‘Airline sector in trouble as number of passengers drops’

August 4th, 2008 - 10:34 pm ICT by IANS  

New Delhi, Aug 4 (IANS) The airline sector is in trouble as the number of passengers falls and rising fuel costs inflict a huge loss on the industry this year, according to an aviation agency. The International Air Transport Association (IATA) said Monday in a statement that the industry so far this year has suffered losses to the tune of $6.1 billion, up from last year’s $5.6 billion.

Releasing the international traffic data for June, the IATA said the cargo demand growth decreased by 0.8 percent compared to June 2007, while the passenger growth fell to 3.8 percent, the lowest level since 2003.

The passenger load factors dropped to 77.6 percent in June 2008, down from 78.8 percent recorded for June 2007.

“This is the slowest growth that we have seen. With consumer and business confidence falling and sky-high oil prices, the situation will get a lot worse,” IATA director general and CEO Giovanni Bisignani said.

The global economic commotion has led to a continuous slowdown, both in cargo and passenger demand growth for the aviation sector, the IATA said.

“Airports and air navigation service providers must come to the table with efficiencies that deliver cost savings. Labour must understand that efficiency is the only path to job security. The governments must stop taxation and give airlines the freedom to merge and consolidate where it makes business sense,” it said.

According to the IATA, Asia Pacific carriers saw their international passenger traffic growth fall to 3.2 percent in June from 4.5 percent in May.

Middle Eastern carriers’ traffic growth was down to 9.6 percent in June from 12.8 percent in May. This is sharply down from the 18.1 percent recorded in June 2007.

International freight traffic growth for the first time saw the decline since May 2005 by 0.8 percent.

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