Overcapacity risk warning issued by International Air Transport Association head

Airline Industry Information, Feb 20, 2006

AIRLINE INDUSTRY INFORMATION-(C)1997-2006 M2 COMMUNICATIONS LTD

Giovanni Bisignani, director general of the International Air Transport Association (IATA), speaking at a conference in Singapore on Monday (20 February), warned the airline industry about the possible hazards associated with overcapacity.

The warning comes prior to the Singapore air show at which airlines are likely to add to last year's record aircraft orders.

According to Reuters, Bisignani warned the industry that it must learn from earlier periods in which it found itself with too many aircraft.

With both Airbus and Boeing reporting more than 1,000 orders in 2005, an increase in production is expected in the coming years. The companies reported a total of 2,057 aircraft orders in 2005, which is the most ever booked in a single year.

According to Bisignani, the predicted surge is likely to peak with deliveries adding 5.7% to the world airline fleet per year.

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