Air Transport World

IATA profits seen, more in sight if discipline maintained - Hammerskjold.

Geneva--International Air Transport Association airlines look set to make a profit of $250 million during 1984, and a further $200 million in 1985. This is after the losses for the years 1979-82, peaking at $1.9 billion in 1981, according to IATA Director General Knut Hammarskjold, speaking here.

IATA is also planning to reactivate its own insurance companies, based in Bermuda, to cover some 20% of the industry's business estimated to total some $624 million annually. This is being done because airlines are becoming incensed at increased rates being charged by what one IATA executive described as "a monopolistic group of London insurance people meeting in smoke-filled rooms."

Hammarskjold listed among the main aviation issues of 1984 the disappearance of the CAB after 45 years of regulating the industry, "leaving many questions unanswered as to how the Administration will deal with key aviation issues in the future," and the new engine noise regulations due to come into effect in the U.S. on January 1, 1985, and progressively elsewhere thereafter. The regulations would provide particular problems for third-world airlines.

Referring to the prospect for a return to "modest profitability," he said it was essential that airlines continued to exercise cost discipline and to tailor capacity to demand. An "over-positive reaction" to improving economic conditions was the greatest danger. There were, in some areas, already signs that capacity was increasing faster than the traffic. …

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