KUALA LUMPUR - THE future of the airline industry will move in tandem with the inexorable shift of economic activity from the Atlantic to the Pacific, Minister Mentor Lee Kuan Yew said here yesterday.

He was speaking to hundreds of airline chiefs and executives at the International Air Transport Association's (Iata) annual general meeting. His reading of the global economy was sought as the airline industry faces its worst crisis ever.

Iata predicted on Monday losses totalling US$9 billion (S$13.1 billion) this year, with carriers in the Asia Pacific likely to be the worst hit.

Mr Lee focused on broader growth trends. He noted that China's and India's economies will still grow this year, even as most other nations sink into recession. During recent visits to Shanghai and Suzhou, he found the Chinese confident of achieving growth of 8 per cent this year.

They also have huge reserves and continue to build airports, certain that air travel will integrate China both internally and internationally, he said. As for India, it should achieve growth of 6 per cent this year. The other big players in the shift of activity from the Atlantic to the Pacific are the Gulf states.

Mr Lee said he watched with wonderment Emirates Airlines' huge order of 45 A-380s, the world's largest commercial aircraft. The order had not been cancelled despite the financial crisis. By comparison, Singapore Airlines only has eight A-380s.

'We wonder where they are going and who they are carrying, but they are well placed financially,' he said of Emirates, a keen competitor of SIA's.

During the 40-minute dialogue hosted by BBC presenter Nick Gowing, Mr Lee also spoke of SIA's growth from a small carrier with few resources into one of the world's major airlines. His role in founding SIA and Changi Airport was lauded by Iata chief Giovanni Bisignani, who presented him with the trade body's Global Aviation Leadership Award.

Mr Lee said Singapore's decision to start SIA in 1972 was akin to 'whistling against the wind'.

He recounted how he made it clear to management and staff from the start that the carrier had to be self-supporting or shut down. SIA has stayed in business since then because it did things better than other airlines - it was more punctual, provided better service and flew newer aircraft.

Read the full story in Tuesday's edition of The Straits Times.