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According to IATA Director General and CEO, Mr Giovanni Bisignani, the air transport industry has lost $42 billion since 2001 and losses of another $4 billion are expected this year. Something is wrong with the industry, he said, pointing out that while Asian passenger traffic is expected to grow at 6.5 per cent and cargo at 8.5 per cent, the actual growth had been less, affecting profitability.

While some of Asia's carriers were among the industry's most profitable ones, the average margin had been two per cent — much less than the 7-8 per cent needed to cover the capital cost. Fast expanding markets of India and China held out the promise of growth but the challenge would be to turn this into profits.

The challenges to the industry, according to him, included the competition from low-cost carriers, the need for judicious capacity management and the avian flu, which currently confined to birds, if transmitted to human beings, would impact the airlines industry seriously.

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