IATA chief, Giovanni Bisignani, seeks sustainable growth for global

Vancouver: Applauding the growth evident in the global aviation sector, as well as its return to profitability, the International Air Transport Association (IATA) director general, and CEO, Giovanni Bisignani however described the projected total profit of $5bn (Rs4,000 crore) for the entire industry as "peanuts," especially in relation to its size of $470 billion. He, however, urged airlines around the world to try and sustain this profitable growth.

"Profit of $5bn is meagre, especially when what we need is $40bn just to cover the cost of capital. The industry is moving in the right direction, but with a debt of $200bn, the financial hole is rather deep."

"Challenge is to turn peanuts into sustainable profits," Bisignani said in his inaugural address at the IATA annual general meeting where he was also re-elected unanimously as the IATA chief.

At a larger level, Bisignani observed that the industry had changed tremendously over the last five years. He pointed out that labour productivity was up 56%, distribution costs down 13%, non-fuel unit costs had dropped 15% and load factors were at a record high of 76% in 2006.

"Airlines needed an oil price of less than $20 a barrel in 2002 to break even. Today we are profitable at $70 per barrel," said Bisignani.

Bisignani also pointed out that India and China were leading the Asia-Pacific region to become the single largest market in the world.