Cost control still tops agenda for airlines

Friday, 01 Mar, 2005 0

Airlines carried more passengers in January signalling a continuing global recovery, except in Asia, according to the latest IATA statistics.

Passenger traffic increased 7.9% year-on-year in January according to IATA, with an average load factor of 73.5%.

The region showing least growth was Asia Pacific, where passenger levels were up 2.5% on January 2004, IATA director general and chief executive, Giovanni Bisignani said: “We are off to a great start for 2005 for international traffic.

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

Despite positive passenger numbers, airlines are still stuggling to raise profits due to downward pressure on prices, with US airlines suffering the most according to IATA.

Mr Bisignani said he anticipated passenger growth of 5.9% for 2005.

He added: “The persistent high price of fuel will be difficult to absorb.

While the profitability picture for the industry is increasingly regionalised there is a universal theme for 2005— austerity.

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.”

Commenting on recent EU legislation concerning passenger compensation for delays and denied boarding, Mr Bisignani described the laws as “potentially disastrous developments” and said they “fail both the good law and good sense tests”.

He also warned that further taxes imposed on airlines, an issue currently being debated by EU politicians, could hamper recovery of the airline industry.

Report by Ginny McGrath

Ginny McGrath

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