Airlines must adapt to high oil prices and explore changes such as alternative fuels to regain profitability despite a 6.7 percent growth in passenger traffic during the first half of the year, the top industry association said yesterday.
Airlines are still battling for financial prosperity despite growing revenues and better load factors in the first half of the year, the International Air Transport Association (IATA) said in a statement.
"Change is urgent and now is the time. Airline efficiency gains must be matched throughout the value chain. And we must find new ways of doing business," said IATA director general Giovanni Bisignani.
"The bottom line is all about oil. Prices continue at near-record levels and we expect a fuel bill of US$112 billion this year at an average price of US$66 per barrel," he added. "Increased political instability in the Middle East does not bode well for a price drop any time soon."
Bisignani said that operational changes were improving efficiency. But airlines needed to be able to go further, he insisted.
"The 100 percent conversion to [electronic] e-ticketing by the end of 2007 is a great example," he said. "But we now look to the oil industry to move faster at developing alternative fuels to further improve efficiency and environmental performance."
"The good news is that neither the extraordinary price of oil nor the inching-up of interest rates negatively impacted demand," he added.
Last month, passenger traffic grew by 6.5 percent compared with June last year, to bring average growth over the first six months of the year to 6.7 percent.
Airlines achieved high average load factors of 78.3 percent last month, a measure of the number of passengers carried on each aircraft and their efficiency.
However, IATA is maintaining its forecast of about US$3.0 billion in losses industry-wide at the end of the year.
In the Asia-Pacific region, airlines carried 11.1 million passengers last month, up 5.5 percent from a year earlier, the Association of Asia Pacific Airlines (AAPA) said yesterday.
In the first half of the year, the total number of passengers carried increased 5.1 percent to nearly 65 million, the Kuala Lumpur-based industry group said in a monthly report.
Cargo traffic last month grew 2.9 percent to 4.4 million tonnes and rose 4.7 percent to 25.77 million tonnes in the six-month period, it said.
AAPA is a trade association of 17 international airlines based in the region.
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