Turbulence ahead for global aviation industry: IATA chief

Singapore: Global aviation faces a tough future despite making profits last year as it grapples with debt, rising fuel bills and a looming US recession, but Asia could be a bright spot, officials said Monday.
"Tough times will continue... Airlines may be out of intensive care but the industry is still sick," said International Air Transport Association (IATA) chief Giovanni Bisignani.
Airlines earned 5.6 billion dollars in 2007 but that was less than two percent of revenue worth 490 billion dollars, he said in a speech at a conference held as part of the Singapore Airshow starting Tuesday.
"Airlines are in 190 billion dollars of debt. Oil is pushing 100 dollars per barrel, accounting for 30 percent of operating costs or a total bill of 149 billion dollars," he told delegates including ministers and airline chiefs.
The industry's revenue cycle had already peaked in 2006 and the impact of a credit crunch spreading from the ailing US economy was still being calculated, he said.
But Asia's aviation industry could fare better despite the gloom due to the rapidly expanding markets in China and India, Bisignani said, although he warned the region also faced big competition from the Middle East.
Singapore Airlines chief executive Chew Choon Seng said carriers were not immune to a US-led global economic slowdown, but that the city-state's airline should weather the challenge because of its links to China and India.
Global competition for pilots, mechanics and cabin crew was another challenge, IATA's Bisignani said.
"To pilot the 16,000 new aircraft needed by 2020, we need to train 17,000 pilots a year. That is 40,000 more pilots than current capacity," he said.
In Asia, capacity would expand by 8.8 percent, with 427 new aircraft deliveries in 2008 and another 450 in 2009, but demand was expected rise by a slower 6.4 percent.
"This is not a recipe for long-term health," Bisignani said.
18/02/09 AFP

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Categories: Foreign Feb 2008, Singapore Airshow 2008