Giovanni Bisignani Bill Quotations

If we reach our target of 100 percent for worldwide electronic ticketing in 2007, then the airline industry could save about $3.5 billion annually.

We fully understand the principles of supply and demand. But it is difficult to see this as anything other than a $14 billion cash grab by the oil industry that is pouring salt into the wounds of a global crisis.

Airlines will spend $34 billion more for fuel this year than last, and about $1.4 billion of that will make its way to the bottom line. That will drive losses to $7.4 billion for 2005.

Oil is once again robbing the industry of a return to profitability, ... Each dollar added to the price of a barrel adds $US1 billion in costs to the industry.

Each dollar added to the price of a barrel of oil adds $1 billion in costs to the industry.

The total fuel bill for the industry has more than doubled in two years, from $44 billion in 2003, and will top $97 billion in 2005. With a total industry turnover in the range of $400 billion a year, jet fuel will make up 25 percent of our total costs.

Freight and passenger traffic are forecast to grow in the 5 to 6 per cent range during the year but the industry is projected to record another loss of over US$4 billion for 2006.

Oil remains the wild card for industry profitability. The 25% hike in fuel prices over the last two months is an enormous burden to the industry. However, the S$ 1.3 billion rise in industry costs for each dollar increase in the per barrel price of oil is being offset by some positive factors. Industry hedging levels are 50%. Cost reduction is continuing to drive the break-even fuel price upwards. And the US domestic yield rose 12.4% in February.

Oil remains the single-biggest challenge for airline profitability. Strong demand gives little hope of significantly reduced prices this year. What is disappointing is the response of the oil industry. Instead of expanding refinery capacity, the oil companies plan to return a quarter of a trillion dollars to investors over the next two years. Airlines alone have contributed $14 billion to this windfall profit. It is time that governments stepped in to encourage investment in new refinery capacity along with research into alternative fuel sources.

We will only see profitability in 2007 when we expect a return of US$6.2 billion. This is a net profit margin of 1.5%, not even enough to cover the cost of capital and nowhere near recovering the billions lost since 2001. A long and difficult agenda for change involving all partners is still ahead of us.

Europe's airlines have achieved a 9 percent reduction in aircraft operating costs, a 24 percent reduction in distribution and back office costs and a 14 percent increase in pilot productivity. Airports, on the other hand, gave the airlines a 13 percent increase in per-passenger costs, with a total bill for airlines and their users of $14.5 billion.

Paper costs money...you do not need to be a rocket scientist to understand that up to $3 billion in savings are possible.