The world's aviation industry lost more money last year than it has made in its entire history, a top aviation official told an airline financial summit in New York.

"This is an industry that is now in a deep hole. We must start looking for footholds and ways to climb quickly out of the financial abyss," Iata director general Pierre Jeanniot said.

Jeanniot was referring to net losses of $12 billion on the international scheduled services of Iata members in 2001.

"We cannot blame all of our poor results on external factors," he said.

"Even before September 11 this industry was ill prepared to weather successfully even a fairly mild regular economic cycle.

"And so now is a good time to review the size and appropriateness of the corporate overhead and to discard the inefficiencies which have been masked by the recent growth."

Jeanniot identified three further priorities for service improvement and rationalisation to complement a recovery in profitability.

These included improved security and customer-friendly airport processes; adequate and cost-effective war risk insurance and regulation to permit restructuring.