Business World

Monday 19 February 2018

Passengers up 10pc as airlines recover

Air traffic is returning to 'normal' but progress depends on global economic recovery, says IATA

The Boeing 787 Dreamliner passenger jet has been again delayed after a recent test flight fire. Photo: Bloomberg News
The Boeing 787 Dreamliner passenger jet has been again delayed after a recent test flight fire. Photo: Bloomberg News

John Mulligan

THE International Air Transport Association (IATA) has said that airline growth is returning to "more normal patterns" but cautioned that the sector remains reliant on the health of the global economy, with Europe "tightening its belt" as the currency crisis continues.

IATA said that air passenger traffic was up 10.1pc year-on-year in October, while air freight volumes were 14.4pc higher year-on-year in the same month.

The association noted that how traffic levels progress from here on is dependant on developments in the global economy.

"The US is spending more to boost its economy. Asia, outside of Japan, is barrelling forward with high-speed growth. Europe is tightening its belt as its currency crisis continues," said IATA director general and chief executive Giovanni Bisignani.

"The picture going forward is anything but clear, but for the time being, the recovery seems to be strengthening."

IATA said that European carriers showed a 9.6pc year-on-year increase in passenger traffic in October, while US airlines were up 12.4pc.

European air passenger traffic is now 4pc higher than it was at pre-recession levels in 2008. Air cargo demand in Europe was 12.1pc higher in October on a like-for-like basis.

"We are ending 2010 in much better shape than we were just 12 months ago," said Mr Bisignani.

"Airlines have turned losses into profit, albeit tiny. Despite the economic uncertainties, people continue to fly. Airlines appear to be managing capacity in the upturn with a good deal of prudence."

Mr Bisignani added that cost control continues to be the main theme for airlines around the world.

He also called on European transport ministers to push for lower air traffic management costs that currently average €771 per flight in Europe.

He said this compares with an average cost of €440 in the United States and puts European airlines at a distinct competitive disadvantage.

Yesterday, airlines that form part of the Aviation Alliance, which includes carriers such as Ryanair and Ethiad, also called for an extension of export credits to all US and European carriers.

Under existing rules, US carriers and some airlines based in Europe countries that manufacture aircraft can't access export credit support.

Howard Millar, Ryanair's chief financial officer and Aviation Alliance spokesman, claimed that removing the 'home country' rule would protect hundreds of thousands of jobs in the airline industry.

Meanwhile, shareholders in Iberia will meet on Monday to vote on the planned merger between the airline and British Airways. It is expected to be accepted.

Irish Independent

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