IATA: June air traffic up but warns of rising fuel price

Air passenger traffic rose 4.4 percent in June compared to a year ago, but rising fuel costs hit earnings, industry association IATA said Thursday. "What is clear is that the rising jet fuel price is putting pressure on the bottom line," said Tony Tyler, incoming director general of the International Air Transport Association. "The average price for the second quarter was $133 per barrel which is an increase of $10 over the first quarter," he said in a statement. "Slower economic growth makes these challenges all the more difficult. "It is certainly not the time to burden the industry with increases in other costs, including taxation," added Tyler, the former chief executive of Cathay Pacific. Latin American airlines were the month's star for the second time running, with passenger demand increasing 14.3 percent year-on-year. But it was lower than the 21.3 percent recorded in May due to the disruptions caused by Chile's Puyehe volcano eruption. European carriers reported an 8.9 percent increase compared to June 2010, as travellers took advantage of the weak euro to visit the region. Asian Pacific airlines saw demand rise 3.3 percent, with the effects of March's earthquake and tsunami in Japan knocking an estimated 0.5 percentage points off the region's growth. Passenger demand for the Japanese domestic market continued to suffer from the effects of the disaster, falling 24.6 percent compared to June 2010. IATA held its industry profit forecast of $4 billion for 2011, 78 percent lower than 2010.