IATA, the global airline industry body, said today that airlines will lose $3 billion in 2006, just slightly below the outturn for 2005.
"We are starting to see some light at the end of a five year tunnel—some cautious optimism" said Giovanni Bisignani, Director General and CEO of the International Air Transport Association at the opening of the World Air Transport Summit and IATA Annual General Meeting in Paris.
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Bisignani noted tremendous progress in airlines since crisis struck the industry in 2001. "Labour productivity improved 33%. Sales and distribution costs dropped 10% and non-fuel unit costs reduced 13%," said Bisignani.
"Oil remains the wild card. The break-even fuel price increased from US$14 per barrel to US$50 since 2001. But in just one year, the fuel bill ballooned US$21 billion and is expected to top US$112 billion this year," said Bisgnani.
"While the fuel price continues to race ahead of efficiency gains, it is truly amazing that profitability has not deteriorated from last year. Losses for 2006 will be US$3 billion, slightly less than the US$3.2 billion recorded for last year," said Bisignani.
"We must remember that the strong revenue environment—10% annual growth over the last three years—is also fragile. A weaker global economy could change our prospects dramatically. Change is more important than ever," said Bisignani