Asia-Pacific's carriers continue to post profits

New York: The International Air Transport Association (IATA) yesterday announced that it expects airlines globally to lose US$2.2 billion in 2006 and to post profits of US$7.2 billion in 2007. The quarterly revision is a significant improvement on the previous forecast of a US$4.3 billion loss in 2006 and a profit of US$6.2 billion in 2007.

Giovanni Bisignani, IATA's director General and CEO said, "There is a new cautious optimism emerging in the industry. Improved economic prospects in Europe and Asia combined with an improving situation in the US will lead to reduced losses in 2006 and strengthened profitability in 2007.

While the trend is positive, we are nowhere near sustainability. A profit of US$7.2 billion is only a 3% return on capital invested.

Improved cost efficiency should be at the top of the agenda for everyone in the airline industry. At the same time, governments must get out the way of a hyper-competitive airline industry on commercial issues and take a much closer look at the efficiency of airport monopolies." Bisignani announced the new forecast in a speech delivered at the Wings Club in New York.

Asia-Pacific's carriers will continue to post the largest absolute profits in the industry at US$2 billion.

This is down from the US$2.9 billion posted in 2005. "Low labour costs and strong long-haul markets is their secret," said Bisignani.