'This is the fourth consecutive month with freight growth above 5%--the strongest sustained rally for freight traffic in a year. It reflects strong economic prospects in fast developing India and China, a stronger outlook for US economic expansion and improving prospects for Europe,' said Giovanni Bisignani, IATA's Director General and CEO.
Passenger load factors averaged 74.4% during the first quarter and 75.5% for March indicating a close matching of capacity to demand. Middle Eastern carriers led growth during the first quarter with a 17.5% increase in passenger traffic and a 16.6% increase in cargo over 2005 levels.
'Oil remains the wild card for industry profitability,' said Bisignani in a speech at the UK Aviation Club in London. 'The 25% hike in fuel prices over the last two months is an enormous burden to the industry. However, the US$1.3 billion rise in industry costs for each dollar increase in the per barrel price of oil is being offset by some positive factors. The 5.9% first quarter growth is helping. Industry hedging levels are 50%. Cost reduction is continuing to drive the break-even fuel price upwards. And the US domestic yield rose 12.4% in February,' said Bisignani.
In March, IATA forecast an industry loss of US$2.2 billion for 2006 based on an oil price of US$57 per barrel. A revised forecast will be issued on June 5 at the IATA Annual General Meeting and World Air Transport Summit to be held in Paris.