When a group stated that fuel cost continues to hurt the airlines industry, I'm glad to be invested in AMA. Only a question of time before this little company has its producst installed on most planes around the globe.

Interesting article anyways:

By Gillian Wong

SINGAPORE - Improved efficiency has helped airlines better prepare for a possible global economic slowdown compared to the last major recession, but expensive fuel continues to hurt bottom lines, an airline industry group said Monday.

The airlines "are better prepared because we have a much more efficient system overall," the International Air Transport Association's chief executive, Giovanni Bisignani, said on the sidelines of the Aviation Leadership Summit in Singapore.

"Simplifying businesses brings into the industry $6 billion in savings. We've been able to develop new routes and (improve) fuel efficiency," Bisignani said.

Since 2001, the industry has seen labour productivity rise 64 per cent, while nonfuel unit costs have dropped 16 per cent and sales and marketing costs have decreased by 25 per cent, according to the association.

In Canada, the country's biggest carrier, Air Canada (TSX: AC-B.TO) restructured under bankruptcy protection in 2003 and 2004, emerging leaner, with fewer employees and planes.

In its latest financial report, Air Canada recorded its best-ever fourth quarter, as the airline benefitted from currency translation gains, higher revenues and cost controls. It had a profit of $35 million, reversing a $144 million loss in the same period the previous year.

Meanwhile, Calgary-based WestJet TSX:WJA) also reported stellar fourth-quarter profits, earning $75.4 million, up 180 per cent from $26.7 million for the same year-before period.

Despite the global airline efficiency improvements, Bisignani said it is still too early to forecast the impact on airlines' revenues that a U.S. or global slowdown would have. And he warned that tough times were ahead.

"The revenue cycle peaked in 2006 and the negative impact of the credit crunch is still being calculated. Airlines may be out of intensive care but the industry is still sick," he said earlier in an opening speech. The association expects air traffic growth to slow from 5.9 per cent in 2007 to four per cent this year.

High oil prices are somewhat offsetting the gains made in improving efficiency, Bisignani added.

He said the bill for oil spending this year was likely to be about US$150 billion, based on an estimated price of oil at US$78 a barrel. Fuel makes up nearly 30 per cent of the total operating cost of an airline, he said.

"Just imagine in 2003, our bill was $44 billion. ... You see how the impact has changed?" he said.

Carriers are also in a more vulnerable position now than during the 2001 recession due to mounting debt - which could see airlines headed toward an economic downturn with little cash to mitigate the fall, he said.

"This is an industry that is making $5 billion this year, as a forecast, but we have $190 billion in debt, so it means we're more vulnerable," he said.

Airlines said they were thinking of ways to cope with a potential slowdown in the world economy that could impact air traffic.

"The probability (of a slowdown) has gone up a lot since the turn of the calendar year," said Singapore Airlines chief executive Chew Choon Seng.

"The aviation industry tends to reflect the state of the economies around the world, so there will be some (impact) on demand for air travel," Chew told reporters. "We do have contingency plans mapped out if traffic slows down. We've some flexibility in deployment and fine-tuning our operating plans."