Airline industry is turning the corner, says IATA

The airline industry has turned the corner and travellers are slowly returning to the airlines, according to the International Air Transport Association (IATA).

Preliminary IATA traffic figures for June 2003 show a 11.8% drop in international passenger traffic over June 2002, with Sars-hit Asia Pacific carriers experiencing a 35.8% drop – still the worst performance among all of the regions. These figures, however, show considerable improvement over the 21% and 55% year-on-year drops recorded respectively for May, said the IATA.

For the first half of the year, overall passenger traffic was 7.1% below 2002 levels. North American and Asia Pacific carriers saw traffic drop 11.1% and 15.6%, European traffic for January to June was down 1.1%, South America grew 9.3% and Middle Eastern traffic was up 5% for the same period.

Capacity cuts in Asia Pacific (-27.2%) and North America (-12.5%) on passenger services resulted in a "sharp increase" in the industry-wide load factor to a normal level of 73.7% from the 65% low recorded for May.

"The worst is over, but the road to recovery will be long. Even the most optimistic scenario for a robust traffic recovery will not see yields returning to normal for some time," Giovanni Bisignani, IATA's Director General and CEO, said.

"Controlling costs must become an automatic best practice for airlines and their industry partners. Recovery to where we were in January 2003 or even January 2001 is not sufficient. That will only leave our industry as vulnerable to the next crisis as we have been to SARS, Iraq and the other recent crises.

"The industry needs to evolve to a new cost structure that will allow it to weather these future crises as a matter of course," he added.

(GMcG)