SINGAPORE (Reuters) – The growing cost of airport infrastructure poses risks to the airline industry’s profitability and growth, the head of the International Air Transport Association (IATA) said, adding there was an infrastructure crisis almost everywhere in the world.
“We see the costs rising to where it could be unbearable for the airlines and passengers,” IATA CEO General Alexandre de Juniac told reporters on the sidelines of the Singapore Airshow Aviation Leadership Summit.
He cited the proposed 14 billion pounds ($19.8 billion) cost of a third runway at London’s Heathrow Airport and the development of a fifth terminal at Singapore’s Changi Airport as cases where it was crucial that costs were kept under control.
“We must pay attention to these costs from the beginning,” de Juniac said. “We would like to avoid big projects in which we see overruns because the infrastructure is fantastic but it is very costly.”
Global airline profits are expected to rise to a combined $38.4 billion this year, according to IATA forecasts, but net profit margins at 4.7 percent remain low by the standards of other industries.
“Our exuberance is limited,” he said.
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Source: Investing.com
