Airline industry raises profit forecast, but debt weighs

0 Comments | AFP, June, 2007

VANCOUVER, Canada (AFP) — The world airline industry raised its profit forecast for this year Monday to five billion dollars from 3.8 billion dollars, but said conditions need to improve more to help reduce heavy debts.

Giovanni Bisignani, director general of the International Air Transport Association, made the announcement in Vancouver at the opening of IATA's annual meeting.

"While the results are encouraging, airlines are a 470-billion-dollar industry," he said.

Calling a profit of five billion dollars "peanuts," Bisignani said the industry needed 40 billion dollars "just to cover the cost of capital."

"The industry is moving in the right direction, but with 200 billion dollars of debt, the financial hole is deep. The challenge is to turn peanuts...