SINGAPORE, Feb 18: Global aviation faces a tough future despite making profits last year as it grapples with debt, rising fuel bills and a looming US recession, but Asia could be a bright spot, officials said on Monday.

“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 two per cent of revenue worth $490 billion, he said in a speech at a conference held as part of the Singapore Airshow starting 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 had already peaked in 2006 and the impact of a credit crunch spreading from the ailing US economy was still being calculated, he said.

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

Asia boasts some of the industry’s “strongest carriers and best and newest airport infrastructure” but the Middle East was spending $38 billion on airports and other aviation facilities, 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 was also developing Jebel Ali airport, which will serve 120 million passengers annually, he said.

But Asia-Pacific carriers accounted for 25pc of global passenger traffic against five to six per cent for Middle Eastern airlines, said Andrew Herdman, the director general of the Association of Asia-Pacific Airlines.

Asia-Pacific airlines also accounted for almost 40 per cent of global cargo traffic, he added.

“We expect that market share to continue to grow because the growth rates in Asia can be slightly faster than the global average,” Herdman said.

Singapore Airlines chief executive Chew Choon Seng said carriers were not immune to a US-led global economic slowdown, but that the city-state’s airline should weather the challenge because of its links to China and India.

“Perhaps being located here in Asia and with our good network to India and to China and the buoyant situation around the Southeast Asian region, we could be better positioned than some others,” he said.

Global competition for pilots, mechanics and cabin crew was another challenge, IATA’s 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.—AFP