IATA Predicts $2.5B Net Profit for 2010

High Costs to Industry Remain Focal Point

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Jun 10, 2010, 09:45 ET

WASHINGTON, June 10 /PRNewswire/ -- The International Air Transport Association (IATA) announced the airline industry's expected return to profitability, $2.5 billion in 2010, during its Annual General Meeting held in Berlin this week. Yet, a major focus of the event was on the continued high costs that the airline industry faces, including a new air travel tax imposed on the industry by the German government this week.

While the industry in totality is expected to return to profitability after one of its worst years in history, Europe remains the one region that will continue operating at a loss, with expected losses of $2.8 billion according to IATA, making the new German air tax one more factor affecting the revival of the industry.

IATA Director General and CEO, Giovanni Bisignani viewed the state of the industry with "cautious optimism" while highlighting costs that could potentially return the industry to the red. Specific areas included a return to overcapacity, labor strife and external costs. IATA's "Wall of Shame" included the western GDSs who, according to Bisignani, are "charging at least $4 per transaction when China's TravelSky does it for just $1.20". Taxation and the cost of oil were also viewed as major threats to a return to profitability; however, one area that was not addressed that greatly affects airline profitability was the high cost of commercial credit card acceptance.

"We praise the efforts addressed by IATA on behalf of our airline owners, however, the failure to address credit card fees will be a continual drag on earnings," stated UATP CEO and President, Ralph Kaiser. "Credit card fees continue to rise and affect the bottom line of the airlines. The true cost of accepting credit cards is higher than most airlines realize and more times than not exceed GDS fees."

Kaiser added, "Airlines need to review card agreements and rationalize card fees with their credit card partners so that they are receiving true value for money. High value traffic and, particularly, corporate customers, should be loyal to an airline, not a credit card. With help from IATA, this challenge can be overcome and help the industry continue its way back to profitability. UATP is designed specifically to help with this problem."

UATP's connectivity reaches over 95% of the world's airline passenger-carrying capacity and provides low-cost alternatives to expensive credit card and merchant service fees. Airlines can completely avoid credit card fees if their corporate clients purchase tickets on the airline's own UATP card.

For more information, visit uatp.com.

About UATP

UATP accounts are accepted as a form of payment for corporate business travel worldwide by airlines, travel agencies and Amtrak®. UATP accounts are issued by: Air New Zealand (ANZFF.PK), American Airlines (NYSE: AMR), Austrian Airlines (AUALF.PK), Continental Airlines (NYSE: CAL), Delta Air Lines (NYSE: DAL), El Al Israel Airlines Ltd; GOL Linhas Aereas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4); Japan Airlines (JALSQ.PK), Qantas Airways, Ltd. (QUBSF.PK), United Airlines (Nasdaq: UAUA), and US Airways (NYSE: LCC). AirPlus International issues the UATP-based Company Account for: British Airways (LSE: BAY.L), Continental Airlines (NYSE: CAL), and Lufthansa German Airlines.