IATA reports rise in October 2007 traffic

Passenger traffic, as measured by revenue-per-kilometer flown, increased 7.7% in October 2007 compared with the same month last year, according to IATA. Airlines in the Middle East and Latin America reported the biggest gains at 20.9% and 19% respectively.

Through the first 10 months of 2007, passenger traffic rose 7.3% compared with last year, reports the trade group.

International air-freight demand also grew in October 2007, but the 3.6% jump was less than September's 5% growth "and partly reverses the strong pick up of freight growth seen in mid-2007," according to the IATA, which represents more than 240 airlines.

Through October, freight demand is up 4% compared with last year, with gains in the Middle East, Asia/Pacific region and Europe more than offsetting drops in North America, Africa and Latin America.

But air-freight indicators, such as semiconductor shipments and confidence levels in the global manufacturing business, have slowed recently and demand is expected to grow at a slower pace for the rest of the year.

"The numbers show that the fourth quarter will be challenging," IATA Chief Executive Giovanni Bisignani said in a release. "The next months will be critical to see if the impact of the credit crunch spreads from cargo to corporate and leisure travel."

Last week, Bisignani said the credit crunch, while largely contained to the U.S., "throws a shadow over the industry" and that rising fuel costs will hurt profits. In September, IATA forecast profits of USD5.6 billion this year and USD7.8 billion for 2008, but it will release updated figures next week to account for fuel costs and surcharges.

A profit in 2007 would be the industry's first since 2000.

Fuel costs, at 25.4% , accounted for the largest chunk of U.S. airlines' operating expenses in the second quarter of 2007, and are expected to represent about 28 percent of global expenses in 2007, according to domestic and international trade groups.

Oil prices have dropped in recent days but remain near USD90 a barrel. Light, sweet crude for January delivery added 65 cents to USD88.97 in midday trading on the New York Mercantile Exchange.

Date posted:06-Dec-07