International air passenger traffic rose 9.4 percent year-on-year in the first quarter of 2005, but high fuel prices are robbing the industry of profits, the International Air Transport Association said on Thursday.

Average passenger loadings were 73.7 percent of capacity, while freight traffic grew 4.2 percent during the period, the Geneva-based organization said.

Figures were slightly distorted as the quarter included the Easter holiday this year but not in 2004, it said.

But IATA said airlines still remained a "long way from profitability", while fuel -- accounting for 20 percent of operating cost --- was in the range of USD$50 per barrel.

Even at an average of USD$43 per barrel during 2005, the fuel bill for the industry this year will exceed USD$76 billion, up from some USD$63 billion last year, it said.

"However you look at it, 2005 is shaping up to be another difficult year for the airlines," said IATA Director General Giovanni Bisignani. "Fundamental and large-scale change is absolutely critical."

At the start of the year, IATA forecast that its members could make an overall profit of USD$1.2 billion in 2005. But earlier this month Bisignani predicted an industry loss of USD$5.5 billion, blaming it on the high price of fuel.

Last year, airlines posted losses of an estimated USD$4.8 billion, bringing losses to nearly USD$36 billion since 2001.

Intensified cost-cutting and better aircraft utilization are steps in the right direction, IATA said. Electronic ticketing is IATA's top priority to help simplify the industry with the potential to save USD$3 billion a year.

IATA said 26 percent of all tickets were issued electronically and processed through its settlement systems in the first quarter. It said it was on track to meet its target of 40 percent by year-end and stop printing paper tickets by the end of 2007.

The Geneva-based body, whose statistics do not include domestic traffic, has 265 member airlines representing 94 percent of international scheduled air traffic.