The Hindu Business Line : Global airline industry may report $5-b profit this year

IATA has outlined six priority areas for the industry that includes safety, security, simplifying business, developing infrastructure, liberalisation and protecting the environment.

Vancouver June 5 The international airline industry is projected to report a profit of $5 billion during the current year, the Geneva-based International Air Transport Association (IATA) announced today.

Addressing the 63rd annual general meeting, the IATA Director-General, Mr Giovanni Bisignani, felt that the $5-billion profits were peanuts. "Airlines are a $470-billion industry. A profit of $5 billion is peanuts. We need $40 billion just to cover the cost of capital. The industry is moving in the right direction. But with $200 billion of debt, the financial hole is deep. The challenge is to turn it into sustainable profits," Mr Bisignani said.

The Director-General pointed out that the industry had changed a lot in the past five years with labour productivity registering a growth of 56 per cent, non-fuel unit cost dropping by 15 per cent and seat load factors recording a growth of 76 per cent during 2006 alone. "Currently, the industry is profitable despite oil being at nearly $70 per barrel," Mr Bisignani said.

Meanwhile, IATA has outlined six priority areas for the industry that includes safety, security, simplifying business, developing infrastructure, liberalisation and protecting the environment.

The Director-General was of the opinion that the biggest challenge faced by the industry was how to control greenhouse emissions.

"Our track record has limited airlines' carbon footprint to 2 per cent of the global total. By 2050, the United Nations estimates that it will grow to 3 per cent.

In today's political reality that is not acceptable for any industry. We will not achieve all this overnight."

e-ticketing

IATA has extended the deadline for all airlines to issue electronic tickets by five months to May 31, next year. Earlier, all airlines were expected to issue e-tickets by the end of the year.

However, with several airlines not being able to achieve this target it was decided to extend the deadline.

The Chairman and Managing Director, Air India, Mr V. Thulasidas, said that the airline would be in a position to introduce e-ticketing by the end of the year.

During the AGM, IATA officials listed Indian as one the success stories for the e-ticketing project globally as the airline had successfully completed more than 50 per cent of work involved with issuing this kind of tickets.