Time to cut inefficiencies, pushes IATA

5th Jun 2006

Cutting inefficiencies in the airline industry is the focus at the opening of IATA’s AGM—one of the largest gatherings of decision markers in the sector.  With jet fuel now at $50 a barrel, having risen from $14 in 2001, the industry has had to become a low-cost industry, pointed out Giovanni Bisignani, Director General of IATA.

“Competition has never been stronger (and)...sometimes we have been our own worst enemy chasing growth instead of profitability,” he told delegates.

According to IATA figures, losses for the industry as a whole this year will be $3 billion, lower than in 2005.

“Basic economics show that we cannot sustain these losses continually,” Douglas Steenland, CEO of Northwest Airlines told the conference.

“GDSs, governments and airports continue to treat the industry like an ATM machine.”


Bisignani called for a increase in refinery capacity and more research into alternative fuels, as well as more competitive infrastructure—and that the rising airport costs are “unacceptable to the industry.” 

A U.S.-Europe open skies deal and more direct routes were touted as ways the industry could further reduce inefficiencies.

The annual general meeting of the International Air Transport Association (IATA) is one of the industry’s primary networking events, when new strategies are discussed and where new alliances are brokered.

IATA is holding its AGM in Paris for the first time since 1954, with media attendance from over 50 countries. 

VIDEO: Giovanni Bisignani, Director General of IATA talks about the state of the industry. Watch speech >>

Read the full speech on the IATA website click here


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