International Air Traffic Demand Rose in July on Middle-East, Asia Flights
Aug. 25 (Bloomberg) -- International Air Transport Association Chief Executive Officer Giovanni Bisignani talks about the outlook for the global airline industry. International passenger demand rose 9.2 percent in July from a year earlier and international scheduled freight traffic increased 22.7 percent, according to IATA, which represents 230 airlines carrying 93 percent of international traffic. Bisignani speaks from Sydney with Bloomberg's Susan Li. (Source: Bloomberg)
The International Air Transport Association, which represents 230 airlines, said international passenger and freight traffic rose in July as flights increased in Asia and the Middle East.
Passenger demand rose 9.2 percent from a year earlier while freight gained 23 percent, Montreal-based IATA said in a statement on its website. The pace of passenger growth slowed from a 12 percent increase reported in June.
IATA Chief Executive Officer Giovanni Bisignani maintained his forecast for the industry to earn $2.5 billion in 2010, after two years of losses, should the global recovery continue. Profitability will be driven by growth in Asia and Latin America as European traffic is crimped by a stalling economy.
“Europe is probably the weakest spot because of currency, because of unemployment,” Bisignani told Bloomberg Television in an interview from Sydney today. “We are still convinced that 2010 will be a great year.”
IATA’s members represent about 93 percent of total international traffic, according to its website.
Asia-Pacific carriers increased traffic 11 percent in July and will be the biggest contributor to industry earnings, with profit of $2.2 billion expected to be reported this year, IATA said.
Airlines from Latin America posted growth of 14 percent although boosts in capacity have led to a lower proportion of seats being filled on planes.
Mergers and Acquisitions
Europe had growth of 6.2 percent in July and North American passenger traffic gained 7.9 percent, it said.
Bisignani called on government and regulators to make it easier for airlines to pursue mergers and acquisitions by cutting national restrictions on ownership.
He cited this month’s agreement for Chile’s Lan Airlines SA to acquire Brazil’s Tam SA in an all-stock transaction valued at $3.7 billion. Other airlines to straddle multiple countries include Air France-KLM Group, which has united the French and Dutch carriers since combining in 2004.
“Trans-national brands are serving customers effectively in many parts of the world,” he said in the statement. “But we remain an industry of over a thousand players with only very limited opportunities to consolidate.”
To contact the reporter on this story: Robert Fenner in Melbourne at rfenner@bloomberg.net
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