisignani warned that the recession-hit airline industry faced another tough year as yields -- the profit margins airlines make on passengers and cargo -- remained under pressure.

"We can start to see the future with some cautious optimism, but better volumes do not necessarily mean better profits," Bisignani said.

Last January, airlines caught in the depth of the crisis scrambled to cut flights as companies shelved business travel and cargo shipments.

Air freight is a good leading indicator of world trade movements since shippers tend to switch to air when speed is more important than cost.

Demand is strengthening, with this January's traffic showing bigger rises than those in December, when air freight was up by 24.4 percent and passenger demand was up 4.5 percent.

IATA also said January freight and passenger demand rose from December when adjusted for seasonal factors.

Air freight fell 10 percent in 2009, reflecting a fall in global trade which the World Trade Organisation estimated at 12 percent.

Bisignani said despite recent improvements in volumes passenger yields were still 15 percent below peak and the industry remained on course for losses of $5.6 billion this year.

Tough times have spurred a fresh round of consolidation, such as a deal sealed last year between British Airways and Spain's Iberia.

IATA represents some 230 airlines operating 93 percent of all international traffic. Domestic flights are excluded from its data.

IATA says airline traffic up 5.7 percent in January; economy traffic inching near 2008 highs
17 March 2010

NEW YORK (AP) - An international airline group said Wednesday that airlines flew 5.7 percent more passengers in January than the same month a year earlier.

The International Air Transport Association said premium travel rose 5.5 percent in the first month of 2010, while economy travel rose 5.7 percent.

Compared with recent low points last year, first and business class traffic has improved more than coach, IATA said. But premium traffic has much farther to climb to reach 2008 peaks. Premium traffic is now 16 percent under 2008 highs, while economy is just 3 percent under the best times of that year.

Fares are also rising and are up about 10 percent from mid-2009 lows, the trade group said. But fares for business and first class are still 30 percent lower than early 2008 highs, on average.

Dubai Airport Feb. Passenger Traffic Rises 22.6% to 3.64 Million
March 22, 2010, 3:37 AM EDT

http://www.businessweek.com/news/2010-03-22/dubai-airport-feb-passenger-traffic-rises-22-6-to-3-64-million.html

By Arif Sharif

March 22 (Bloomberg) -- Dubai Airports, home to the biggest Arab airline Emirates, said passenger traffic grew 22.6 percent in February from a year ago to 3.64 million.

Cargo handled by the airport jumped 26.7 percent in February to 171,707 tons, the state-run facility said in an e- mailed statement today. The strongest passenger growth was reported from Western Europe, the Indian subcontinent and the Middle East, it said.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

World airline industry seen back in black in 2011

SANTIAGO, March 24 (Reuters) - The world's airlines should post a combined profit in 2011, after an expected loss of about $2.8 billion in 2010, the head of airline industry body IATA said on Wednesday.

A shortfall in global air carriers' revenues from their peak in 2008 should be made up within two years, IATA Director-General Giovanni Bisignani told a news conference at the FIDAE air industry fair.

"With a loss of $2.8 billion this year, I think we can say with a reasonable degree of certainty that we will be back in the black in 2011," Bisignani said. He said the body would issue its forecast of 2011 industry results in June.

A gap of nearly $80 billion in annual revenues lost since a 2008 peak would be made up within two years, he said.

IATA forecasts industry revenues of $522 billion for 2010, which is still $42 billion shy of 2008 levels.

"We have an (expected) improvement this year of $43 billion (over 2009 levels), so we suppose that in two years we will recover the loss," Bisignani said.

He expects airlines in North America to post a combined loss of about $1.8 billion in 2010, and sees European airlines losing a total of $2.2 billion.

However, Latin American airlines will post a combined profit of about $800 million this year, he forecast. Bisignani expects air traffic demand in Latin America to rise 12.2 percent in 2010 from 2009 levels.

IATA groups about 230 airlines, including Air China , Lufthansa , Singapore Airlines and Skywest.

IATA chief says further airline mergers essential

TOKYO, April 12 (Reuters) - Further mergers among airlines are essential in order to cut costs and improve competitiveness in an industry seen sustaining combined losses of $2.8 billion this year, the head of airline industry body IATA said on Monday.

"Mergers and consolidation is a must ... I strongly support consolidation," Giovanni Bisignani, director-general of the International Air Transport Association, told few reporters in Tokyo.

Asked about a possible merger between United Airlines and US Airways , he said he would not comment on individual deals.

IATA said on March 30 that airlines were climbing out of recession with strong rises in passenger travel and cargoes in February. Passenger demand in February was up 9.5 percent from a year earlier, while supply increased by only 1.9 percent.

IATA Sees Faster Than Expected Recovery Of Aviation Industry
3 June 2010

BERLIN (Dow Jones) - The airline industry will recover quicker than expected from recent crises, the International Air Transport Association said Thursday, adding it is "cautiously optimistic" about the expected losses for the current year.

"The recovery in the airline industry will probably take two years," IATA Director General and Chief Executive Giovanni Bisignani said at a press conference in Berlin. There are "very, very clear signs," he said, pointing to significantly higher air traffic and freight volumes. He added, however, that losses for the sector are to be expected this year and next year.

The international trade body represents some 230 airlines worldwide, comprising 93% of scheduled international air traffic.

"The strong [air] traffic trend that showed before the eruption of the volcano in Iceland, allows us a positive stance toward the future," Bisignani said. The global economic recovery is getting along faster than expected, adding "it is finally time for cautious optimism."

Monday, IATA will present a new outlook for the aviation industry, after the expected 2010 loss was already halved to $2.5 billion in March, Bisignani said, four days before the annual general meeting of the industry and the World Air Transport Summit in Berlin.

Air passenger, cargo traffic rise in May - IATA

ZURICH, June 29 (Reuters) - Demand for air travel and air freight rose strongly in May and now exceeds levels seen before the global economic downturn, the airlines body IATA said on Tuesday.

Passenger demand rose 11.7 percent from a year earlier, while cargo demand was up 34.3 percent, the International Air Transport Association said.

IATA's 230 members include British Airways , Singapore Airlines and United Airlines .

"Demand rebounded strongly in May following the impact of the European volcanic ash fiasco in April. Passenger traffic is now 1 percent above pre-recession levels, while the freight market is 6 percent bigger," said Giovanni Bisignani, IATA's Director General.

European airlines recorded the weakest growth in passenger demand at 8.3 percent, while Latin American carriers recorded the fastest growth, with a 23.6 percent increase, IATA said.

Air cargo is seen as a leading indicator of the health of global trade.

Earlier this month, the Geneva-based IATA said government spending cuts and debt worries across Europe threatened to weaken demand for air travel on the continent.
Last month IATA said that in April, when the volcanic ash eruption in Iceland suspended flights across Europe and around the world, passenger traffic fell 2.4 percent year-on-year.

Morocco

Statistiques du 1er semestre 2010 :

1) Aéroport Mohammed V - Casablanca ------ 3 281 209 (+13,99%)
2) Aéroport Marrakech - Menara -------------1 675 819 (+11,02%)
3) Aéroport Agadir - Al Massira ----------------767 736 (+6,15%)
4) Aéroport Tanger - Ibn Batouta --------------322 754 (+22,72%)
5) Aéroport Fès - Saïss ------------------------319 874 (+37,39%)
6) Aéroport Oujda-Angads ---------------------182 897 (+16,20%)
7) Aéroport de Nador - Al Aroui ----------------172 078 (+31,95%)
8) Aéroport international Rabat - Salé---------- 153 995 (-3,15%)

Morocco

Statistiques du 1er semestre 2010 :

1) Aéroport Mohammed V - Casablanca ------ 3 281 209 (+13,99%)
2) Aéroport Marrakech - Menara -------------1 675 819 (+11,02%)
3) Aéroport Agadir - Al Massira ----------------767 736 (+6,15%)
4) Aéroport Tanger - Ibn Batouta --------------322 754 (+22,72%)
5) Aéroport Fès - Saïss ------------------------319 874 (+37,39%)
6) Aéroport Oujda-Angads ---------------------182 897 (+16,20%)
7) Aéroport de Nador - Al Aroui ----------------172 078 (+31,95%)
8) Aéroport international Rabat - Salé---------- 153 995 (-3,15%)

Are the increases attributable to LCC entry, such as Ryanair and easyJet? They're quite impressive increases.

http://farm5.static.flickr.com/4141/4786676110_7ea9c4839f_b.jpg

Brazil Embraer: China to Boost Global Regional Jet Demand To 4.9%
19 July 2010

SAO PAULO (Dow Jones)--Brazil's Empresa Brasileira de Aeronautica SA (ERJ, EMBR3.BR), or Embraer as the world's fourth-biggest plane maker is known, expects Chinese buying to boost global demand for regional jets to 4.9% a year over the next two decades.

China will likely see demand for planes with 30-to-120 seats expand 7.3% a year, while air travel in emerging economies including Latin America and Pacific Asia will grow 6% a year, Embraer said in a statement Monday.

Demand from North America and Europe will likely grow 3.5% a year through 2029, Embraer said.

The company, which is participating in the Farnborough air show in England, also said it sold regional jets to two Brazil airlines: Trip Linhas Aereas and Azul Linhas Aereas Brasileiras, the company founded by JetBlue Airways' David Neeleman.

Trip will buy two Embraer 190 planes for a total of $80 million, while Azul ordered five Embraer 195 jets for a total of $211 million. The Azul orders were already included in Embraer's backlog in the second quarter, the plane maker said.

http://www.euronews.net/2010/07/20/european-airspace-faces-radical-restructuring/

European airspace faces radical restructuring

The idea of a single European sky has been on the agenda since 1960 when Eurocontrol was formed to create a single airspace for the union’s six founding member states.

Forecasters predict that air traffic will double by 2020. Current systems will manage the growth until the middle of the next decade. Following that radical measures are required to prevent severe congestion.

As it stands there are 27 airspaces and 50 control centres. In 2012 the SES will come into force with the union of the airspace of France, Germany, Switzerland, Belgium, the Netherlands and Luxembourg.

The French air traffic unions believe the formation of the SES will result in the loss of public sector jobs.

The EU backs the plan designed to restructure European airspace based on traffic flow, rather than national borders, increased capacity and the overall efficiency of European air traffic control.

Bumped? You may be stuck ; Flight cutbacks mean fuller loads, fewer seats
17 August 2010
USA Today

Lots of luck catching another flight if you've been bumped or miss a connection.

Commercial airlines in the USA have never been so full. Seven of them -- Delta, American, United, Continental, US Airways, AirTran and Alaska -- reported filling at least 87% of their seats in July. Even Southwest, always the industry's laggard in load factor, beat the industry's average over the previous six Julys of 84.6% by filling 84.9% of its seats.

That leaves precious few spots available if you've been bumped off a full flight or miss a connecting flight. And because airlines are scheduling fewer flights than five years ago, travelers could face long waits for a direct flight to their destinations or have to settle for circuitous reroutings to get there.

Some travelers, such as Robert Beilstein, consider themselves lucky if a missed flight doesn't cost more than a day's time. Beilstein, a supply-chain software consultant from North Syracuse, N.Y., twice recently missed connections to San Antonio at Baltimore- Washington International Airport. He made it to San Antonio both times, after being rerouted via Denver.

"I did lose a day's worth of consulting revenue," he says. "But at least I did manage to get there in one day and didn't lose two days of revenue." He says he's even more "lucky" he hasn't been bumped from a flight lately.

For those who've been bumped off flights against their wishes, Transportation Secretary Ray LaHood has proposed increasing the maximum compensation from $800 to $1,300. The proposal is included in a package of "fliers' rights" rules that LaHood wants to impose this fall. The Air Transport Association, the trade group that represents the nation's biggest airlines, says it won't object to raising the compensation. Missing a connecting flight as Beilstein did is far more common than being bumped as a result of an airline selling more tickets for a flight than the plane has seats.

However, most delays leading to missed connections are caused by weather. And unlike overbooking, the weather is outside airlines' control. Most passengers who miss a connecting flight aren't owed anything, although airlines sometimes provide vouchers for meals and hotel rooms. LaHood isn't proposing to change that.

Most airlines automatically reschedule passengers with computer software that often predicts missed connections before a plane has landed. The airlines say this lets them speed people who've missed flights to destinations as quickly as possible.

Some travelers aren't convinced.

"Airlines do not care at all anymore if passengers are inconvenienced," says Jill Naas, a project manager from Seattle who flies at least monthly. She has been able to get other flights after missing connections, she says. But, she says, she's "had to fight like hell" and "emphasize" her elite-level frequent-flier status with airlines to do it.

A growing problem

Bumping, known as "denied boarding" in the industry, isn't a big problem, statistically speaking. In 2009, 69,416 passengers were involuntarily bumped, out of 584 million passengers boarded in the USA. An additional 695,510 were coaxed into giving up their seats by offers of discounts on future travel. The rate of involuntary bumping in 2009 was minuscule: 1.19 per 10,000 passengers boarded.

However, it's a growing problem. In the first half of this year, the rate rose to 1.37 per 10,000 boardings, the highest first-half rate of people involuntarily denied boarding in 16 years. The rise in involuntary bumpings is a byproduct of U.S. airlines' record- high passenger loads. That's the result of the airlines cutting capacity, or the number of seats available, by 12% since 2005 by reducing the number of flights or moving to smaller planes.

"The people who volunteer (to be bumped) ... tend not to be all that upset about it," says Ira Gershkoff, a former airline scheduler who develops software for SlipStream Aviation Software that helps airlines better match capacity to fluctuating travel demand. "They brag to their friends about the compensation they got. But those who are involuntarily bumped are upset. They ... had to be somewhere."

Ed Perkins, a contributing editor at SmarterTravel.com, says airlines for the most part handle the job of bumping passengers off a flight fairly well, though he thinks that passengers who are forced off flights against their will often aren't compensated sufficiently for the inconvenience.

"(Airlines) are able to take care of roughly nine out of 10 cases of bumping by offering people some kind of goody," says Perkins, who was Consumer Reports' travel editor for four decades. "But times do come when nobody wants to get off the airplane."

In addition to providing a seat on a later flight, carriers must pay involuntarily bumped passengers -- in cash or by check -- an amount equal to the price of their ticket, or $400, whichever is lowest. If the passenger arrives more than two hours late, the compensation cap rises to $800.

But the average domestic ticket in the USA in the first quarter of the year was $328. Few involuntarily bumped travelers ever get paid the full $800, or even $400. Typically, only those who buy first- or business-class tickets or full-price coach fares qualify for the maximum payout. The budget traveler flying on a $139 ticket gets only $139.

LaHood wants to raise the caps to $800 and $1,300. But Perkins says the formula, not the actual amount of compensation, is what's wrong.

"I see no reason why the dollar compensation should have anything to do with how much you paid for your ticket, because that doesn't have anything to do with the amount of inconvenience," he says. "The compensation should be a fixed amount. And for a lot of travelers, the money may not be near as important as fixing their trip. There ought to be more focus on that."

He says airlines should be required to put involuntarily bumped travelers on the next available seat to their destination, even if it means paying another airline to carry them.

Most airlines say they won't hesitate to put bumped fliers on competitors' planes if that's the best solution.

Monte Ford, chief information officer at American Airlines, says, "We have become more progressive in our thinking about how and when we put somebody on some other airline's aircraft. In a disruptive situation, we'll put somebody on someone else's airplane in a minute."

But critics such as Perkins say that's often done only as a last resort -- often after a bumped passenger's frustration boils over into an ugly confrontation.

Missing connections

Airlines don't have to report the number of passengers who miss connecting flights. But Gershkoff, who is researching the issue, thinks about 7% of all passengers miss their connections.

On the surface, absorbing those fliers shouldn't be a problem.

Despite fuller flights, airlines still can't fill about 20% of their seats over the course of a year. But missed connections don't happen at a steady pace. They come in bunches, often when bad weather throws flights off schedule at one or more big airport hubs.

Delays, which often lead to missed connections, also tend to have a ripple effect. An hour's delay on one plane in Dallas in the morning becomes a 90-minute disruption in New York by noon, a three- hour nightmare in Chicago by 5 p.m., and a five-hour-late arrival on the West Coast by the end of the day. Along the way, 500 passengers scheduled to fly on that one plane have their travel schedules thrown into chaos. Chances are if one plane is affected, 30 others are, too.

"A 30-minute fog event at one airport can throw the rest of the day off," says Michael Baiada, president of ATH Group, a consulting group that does time-flow management consulting work for airlines. "The flights using that plane throughout the day just go later and later and later."

More than 1.9 million passengers board flights on U.S. airlines on the average day. If just 10% miss connecting flights or can't begin their trips on time because travel is disrupted elsewhere, about 125,000 people could be forced to compete for the few remaining unsold seats that day. (Schedulers estimate that about a third of passengers who miss flights are leaving from their home airport and go home to wait a day before flying or simply give up their travel plans.)

And there are fewer flights to get on than five years ago.

For example, travelers who missed United Airlines' first flight from Chicago O'Hare to Raleigh-Durham in August 2005 had six more United flights that day to choose from, a USA TODAY analysis of flight schedule data provided by OAG Aviation Solutions shows. Today, there are only four flights total each day.

Five years ago, Continental flew four times a day from Cleveland to South Bend, Ind., the data show. Today, it has three flights. American has cut the number of daily flights from Dallas/Fort Worth to Huntsville, Ala., to three from six. In 2005, Northwest flew eight times a day from Cedar Rapids, Iowa, to Minneapolis-St. Paul. Delta, which bought Northwest in 2008, flies the route five times a day now.

As a result, it can take travelers a day or more to reach destinations. It can cost hours of scrambling on the phone, extra expense and stress. It's also why travelers say it's important how airlines and airline workers treat them when things go wrong.

Mitchell Fong, a financial services industry executive from Mill Valley, Calif., who flies 200,000 miles a year, recalls a day last winter when his flight into Chicago arrived too late to make his connection to Milwaukee. United's computer system automatically rebooked him on the next available flight -- the next morning. Fong would have missed his meeting in Milwaukee. Luckily, he hitched a ride that night with an associate who happened to be driving there.

"United was not sympathetic, did not offer any compensation and did not offer extras or perks to ease my situation," Fong says.

U.S. airlines' aren't obligated to provide anything beyond rebooking to travelers who miss connections for reasons beyond airlines' control, such as weather. Being an elite member of a carrier's frequent-flier program may be the single best way to avoid being bumped, and of getting one of the few available seats on the next flight. But it's no guarantee.

Airlines consider the price paid by each disrupted passenger for their ticket; whether any have health issues that require special attention or are unaccompanied minors; whether passengers are part of a group; and most important, which passengers will be the most inconvenienced, or delayed the longest, if they don't get the next available seat.

It also helps to check in early. Check-in times can be the tie- breaker.

Rahsaan Johnson, a spokesman for United, says the difficulty in getting a seat nowadays is overstated. And, he says, getting one shouldn't be thought of as a contest between passengers.

"Every day of the week, there are airline employees and retirees who are at the bottom of the stand-by list, who do get onboard planes and enjoy a flight," he says. "It's a fallacy that with 85% load factors, you can't get a seat. Statistically, it is more difficult. But it is done all the time."

Contributing: Barbara Hansen

Airlines start lining up for Africa take-off
18 August 2010
Financial Times

The football World Cup is over, the vuvuzelas have been consigned to the dustbin and fans have turned their attention from Africa to Brazil, host of the 2014 contest. But for one group at least, the continent remains in sharp focus: international airlines.

According to the International Air Transport Association, airlines increased the amount of flying capacity to and from Africa by 8.6 per cent over the year to the end of June compared to 2009, more than any other region except for the Middle East.

Over the next three years Iata forecasts that the number of passengers travelling to and from Africa will rise at a compound annual rate of 6.5 per cent, making it one of the fastest growing regions in the world.

While US and European airlines have been cautiously adding capacity to Africa for years, the drive has picked up in intensity in recent months, leading industry executives to talk of a new "scramble for Africa" as airlines position themselves for the future.

Executives point to high growth levels that suggest an increasing need, and ability to pay, for travel by air. Africa's real gross domestic product was $1,600bn in 2008, having grown 4.9 per cent per year since 2000 - more than twice as fast as in the 1980s and 1990s.

Much of that can be put down to Africa's large mineral reserves - which have become a focus of fast-growing Asian economies. Traffic between Asia-Pacific and Africa is forecast to grow at 9 per cent per year over the next decade according to some estimates.

US and European airlines are also boosting their connections to resource-rich regions. In June, Delta Air Lines started a service between Atlanta and Accra and aims to add services to Liberia, Angola, Equatorial Guinea, and Kenya in the near future.

Lufthansa, Europe's biggest airline group and a key provider to Africa, has ramped up its connections, adding two new services in west and central Africa and expanding several more since 2008. The group now has 222 flights a week to 33 destinations in Africa.

A recent report by McKinsey Global Institute, entitled Lions On The Move , suggests that the economic foundations of Africa's recent success are broader and therefore will have more "staying power".

Natural resources accounted directly for only a quarter of Africa's GDP growth over the decade while "the rest came from other sectors, including wholesale and retail, trade and transportation, telecoms and manufacturing".

Indeed, Airbus, the European aircraft maker, predicts the recent aviation ramp-up will be sustained. Over the next 20 years the amount of filled capacity on flights between Africa and other parts of the world will grow at 5.6 per cent each year, albeit from a low base.

"There is a lot of money in Africa right now," says Glen Hauenstein, head of network planning at Delta Air Lines, the world's largest airline by revenues. "GDP is small in absolute terms but it is rapidly expanding as political stability spreads."

In this newly competitive environment, US airlines are playing catch-up. While European carriers have offered direct services for decades, non-stop flights from North America to Africa have traditionally been limited, and slumped after the industry recession following the September 2001 terrorist attacks.

Mr Hauenstein says Delta began experimenting with flights to Africa in 2006 with a connection between its hub in Atlanta, Georgia, and the tourist destination of Johannesburg in South Africa, via Dakar, Senegal.

The success of that route has led Delta to try others, with an emphasis on west and sub-Saharan Africa where avoiding European connections can save US travellers time.

Part of the problem was aircraft technology, says Greg Hart, vice-president of network strategy at Continental.

Until the Boeing 777 was developed in the mid-1990s, many destinations in Africa were too far from the US for direct connections, and even then the 777 was too big to make some routes profitable. With the arrival of Boeing's much delayed 787, due around the turn of the year, Mr Hart says that many airlines will for the first time have the right aircraft for the job. Continental plans to connect the energy capitals of Houston and Lagos with a service starting in November 2011. Still, considerable obstacles must be overcome.

According to a 2009 World Bank report on Africa's aviation infrastructure, while the continent is fairly well served by airports, lack of taxi-ways and terminal facilities and "inadequate" air traffic control systems are limiting capacity growth.

Safety is another concern. Last year, Africa had the worst record of any region, according to Iata statistics. While most problems relate to aircraft operated by local airlines, several reports have blamed Africa's weak regulatory oversight, which raises wider issues.

In response, airlines have worked closely with government authorities and spent time and money to upgrade local infrastructure for their new services. Continental will help to upgrade the electrical facilities in Lagos airport to receive the Boeing 787.

In spite of those hurdles the airlines remain confident that the efforts will pay off. "The 787 is going to be the pride of our fleet and we are going to put it into Africa. That speaks volumes of our level of interest," says Continental's Mr Hart.

Courtesy of Delta

Delta Air Lines today filed applications with the European Commission and the U.S. Department of Transportation to operate daily year-round service between London’s Heathrow Airport and Miami International Airport.
If approved, service would begin from Miami on March 27, 2011. Delta, the second-largest carrier at Miami’s airport, would be using Boeing 767-300 aircraft.
Here’s the proposed summer 2001 schedule: Flight number 260 departs Miami at 5:30 p.m. and arrives at Heathrow at 7:30 a.m. (the next day). Flight number 261 departs Heathrow at 10:20 a.m. and arrives in Miami at 3:25 p.m.
The new Delta service would complement existing trans-Atlantic service offered by the SkyTeam alliance from Miami, including year-round flights to Paris operated by Air France and Rome operated by Alitalia.
Delta Air Lines today filed applications with the European Commission and the U.S. Department of Transportation to operate daily year-round service between London’s Heathrow Airport and Miami International Airport.

My sister was flying last week and her airline oversold one flight and she had to wait for the next round trip. She said two other had the same problem. With demand rising I hear more planes are coming out of the desert. I also hope delta get miami. Miami needs more flights to Europe because AA hasnt done a good job with flights to europe.

Mexicana Airlines (Grupo Mexicana) suspends its operations indefinitely

A Mexican consortium called Tenedora K announced it has acquired 95% of troubled Mexicana Airlines' holding company and will take over the airline as well as subsidiaries MexicanaClick and MexicanaLink. The carrier's pilots will own the remaining 5% of the holding company, Nuevo Grupo Aeronautico.
Now one of the first actions been taken is to suspend the operations indefinitly.

http://www.mexicana.com/cs/Satellite?pagename=MexicanaG5_US_EN/Page/RedirectSiteAlterno_US_EN

IATA CEO: International Consolidation Essential For Airlines
25 August 2010

SYDNEY - (Dow Jones)- International consolidation of airlines is essential for the industry to move forward, said the chief executive of the International Air Transport Association in an interview Wednesday.

While regional consolidation in the United States and Europe has helped profitability amongst airlines, IATA Chief Executive Giovanni Bisignani said airlines must now consolidate across regions.

"We need transatlantic consolidation to become a more integrated and global industry," said Bisignani, shortly after speaking at a luncheon in Sydney.

Earlier in the day, IATA, which represents some 230 airlines world-wide, comprising 93% of scheduled international air traffic, reported that international passenger demand in July was 9.2% higher from a year ago, although it said the airline sector recovery has entered a slower phase.

Concerning the slowdown, however, Bisignani noted the Asia-Pacific region has now taken over as the world's foremost region. Asia-Pacific outperformed other regions strongly in July, especially Europe, which remained in the red for the latest month.

More broadly, Bisignani said "the worst is over" for the airline industry following the global financial crisis. While he cited concern about a recent slowdown in the U.S. economy, he was optimistic given continuing strength in freight airline travel.

Mexicana

Among the factors which have contributed Mexicana´s stoppage of flights are:

1. Grupo Mexicana’s fragile financial situation, which has deteriorated further over the last four weeks due to the previous management’s decision to suspend ticket sales, forcing the company to continue operating in the interests of passengers without receiving any revenue.
2. No substantial agreements were reached to give companies in the Group long-term viability.
3. Lack of effectiveness in the insolvency (Concurso Mercantil) process intended to protect additional financial resources available to the company so it could to continue operating.
4. Given the uncertainty of the situation, certain suppliers have begun demanding advanced payment of services that are essential to the airlines’ operations.

http://mexicanainforma.com/cma-informs/

http://homepage.mac.com/helipilot/PPRUNETWO/MexicanaFB.jpg

Air cargo demand to slow from post-recession surge

GENEVA, Sept 6 (Reuters) - Demand for air freight, a leading indicator for the strength of world trade, is set to slow in the rest of 2010 and through 2011, the International Air Transport Association said on Monday.

In a snapshot of the cargo industry, IATA said air freight markets were starting to cool off after a rapid post-recession rebound, with purchasing managers less optimistic and planning to ship fewer goods by air.

"All key indicators for air freight demand are now pointing to slower demand growth in the rest of this year and 2011," the Geneva-based industry group said. "The surge in air freight in Asia and South America is now slowing."

Sea freight is the main competition to air freight, a faster and more expensive way to ship goods.

The need for speedy deliveries when the global economy began to rebound boosted air freight in 2009 and early 2010, according to IATA, whose members include British Airways , United Airlines and Cathay Pacific and freight specialists such as FedEx and UPS Airlines .

"That process appears to be coming to an end," it said of the surge in demand, forecasting growth of air freight would slow to 6-7 percent in annualised terms later this year and in 2011.

Many high-tech products such as laptops are increasingly being shipped by ocean not air, but semi-conductors are still being flown to their final destination, the IATA report said.

Business airfares rise, helping airlines - IATA
15 September 2010

GENEVA, Sept 15 (Reuters) - Airline balance sheets have improved this year in part because of a sharp increase in business class fares, an industry group said on Wednesday.

The International Air Transport Association (IATA) estimated that average ticket costs for business class flights have risen 8 percent in the first half of 2010.

Business travellers make up 8 percent of overall passenger numbers but contribute 27 percent of ticket revenue, IATA said in its latest snapshot of the airline business.

"This market segment is key to profitability," the Geneva-based group said. "Year-on-year premium revenues have been improving during the first half of the year."

The airline industry is highly cyclical and revenues plunged in the 2008/09 economic downturn, during which many executives avoided business travel.

IATA said the number of passengers seated in premium class remained 8 percent below the pre-recession peak, though economy travel is now 3 percent above its pre-recession level.

"Most of the economy passengers are travelling for personal purposes, but growth in this travel class continues to be driven by business travellers sitting on economy seats rather than holidaymakers," it said.

Russian airline S7 be part of Oneworld Alliance from Monday, 15 November

... S7 carried 5.6 million passengers in 2009, with a bigger share of the domestic Russian air travel market than any other airline. Including its international network, it is Russia's second biggest carrier. ...

http://de.oneworld.com/ende/ow/news/details?objectID=22993

Air traffic growth slows in August -IATA

GENEVA/ZURICH, Sept 28 (Reuters) - Growth in air traffic slowed noticeably in August as this year's rebound from the economic downturn lost steam, the International Air Transport Association said on Tuesday.

Passenger traffic in August was 6.4 percent higher than a year earlier, against a 9.5 percent year-on-year increase in July, and freight traffic was 19.6 percent higher in August, down from a 23.0 percent increase in July, IATA said in its monthly traffic report.

"The rapid improvements in demand that we saw earlier this year are behind us. The slowdown of demand (growth) in August is consistent with our forecast for a tougher end to 2010 as government stimulus monies run out without having generated significant improvements in employment," said IATA Director General and CEO Giovanni Bisignani.

Slower demand growth in the second half of 2010 was expected to continue into next year, IATA said, adding that yields were not expected to grow because capacity was increasing faster than demand.

"The bounce from restocking is over. We do not yet see the strong consumer confidence needed to sustain the expansion with spending," Bisignani added.

In August, global passenger traffic was 2 percent above pre-recession levels of early 2008, while international cargo traffic was 3 percent higher, said IATA, which represents some 230 airlines accounting for 93 percent of scheduled international air traffic.

Domestic traffic is not included in IATA's statistics.

Air travel recovery slowing - IATA

GENEVA, Oct 14 (Reuters) - The strong recovery in air travel is slowing as the force of the economic upswing moderates, with growth in business travel continuing to outpace that in economy class, airline industry association IATA said on Thursday.

Besides pointing to the health of the airline industry the premium figures are a leading indicator of business activity.

Slower year-on-year growth in August than in recent months was partly due to the statistical effect of a big increase in August last year as a the post-recession rebound took hold, the International Air Transport Association said in its monthly premium traffic monitor.

But there was a fall of 1 to 1.5 percent between July and August in the seasonally adjusted number of passengers travelling in both premium and economy seats, it said.

"There are clear signs now that the post-recession rebound of international air travel is slowing," it said.

The number of passengers travelling in business or first class in August was 9.1 percent higher than a year earlier, against a 13.8 percent year-on-year rise in July.

Numbers at the back of the plane were up 6.2 percent, against 8.8 percent in July.

IATA, whose 230 members include Lufthansa, Air Canada and Singapore Airlines, said demand for premium travel had now risen 17 percent above its 2009 low but 99 percent of that rebound occurred by the end of the first quarter of this year.

In the five months since then the number of passengers travelling on premium seats -- typically for business -- had levelled off but whether this was a temporary pause remained to be seen.

Business confidence is slipping but remains positive and premium markets are still 11 percent below their early 2008 peak, it said.

Economy travel, driven by leisure markets and consumer confidence, has risen 11 percent from its 2009 low and passenger numbers in this segment are now above pre-crisis highs.

IATA said the near stagnation in month-on-month growth rates in recent months was not consistent with business travel leading indicators which though slipping should support trend growth of 5-6 percent a year.

IATA head confirms 2010 airline industry outlook

FRANKFURT, Nov 2 (Reuters) - Airlines body IATA does not expect airline industry profits to suffer a setback after two U.S.-bound bombs sent were intercepted in air cargo, IATA's head said on Tuesday.

"We are still forecasting a positive result of $8.9 billion this year," Giovanni Bisignani told Reuters Insider at an aviation security conference.

Two packages containing bombs -- both sent from Yemen and addressed to synagogues in Chicago -- were intercepted in Britain and Dubai on Friday.

One of the packages was found on a United Parcel Service cargo plane at East Midlands Airport in Britain. The other was discovered in a computer printer cartridge in a parcel at a FedEx facility in Dubai.

Bisignani at the conference warned against any hasty steps to implement new security measures and said governments need to collect all relevant facts first.

Responsibility for aviation security lies not only with airlines but also with other companies involved in the supply chain, such as freight forwarders, he said.

He called for cooperation between governments and all members of the supply chain to improve security.

Business air travel rebounded in September - IATA

GENEVA, Nov 16 (Reuters) - Business air travel rebounded further in September, rising 12.1 percent from a year earlier, but remained below pre-recession levels, the International Air Transport Association said.

The latest figures were buoyed by premium traffic to and from Asia and the Middle East, while trans-Atlantic markets were relatively weak, IATA said on Tuesday.

"Business travel continues to be the key to overall international travel markets, with business confidence moving higher in major economies but consumer confidence weakening," IATA said in its monthly premium traffic monitor.

September's 12.1 percent annual increase in travellers in first or business class, compared with a 6.2 percent rise in August.

Growth in premium travel continues to outstrip the increase in numbers at the back of the plane, with economy class seats rising 9.3 percent in September. However, these are now above pre-recession levels.

IATA said the rate of year-on-year increase in premium travel will slow in coming months because of sharp gains a year ago, but the extent of the slowdown in the fourth quarter now looked less than feared.

IATA has 230 members and its data on international flights are an indicator of trade and the overall state of the economy, as well as a pointer to airline profitability.

Air freight grows 14.4 pct yr/yr in October - IATA
25 November 2010

GENEVA, Nov 25 (Reuters) - International air cargo traffic picked up in October after falling since May to stand 14.4 percent higher than a year earlier, the airline industry body IATA said on Thursday.

October's year-on-year increase in air freight -- an important indicator of trade and economic recovery -- was below September's 15.5 percent rise but the monthly rise followed a 5 percent fall since May, the International Air Transport Association said in its monthly analysis of air traffic.

"Freight appears to be at a turning point," IATA said.

"But a single month does not make a trend. And it remains to be seen if this is the stabilisation in freight volumes or the start of an upward trend," its director-general, Giovanni Bisignani, added in a statement.

Freight traffic, which accounts for 35 percent of the value of goods traded internationally, is now 1 percent above pre-crisis levels of early 2008, IATA said.

Passenger demand -- a reflection of business and consumer confidence -- was 10.1 percent higher in October than a year earlier, slightly below September's 10.7 percent rise, and is now 5 percent above pre-crisis levels.

IATA said airlines were reacting to this year's rebound in demand with cautious increases in capacity.

In the first 10 months of this year an 8.5 percent increase in passenger demand was matched by a 4.0 percent increase in capacity, while a 24 percent increase in freight demand led to only a 9.2 percent rise in cargo capacity.

Airlines are planning a further 7.5 percent increase in passenger capacity for the half-year scheduling period beginning at the end of October, said IATA, which represents 230 airlines including Aeroflot, Air China and Lan Airlines.

Passenger growth in October was strongest among Middle Eastern airlines and weakest in Latin America.

Airlines eye booming Asia market ; Profitable region lures new routes, amenities
20 December 2010
USA Today

HONG KONG -- As Asian economies boom, U.S. carriers are courting long-haul travelers with more frequent service, cushier seats and amenities.

In February, Delta Air Lines will begin flying between the U.S. and Tokyo's Haneda airport, three months after Hawaiian Airlines became the first U.S. carrier to do so. Delta also plans to resume Atlanta-Shanghai service after suspending it last year, and expand flights between China and Japan. American Airlines is launching flights between New York and Haneda next month, and between Los Angeles and Shanghai in April.

The expansion comes as domestic travel begins to recover, but not as quickly as travel in Asia-Pacific. The region already passed North America last year as the largest aviation market in the world. It remains the "most profitable region of the world for airlines" because of its strong economic growth, according to the International Air Transport Association, which represents 230 carriers.

While American Airlines' presence in Europe and the U.S. has historically been stronger than in Asia, the region "is an area that we are very focused on," says Kurt Stache, vice president, international, for American Airlines. "We think it has real long- term opportunities."

Between the third quarters of 2010 and 2011, U.S. carriers will boost available seats per week to Asian destinations by 14%, the Air Transport Association of America estimates from Innovata data. This compares with only a 2.6% increase in seating capacity -- albeit on a much larger base -- to non-Asian destinations.

U.S. carriers are also strengthening partnerships with other airlines to serve Asia's "rapidly expanding middle class and (their) growing demand for air travel," says Nathan Smith, an aerospace analyst at researchers Frost & Sullivan.

Yet, expanded service alone isn't going to attract the most discriminating travelers. That's why U.S. airlines are beefing up their in-flight amenities, an area where they've traditionally lagged behind their Asian counterparts.

Continental has installed flat-bed seats in BusinessFirst cabins on its Boeing 777 planes, and plans to do so for its 757s and 767s. Meanwhile, Delta expects to have flat-bed seats with aisle access on a third of its wide-body aircraft by this summer.

European airlines seen set for take-off in 2011
By Joanne Frearson and Brian Gorman

LONDON, Dec 24 (Reuters) - Investors have started to buy back into European airlines in anticipation of a period of top-line growth, as business travel picks up and with more of the gains seen going to the bottom line.

More profitable business travel is rising again, as economies emerge from recession, after a period when companies were cutting back on spending.

"It's really about the premium business traffic. It's linked to the strength of the corporate sector, and the pick-up in world trade growth, which is continuing," said Richard Batty, strategist at Standard Life Investments in Edinburgh.

Air France-KLM , for example, is set to see revenue rise to 27.2 billion euros for the year to March 2012, up 11 percent on the year to March 2010, according to Credit Suisse estimates, largely driven by a rise in premium traffic. Analysts say airlines' costs will not rise as much as turnover because revenue per unit of traffic tends to be higher for business travel, even with budget airlines.

Overall passenger traffic for most airlines in recent months is up on a year ago, reversing a trend earlier in the year, according to the airlines' own figures, and on average more seats are being filled, thereby boosting operating margins, analysts say.

The International Air Transport Association (IATA) said earlier this month that the number of passengers travelling in premium seats -- first and business class -- was 10.9 percent higher in October than a year earlier.

It also said the world's airlines will return to profit this year and next at higher levels than previously expected, due to an upturn in the market and better capacity usage.

"The airlines did a good job on restructuring (through the downturn)", said Stephen Furlong, analyst at Davy Research, who has an "outperform" rating on the sector.

STOCK PICKS

Amongst individual stock picks British Airways is still seen as having potential for further price gains next year despite the shares having gained 25 percent in the past six months, according to some analysts.

"We favour British Airways ," said Richard Batty at Standard Life.

Perceptions of the company have changed dramatically since it posted a record loss of 541 million pounds for the year to March 2010, hurt by the recession and industrial disputes.

The impact of cabin crew strikes has not been as severe as some had feared, say analysts, who also see benefits coming from the forthcoming merger with Iberia , which will create International Airlines Group, and a newly-approved transatlantic alliance with AMR Corp's American Airlines.

The Iberia merger alone is expected to yield about 400 million euros of synergies and analysts predict combined revenue will grow to around $22 billion in 2012 from about $18 billion in 2010.

The pick-up in the market, especially for premium traffic, means that analysts are now forecasting BA will return to making a profit, in the current year to March 2011, and with the combined IAG making a profit of about 1.2 billion euros in the the following year, according to Credit Suisse, when its forecast price-earnings ratio falls to about 8.

This compares with a foreast earnings multiple of 10.7 in 2012 for the STOXX 600 European Travel & Leisure index <0#.SXTP>, according to Thomson Reuters Datastream.

AIR FRANCE/LUFTHANSA

Analysts also see Air France-KLM and Deutsche Lufthansa continuing to outperform the broader European share market.

Air France is likely to follow a similar pattern to BA, albeit with a slightly delayed recovery. It may struggle to break even in 2011, but is expected to bounce back in 2012, putting its price/earnings ratio back into single digits.

Credit Suisse recently upgraded both Air France and Lufthansa to "outperform", with BA/Iberia its top pick in the sector, already on that rating.

"Earnings recovery should remain a key theme for all flag carriers in 2011," Credit Suisse said in a note, forecasting further growth in premium demand.

Even budget airline easyJet is expected to benefit from a pick-up in business travel with revenue set to rise 20 pct over the next two years and earnings per share to double.

EasyJet's forecast price/earnings multiple falls from 9.6 for 2011 to 8.2 for 2012, according to Datastream.

Rival budget airline Ryanair is also another stock liked by Standard Life's Batty. A recent decision to return 500 million euros in cash to shareholders instead of buying more planes was applauded by some analysts, despite the implications for growth prospects in the longer term, and the carrier is seen continuing in its relentless drive to further cut costs.

However its price/earnings multiple is already one of the highest in the sector, at 10.7 for 2012, according to Datastream.

OVER A BARREL

Airlines still face challenges, not least with fuel prices which account for between 25 and 40 percent of a carrier's total costs and with oil prices hitting $90 a barrel in recent days the ratio has been at the upper end of the range.

But while recent forecasts suggest oil prices may go higher analysts say if this is linked to economic growth, rises in fares and traffic will more than compensate and any surprise moves in the oil price are being managed by airlines hedging their requirements.

"If the oil price is higher that will be reflected in the fares as well," said Gert Zonneveld, analyst at Panmure Gordon. The impact of the cold weather in recent days is also seen as a short-term, "one-off event" and should not affect investment ratings, said Tony Shepard, analyst at Charles Stanley. Analyst have compared the disruption to that caused by the volcanic ash cloud earlier this year, which hit market sentiment in the short term, but had no lasting impact.

Which leaves the outlook for economic recovery as the most important factor in determining whether airline stocks will continue to outperform the overall market.

"Airlines have had better than expected growth levels and this is clearly a positive," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

"If the market remains in risk mood then airlines should do reasonably well ... They are high beta stocks and are geared towards economic growth." ($1=.7605 euros) ($1=.6456 pounds)

Int. air traffic slows, points to easing recovery

ZURICH, Dec 30 (Reuters) - International air traffic slowed in November, the airline industry body IATA said on Thursday, in a sign that the global economic recovery is losing speed.

The International Air Transport Association said harsh weather conditions in many countries in December were weighing on business.

"The year-end holiday season has been tough for travellers and for airlines," IATA director-general, Giovanni Bisignani, said in a statement. "Airlines saw lost revenues and saw costs rise."

Bisignani repeated IATA's recent profit forecast for the industry, saying a strong end to 2010 overall should lift profits to $15.1 billion. Slowing traffic growth was in line with projections for a reduced profit of $9.1 billion in 2011.

"The industry is shifting gears in the recovery cycle," Bisignani said.

"Growth is slowing towards normal historical levels in the 5-6 percent range. Relative weakness in developed markets is being offset by the momentum of economic expansion in developing markets," he added.

The air traffic numbers are in line with other signs that the global recovery from economic crisis is losing speed. The International Monetary Fund expects 4.2 percent global growth next year, which would be a step down from 2010 but well above the recession-hit rates of the previous two years.

Air freight -- an important indicator of trade and economic recovery -- grew by 5.4 percent in November from a year ago, well below the 14.5 percent rise recorded in October.

Freight traffic, which accounts for 35 percent of the value of goods traded internationally, is now at the pre-crisis levels of early 2008, said IATA, which represents 230 airlines including Aeroflot , Air China , Lan Airlines and Lufthansa.

Passenger demand -- a reflection of business and consumer confidence -- was 8.2 percent higher in November than a year earlier, below October's 10 percent rise, and is now 4 percent above pre-crisis levels.

Air traffic growth slowed significantly in all regions with the exception of Africa, IATA said. Freight levels remained well below their pre-crisis levels in North America and Europe.

Growth in airline premium travel slows in November

GENEVA, Jan 17 (Reuters) - The increase in the number of people flying first and business class on international flights slowed in November, but the airline industry body IATA said the upward trend in air travel remained intact.

The year-on-year growth rate for premium travel was 9.6 percent in November, compared to 11.0 percent in October, the International Air Transport Association (IATA) said, noting that November 2009 was a particularly strong month.

At the back of the plane, growth in demand for economy tickets also slowed to 7.0 percent in November from 7.6 percent in October, it said in its monthly premium monitor.

"Business travel continues to be the key driver for both seat classes and recent improvements in business confidence are a positive lead indicator for air travel in the next few months," said IATA, whose members include Singapore Airlines , British Airways and Lufthansa .

Premium traffic -- the most profitable part of airlines' passenger business -- remained 12 percent below pre-crisis levels in November on a seasonally adjusted basis.

But this appears to have more to do with the lack of a full recovery in business travel drivers such as world trade and equity markets rather than a further shift to economy seats, IATA said.

IATA, whose 230 member airlines cover 93 percent of scheduled international traffic, said last month airlines would return to profit in 2010 and this year at higher levels than previously expected.

The IATA data on business travel follows news that Airbus [ARBU.UL] overtook Boeing in the annual orders race in 2010 after a last-minute airline buying spree highlighted a recovery in emerging markets and the low-fare sector.

Airline association IATA expects 3.3 billion air travelers by 2014, up 32 percent from 2009
14 February 2011

(AP) - Global airline travel will likely jump to 3.3 billion passengers by 2014 as Asia's fast economic growth drives the industry's expansion, the International Air Transport Association said Monday.

Asia will likely account for 45 percent of the 800 million increase in air travelers between 2009 and 2014, IATA Chief Executive Giovanni Bisignani said at a news conference. China will be the fastest growing market for international passengers, followed by the United Arab Emirates, Vietnam and Malaysia, Bisignani said.

Asian carriers should earn about $4.6 billion this year compared with just $100 million of profit for their European competitors, reflecting the gap between the economic growth rates of the two regions, Bisignani said.

"Look at one number, GDP" he said. "When you see Singapore ... and China have double digit growth and in Europe we're struggling between 1 and 2 percent, that's how the industry is going."

The association expects gross domestic product in the Asia Pacific area to grow 6.6 percent this year, Europe to expand 1 percent and the U.S. to grow 1.5 percent.

Asia overtook North America as the largest aviation market in 2009 and will account for 30 percent of air traffic by 2014, while North America will slip to 23 percent.

Bisignani reiterated that the global airline industry will likely earn $9.1 billion this year, down from $15.1 billion last year as higher fuel costs eat into profits.

Fuel oil accounts for about 27 percent of an airline's costs and the industry will likely spend $156 billion on fuel this year from $139 billion last year, he said. The Geneva-based IATA expects Brent crude to average $84 a barrel this year, and every $1 above that will increase the industry's costs by $1.6 billion.

"Higher oil prices could spoil our party," Bisignani said.

FAA says US airlines will carry 1 billion passengers by 2021, faster than it had forecast
15 February 2011

Federal officials are predicting a 3.5 percent increase in the number of passengers traveling on U.S. airlines this year.

They also say U.S. airlines will carry 1 billion passengers a year by 2021, two years faster than previously forecast.

The Federal Aviation Administration released its annual travel forecast on Tuesday, a report that covers the next 20 years.

The agency says the growth in travel will increase the need for changes including a new satellite-based air traffic control system to replace the current radar-based technology.

Jan air traffic picks up, high oil prices loom - IATA

ZURICH, Feb 28 (Reuters) - International air freight and passenger traffic picked up in January but rising oil prices caused by political unrest in the Middle East could make 2011 a challenging year, airline body IATA said on Monday.

"We are all watching closely as events unfold in the Middle East. The region's instability has sent oil prices skyrocketing," IATA's Director General and Chief Executive Giovanni Bisignani said in a statement.

Violent uprisings in OPEC member Libya reduced oil exports from North Africa, sending Brent futures for April and U.S. crude to two-and-a-half year highs last week. Markets' concern is that unrest will continue to spread and potentially curtail exports from other key producers.

Bisignani said each dollar increase in the oil price meant the airline industry had to recover $1.6 billion in additional costs. "Even with good news on traffic, 2011 is starting out as a very challenging year for airlines," he said.

Air freight -- an important measure of world trade -- was 9.1 percent higher in January compared with a year earlier after rising 7.3 percent in December, IATA said.

Passenger traffic rose 8.2 percent compared with a year earlier, up from a 5.4 percent rise in December when severe weather made many passengers cancel their trips.

Higher taxes in the UK, Austria and Germany were also making life difficult for airlines, Bisignani said.

IATA, whose 230 members include Lufthansa and Singapore Airlines , has forecast that airlines will make a cumulative profit $9.1 billion this year and will revise this forecast on March 2.

IATA sees global airline profit halving in 2011

GENEVA, March 2 (Reuters) - Global airline net profits will halve this year as rising costs, especially oil prices, offset increasing demand, the industry body IATA said on Wednesday.

The result would be a net profit margin this year of only 1.4 percent -- dismissed by IATA Director-General Giovanni Bisignani as more worthy of a charity than an industry -- down from 2.9 percent in 2010.

Bisignani told a news conference that increased taxes such as levies on ticket prices were another threat to the struggling industry, which he said was not sustainable in the long term, and called on governments to review regulations to underpin airline profitability.

"We are constantly walking on a tightrope with very thin margins, and there is no buffer," he said. "This industry is very, very fragile."

The International Air Transport Association, whose 230 members include Singapore Airlines and Deutsche Lufthansa, now expects global net profit to be $8.6 billion this year, down from $9.1 billion forecast in December.

Net profit is estimated at $16 billion in 2010, revised up from the $15.1 billion estimate in December.

Those profits come on revenues forecast at $594 billion this year, up from an estimated $552 billion in 2010. Revenues stand against industry debts of $210 billion, Bisignani noted.

IATA's forecasts assume an average oil price of $96 per barrel for Brent crude this year, up from $84 forecast in December, and $$79.4 a barrel in 2010.

As a result the industry's fuel bill will rise to $166 billion this year -- 29 percent of total costs -- from $139 billion or 26 percent in 2010.

Bisignani said every $1 increase in the price of a barrel of oil adds $1.6 billion in costs to airlines, which are estimated to have hedged 50 percent of their fuel purchases this year.

IATA declined to speculate whether the latest oil price increases would lead to fuel surcharges on tickets, as that is a matter for its individual members.

The improving global economy will increase demand for airline products, with passenger growth expected to be 5.6 percent this year, up from December's 5.2 percent increase, while cargo demand -- an important indicator of world trade -- is seen rising 6.1 percent, up from 5.5 percent in December.

The IATA global forecast includes wide variation in airline performance by region, with carriers in the Asia-Pacific region expected to produce a net profit margin of 4.6 percent. Airlines in the region benefit from the strong economy, but have hedged fuel prices relatively loss than those in other countries.

European airlines are the least profitable of the major regions.

IATA: Feb Scheduled Intl Passengers Up 6.0%
29 March 2011

LONDON (Dow Jones)--The International Air Transport Association, or IATA, said Tuesday scheduled international passenger traffic for February rose 6% and cargo demand rose 2.3%, a significant fall from January's revised figures reflecting the political unrest in the Middle East and North Africa and factory shutdowns due to the Chinese New Year period.

MAIN FACTS:

-Unrest in the Middle East and North Africa during February is estimated to have cut international traffic by about 1%.

-Fall in cargo growth (from 8.7% in January to 2.3% in February) was impacted in part by factory shutdowns due to the Chinese New Year period, which fell in the first part of February in 2011.

-February passenger load factors stood at 73%; freight load factors have deteriorated even faster to 51.6%.

-By February 2011, air travel volumes were 16% higher compared to the low point reached in early 2009 and some 5% above the pre-recession peak of early 2008.

-Europe's carriers recorded 7.4% growth compared to February 2010 against a 9.8% increase in capacity.

-North American airlines reported 6.7% year-on-year growth for February and a capacity expansion of 11.9%.

-Asia-Pacific airlines reported a major slowdown to 3.0% growth, half of the 6.3% recorded for January.

-Middle East airlines saw demand growth fall from 12% in January to 8.4% in February.

-Africa saw traffic fall by 1.3% compared to February 2010.

-Latin American airlines were least exposed to volatility in February; passenger demand increased by 11.8%.

-Based on an average oil price of $96 per barrel, IATA is forecasting fuel to account for 29% of average operating costs with a total fuel bill of $166 billion.

-For every dollar increase in the price of a barrel of oil, the industry must recover an additional $1.6 billion in added costs.

BBC Fast Track : What will airports of the future look like?

http://news.bbc.co.uk/2/hi/programmes/fast_track/9443769.stm

US Airline Summer Traffic Seen Just Shy Of 2007 Record - ATA
16 May 2011
Dow Jones News Service

Record numbers of U.S. airline passengers are expected on international routes over the summer peak season ahead of an expected post-Labor Day slowdown that has seen carriers pare planned expansion, according to a survey published Monday.

The Air Transport Association of America forecast total passenger numbers will rise 1.5% to 206 million over the summer, shy of the all-time record in 2007 but a sign that fuel-driven fare increases haven't depressed demand.

John Heimlich, the trade group's chief economist, said there were no signs of demand destruction despite higher fares, with gains on international routes led by flights to Latin America and Asia, excluding Japan.

Demand and pricing on transatlantic routes remains "soft," he told reporters, echoing comments by airline executives, notably at Delta Air Lines Inc. (DAL).

Delta, the largest carrier by capacity on transatlantic routes, has trimmed expansion plans and has been one of the most aggressive capacity cutters. Chief Executive Richard Anderson said on an employee call earlier this month that the carrier would cut capacity by "at least" 4% compared with last year in its post-Labor Day schedule.

Heimlich said U.S. airlines are now more competitive with overseas rivals on international routes, though cautioned that regulatory challenges hamper further improvements.

Airlines gain from slow but steady global recovery - IATA

June 2 (Reuters) - The International Air Transport Association (IATA) said on Thursday the global economy was recovering more slowly than expected, but was inching upward based on air traffic data, a key barometer of growth.

High oil prices, the crisis in the Middle East and Japan's earthquake and tsunami dented growth, but the global economy appeared to be slowly overcoming the effects, said Giovanni Bisignani, director general and CEO of the global air industry body.

"From the numbers, the recovery is moving," he told a news conference in Singapore.

"It is moving slower than expected because the recovery this year has been affected by many, many different situations (such as) the situation in the Middle East and the situation with the oil price.

"What got spoilt in the situation is the price of fuel, because the record (average) price of $110 per barrel is not just affecting the profitability of aviation, but it's affecting the profitability of the entire system."

According to the latest IATA figures, passenger traffic in April grew 11.9 percent year-on-year while freight traffic grow 3.3 percent. But these numbers were distorted because April 2010 was hit by severe air traffic disruptions following the volcanic ash eruption in Iceland.

Air freight, which accounts for about one-third of global trade by value, was down 6 percent from a post-recession peak in May last year.

"The speed-up of last year was because you have to build the inventories," Bisignani said. "Once you have rebuilt your inventories, you have to sell your stuff. Now we have slowed down because of that reason."

The airline industry itself will remain profitable, but IATA plans to revise its estimates from the latest forecast of $8.6 billion and will likely lower that estimate.

"Since (the last forecast), much has happened to make us less optimistic," Bisignani said.

"Eliminating all distortions, (passenger traffic) is growing at 3-4 percent. Unfortunately, two things are spoiling the party, demand shocks and high jet fuel prices."

The IATA has 230 member airlines and will hold its annual general meeting in Singapore next week and will announce its latest forecasts at that time.

When the group made the industry-wide profit forecast of $8.6 billion in March, it assumed an average oil price of $96 per barrel for Brent crude , but the year-to-date average of the oil price now has reached $110 per barrel.

Load factors, or the amount freight or passenger capacity is used, are key to airline profitability. In April, the overall passenger load factor was 77.4 percent, but the freight load factor was only 46.5 percent.

"Maintaining the high load factors needed to support profitable growth will be difficult given the ongoing challenge of matching capacity to volatile demand," Bisignani said.

Disrupted supply chains after the Japan earthquake and tsunami disaster, slower growth in China and political unrest in Africa contributed to the slow take-up of freight space, IATA said.

Bisignani said airlines had built up freight capacity last year believing a strong recovery was imminent.

"That was slowed down because of the cost of fuel, the Middle East, and all those kind of things. And it takes some time to adjust capacity to the new reality," he said.