IATA: Industry expectations improve despite Middle East conflict

IATA: Industry expectations improve despite Middle East conflict    The recent conflict in the Middle East has for the first time in two years resulted in the region’s airlines not landing at the top of either passenger or cargo monthly growth tables, according to the Geneva-based International Air Transport Association.
   IATA reported that international air freight traffic was up 3.7 percent in July, when measured in freight-ton kilometers, with Middle Eastern carriers second in terms of growth with a 15.2 percent year-on-year increase behind African carriers, who posted a 20.6 percent rise. North American carriers saw 4.7 percent growth, followed by Asia Pacific (3.5 percent), Europe (2.2 percent) and Latin America (down 5.4 percent).
   Commenting on the impact to the Middle East airlines, Giovanni Bisignani, IATA’s director general and chief executive officer said, “The slowdown was isolated with little impact even to the region’s dominant carriers.”
   After seven months, Middle Eastern carriers lead the regional growth table with a 18.2 percent year-on-year increase in freight-ton kilometers, compared to an industry-wide 5.3 percent rise. Trailing the Middle East for the year so far is Africa (7.4 percent), North America (6.5 percent), Asia Pacific (5.2 percent), Latin America (2.5 percent), and Europe (2 percent).
   “While we expect to see another isolated dip in August due to the U.K. terror alert, overall, improved efficiency and high load factors will help to mitigate the impact of the high oil prices and bodes well for the bottom line. A disciplined focus on efficiency throughout the value chain is the tool that will return the industry to profitability,” Bisignani said.
   IATA has lowered its forecast for an industry wide annual loss in 2006 of $3 billion to a loss of $1.7 billion.
   “Although traffic growth remains strong, the long-term impact of terrorism and instability in the Middle East is still to be calculated. The improvement is based as much on efficiency as strong revenues, so a U.S.-led economic slowdown is the major threat to profitability. Overall, the industry has never been so lean, mean and well poised to return to profitability,” Bisignani said.