IATA chief sounds warning to world airlines

THE airline industry has returned to profit after four years of record losses, but it still makes nowhere near enough to be sustainable, warns the head of the International Air Transport Association (IATA).

Pierre Jeanniot, director general of IATA, said airlines must continue to slash costs and continue 'right-sizing' if they wished to attract enough investment to ensure survival.

'I am pleased and somewhat relieved that the industry has finally made net profits,' he said. 'But there is a continuing need to increase revenue without increasing costs.' Although airlines as a whole have returned to profitability, many individual carriers, particularly in the US and Europe, remain in the red.

The airlines registering the best growth have been in Asia.

'Our industry, from a profit point of view is still bimodal,' Mr Jeanniot said. 'Airlines in Asia are reaching an adequate level of productivity but those elsewhere less so.' He said corporate life was not getting any easier, as it was increasingly difficult to satisfy shareholders, the state, the community, employees, the environment and consumers.

IATA members made a combined net profit of US$1.8 billion in 1994, after four years in which losses totalled $15.6 billion.