Giovanni Bisignani, General Director and Chief Executive of the International Air Transport Association's (IATA)I forcasted airline profits to increase while addressing the assembly at the  annual meeting this past week in Vancouver. For this year, the profit is expected to rise to $5 billion USD for an industry that has lost an estimated $50 billion since 2001; the global airlines in agreggate nearly broke even in 2006. This is a welcome turnaround. Both Delta and Northwest have recently exited bankrupcy courts and estimate profits for the year.

IATA continues to forecast an increase in oil prices upwards of $63 per barrel. So the airlines will continue to find more efficient cost-saving measures to counteract the affects of high fuel, which accounts for 26% of operating expenses according to the Wall Street Journal.

We will track quarterly results of the principal Latin American airlines as they are made available. To start, GOL, Brazil's low cost - low fare airline, reported 1Q net profit of $56.9 million USD reprenting 11.2% net margin. They added 22 daily flights including one new international destination: Lima, Peru. Plus, GOL added 2 new B-737NG's to the fleet first quarter.

As the U.S. and European legacy carriers have painfully discovered, the low cost carriers in Latin America are gaining marketshare quickly with new aircraft and agressive marketing. Three key components to maintaining longevity in the markets: Effective business plan, maintaining costs, and providing the schedules and services customers are willing to pay at fair market prices. GOL is achieving these objectives and provides an excellent blueprint for other Latin start-ups.

More later!

James Alexander