An IATA study about airline profitability provides the bleak numbers to confirm what we already knew: Although some individual airlines are the exception to the rule, if you have money to invest, choose another industry.

The study, “Profitability and the air transport value chain,” traces the slim pickings in airline industry return on capital invested, which was just 3.8% annually from 1996 to 2004, and a slightly higher 4.1% on average from 2004 to 2011.

That compares with the 7.5% return on capital annually that investors would expected to have seen when investing in businesses of similar risk outside the airline industry, IATA states.

With the somewhat improved fiscal picture in the airline industry only providing enough resources for airlines generally to service their debt, this leaves the airline industry with few places to turn to raise the estimated $4-$5 trillion that it would take over the next two decades to meet the growing demands of global connectivity, according to the study.

The intent of the study, IATA says, is to provide a baseline to explore new answers for the way forward, but unfortunately there isn’t much in the way of ground-breaking thinking in the report.

Nor does the runway ahead look especially optimistic.

As for the inklings of a solution, IATA calls for new partnerships to enable collaboration among airlines and other industry sectors, less taxation, and “smart regulation,” which basically means less regulation of “cross-border” mergers.

In other words, there should be fewer roadblocks to an airline like Virgin Atlantic investing in and controlling Virgin America, for example, or one of the growing Gulf airlines such as Emirates or Etihad taking control of a U.S., European or Asian carrier.

These kinds of changes that IATA is advocating speak to the changing nature of airline partnerships and alliances, with some up-and-coming airlines eschewing the three major global alliances.

“Smart regulation is needed from governments around the world in order to maximize the economic benefits of connectivity — jobs and growth,” says IATA CEO Tony Tyler. “Unfortunately, high taxation and poorly designed regulation in many jurisdictions make it difficult for airlines to develop connectivity. On top of the cost issues, airlines also face a hyper-fragmented industry structure owing to government policies that discourage cross-border consolidation. There is plenty of room for some fresh thinking on all accounts.”

Airlines are the have-nots in the air transport supply and distribution chain, according to the portrait IATA paints, with global distribution systems (Sabre, Amadeus and Travelport) and freight-forwarding companies at the other end of the spectrum and generating average returns of 20% and 15%, respectively.

The market power that the GDSs command leads to inefficiencies and bloated returns, IATA says.

IATA and the airlines it represents are looking for a larger piece of the profit pie, and are desperate for new ideas to turn things around.

Here is the IATA report.