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"Tough times will continue ... Airlines may be out of intensive care, but the industry is still sick," said International Air Transport Association (Iata) chief Giovanni Bisignani.

Airlines earned $5.6 billion in 2007, but that was less than 2 per cent of revenue worth $490 billion, he said in a speech at a conference held as part of the Singapore Air Show, which started on Tuesday.

"Airlines are in $190 billion of debt. Oil is pushing $100 per barrel, accounting for 30 per cent of operating costs or a total bill of $149 billion," he told delegates including ministers and airline chiefs.

The industry's revenue cycle peaked in 2006, and the impact of a credit crunch spreading from the ailing US economy is still being calculated, he said.

Yet despite the gloom, Asia's aviation industry could fare better due to the rapidly expanding markets in China and India, Bisignani said, though he warned that the region also faced big competition from the Middle East.

Asia boasts some of the industry's "strongest carriers and best and newest airport infrastructure", but the Middle East is spending $38 billion on airports and other aviation infrastructure, he said.

"Just look at Dubai: with nearly 35 million passengers, it now handles nearly as much traffic as Changi," he said, referring to Singapore's international airport.

The Gulf financial centre of Dubai serves 159 destinations, 37 per cent more than Changi, and it is also developing Jebel Ali airport, which will serve 120 million passengers annually, he said.

Singapore Airlines chief executive Chew Choon Seng said: "The aviation industry tends to reflect the state of the economies around the world, so there will be some impact on demand, for example."

Global competition for pilots, mechanics and cabin crew is another challenge, Bisignani said.

"To pilot the 16,000 new aircraft needed by 2020, we need to train 17,000 pilots a year. That is 40,000 more pilots than current capacity," he said.

In Asia capacity will expand by 8.8 per cent, with 427 new aircraft deliveries in 2008 and another 450 in 2009, but demand is expected to rise by a slower 6.4 per cent, Bisignani said. "This is not a recipe for long-term health."

Global aviation suffered following the September 11, 2001 attacks in the US, when militants hijacked passenger planes to use as airborne weapons.

The industry subsequently recovered, but the troubled US economy and a global credit crunch has cast a pall over world economic prospects.

Photo: EPA

Vocabulary

aviation, n: everything that is part of flying and aeroplanes

looming, adj: expected to come or happen very soon

recession, n: six months or longer of business getting worse and worse

to earn, v: to get money for your work or from your business

revenue, n: total amount of money that is paid to a business before taking off the costs

debt, n: money you have borrowed and still have to pay back

barrel, n: big, round container used to store a liquid; (crude oil) quantity of 158.987 litres

operating costs, n: amount of money needed to run a business

to peak, v: to reach a high point before going down again

ailing, adj: not strong; sickly; weak

Questions

1. What does Iata stand for?

 a. Internal Assessing Tax Authority

 b. International Air Transport Association

 c. Intentional Acquisition of Tourist Appropriation

 d. International Association of Transport Amendments

2. Why is it a problem that airlines earned $5.6 billion in 2007?

 a. The profit margin is very small.

 b. Passengers will demand cheaper tickets.

 c. Airports are going to triple their service charges.

 d. Oil-producing countries will increase their prices.

3. What is the advantage Asian carriers have?

 a. There are no regulations on aviation safety.

 b. More people from China and India want to fly.

 c. They can use cheap, pirated copies of spare parts.

 d. Asian customers feel safer in well-used aeroplanes.

4. What could hinder the expansion of the Asian aviation industry?

 a. Airports all over Asia remain under capacity for too long.

 b. The Middle East is improving its aviation industry rapidly.

 c. Asian development of new aircraft may advance too quickly.

 d. The extensive expansion of Asian economies leads to mass emigration.

5. What single event made the global aviation industry record big losses?

 a. the opening of Suvarnabumi Airport in Thailand

 b. the increasing use of biofuels in all transportation industries

 c. the violent suppression of peaceful demonstrators in Burma

 d. the use of passenger planes as weapons on September11, 2001

Synonyms

1. global

 a. round

 b. balloon

 c. helicopter

 d. worldwide

2. tough

 a. solid

 b. strong

 c. difficult

 d. dominant

3. grapple

 a. fight

 b. succumb

 c. worry about

 d. surrender to

4. push

 a. avoid

 b. exceed

 c. drop from

 d. advance to

5. fare

 a. fly

 b. do

 c. recruit

 d. expand

KEY

Questions   1. b, 2.a, 3. b, 4. b, 5. d

Synonym     1. d, 2. c, 3.a, 4. d, 5. b

By Ajarn Horst Baelz