IATA Maps Out the Future of the World Aviation Industry

“Airlines have lost $42 billion since 2001 and we expect another $4 billion in losses again this year. Something is wrong with the air transport industry,” said Giovanni Bisignani, Director General and CEO of the International Air Transport Association at the opening of the Second IATA/Asian Aerospace Aviation Summit.

“While Asian passenger traffic is expected to grow at 6.5 percent and cargo at 8.5 percent each year until 2009, growth is not profitability. Some of Asia´s carriers are among the industry´s most profitable, yet the average margin is 2 percent, far from the 7 to 8 percent needed to cover the cost of capital,” Mr. Bisignani noted.

Mr. Bisignani identified four key areas critical for airlines to bounce back from the current slump: safety, business simplification, e-ticketing, and commercial freedom.

According to Mr. Bisignani, “the agenda for a successful airline industry is not complicated. But it has three dimensions: airlines, partners and governments. If these three dimensions are correct, the chances are better for safer, more secure, environmentally friendly industry that produces a $6 billion profit in 2007 are good.”