There is something wrong with the airline industry, according to Giovanni Bisignani, the director-general of the International Air Transport Association (IATA). At the Asia/Pacific summit here in Singapore this week, Bisignani reported that airlines ordered a record number of new aircraft last year while collectively losing $6 billion nett (and U.S. operators $10 billion), out of an overall $42 billion global loss since 2001. The losses have come as Airbus forecasts that carriers will spend an average annual $95 billion on new jetliners in the 2004-23 period.
Having vowed after the previous late 1990s’ economic downturn not to become stuck in an endless cycle of peaks and troughs, the return of good times has found air transport companies ordering aircraft as if there were no tomorrow. For some of them, this potential demise might become real if they continue to buy too many seats or sell them for less than cost.
