Airline industry taxies forward

Growth in global air travel is slowly moving the world's aviation business towards profit, with latest traffic figures showing a promising start to 2006 for the world's airlines.

The International Air Transport Association has published figures showing a 6.8 per cent growth in international passenger traffic for February and a 5.4 per cent growth in freight.

Passenger traffic this year to date has grown 6.4 per cent, which is in line with projections that the global aviation business will grow 6.5 per cent this year.

Airlines in the Asia-Pacific region had a 7.3 per cent rise in passenger traffic. The fastest-growing region is the Middle East, where passenger traffic grew 15.3 per cent compared with the same month last year.

Improved economic conditions in continental Europe and Japan have helped push up freight and passenger traffic for airlines.

IATA director-general and chief executive Giovanni Bisignani said the growth in aviation throughout February supported a "new and cautious optimism" returning to the industry.

Compared with its global rivals, Air New Zealand is filling its long-haul services well, with a February load factor of 80.9 per cent. Globally, this ratio of seats filled is just under 74 per cent. For January, a busy tourist month, this ratio was 82.2 per cent for Air NZ.

Air NZ's share price has been enjoying a recovery in the past few months after hitting a low of $1.07 last October. Now trading around $1.35, it is still only back at levels last seen in August 2005. Air NZ's February statistics followed the same trend as those seen overseas, with load factors up and yields increasing by 5.5 per cent.

Group yield is a measure of total passenger revenue divided by the total number of kilometres flown. After adjusting for currency changes, yields for the eight months to February were up across the board, with short-haul services doing particularly well.

Air NZ will be watching closely the decline in value of the kiwi dollar, which began to fall last month. A low dollar makes it more expensive for Air NZ to buy fuel and new aircraft, but should help stimulate tourist travel.