Price-cutting has been singled out by the International Air Transport Association (IATA) as one of the key factors to blame for a fall in industry profits last year.
IATA director general Pierre Jeanniot told members at their annual general meeting in Jordan recently that a repeat of the same marketing tactics will have a potentially devastating effect on the industry's future.
Jeanniot warned that the industry needed badly to protect its yields and continue to drive down unit costs.
According to IATA figures, collective net profits from international scheduled services fell from US$5.2 billion in 1995 to US$3 billion last year.
Yields dropped six times as fast as unit costs - down 2.5 per cent against falls of 0.4 per cent - but despite the under performance, passenger load factors were at their highest at 69.4 per cent. "It's been another good year for the consumer, but we must remember that the airline customer needs value-for-money not just the lowest price," said Jeanniot.
"Were the airlines once again succumbing to the urge to slash fares instead of taking advantage of growth in order to increase profit?
"We have seen good growth in traffic, but we have unfortunately once again failed to use that growth opportunity to increase our profitability.
"I can only conclude that for our industry's marketing experts, price-cutting continues to have a mesmerising effect," he said.
Jeanniot stressed the need for airline bosses and their marketeers to strike a balance between fares charged and yields achievable.
The industry also faces the burden of distribution costs, which totalled US$22 billion last year, down US$2 billion on 1995 levels, and rising fuel charges and environmental taxes.
Jeanniot said these had to be curtailed to maintain profitability.