Airlines must look at alternative fuels to boost efficiency: IATA

GENEVA, July 27, 2006 (AFP) – Airlines must adapt to high oil prices and explore changes such as alternative fuels to regain profitability despite a 6.7 percent growth in passenger traffic during the first half of 2006, the top industry association said Thursday. Airlines are still battling for financial prosperity despite growing revenues and better load factors in the first half of the year, the International Air Transport Association (IATA) said in a statement.

“Change is urgent and now is the time. Airline efficiency gains must be matched throughout the value chain. And we must find new ways of doing business,” said IATA Director General Giovanni Bisignani.

“The bottom line is all about oil. Prices continue at near record levels and we expect a fuel bill of 112 billion dollars this year at an average price of 66 dollars per barrel,” he added.

“Increased political instability in the Middle East does not bode well for a price drop any time soon.”

Bisignani said operational changes were improving efficiency. But airlines needed to be able to go further, he insisted.

“The 100 percent conversion to (electronic) e-ticketing by the end of 2007 is a great example.”

“But we now look to the oil industry to move faster at developing alternative