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IATA NEWS
 
Last update: March 30, 2009 10:43

IATA News


Date: 27 March 2009 No: 12

IATA Welcomes Abolition of Dutch Tax

Geneva - The International Air Transport Association (IATA) welcomed the decision by the Dutch Government to abolish the recently introduced departure tax as part of its economic stimulus package.

The tax added a cost of between EUR 11.25 to EUR 45 for every passenger departing from Dutch airports."The tax was a EUR 312 million competitive disadvantage for the Dutch economy. Aviation is an important catalyst for the Dutch economy. Abolishing the departure tax was the right decision for the Dutch economy. It will provide an economic boost in this crisis and help build a competitive future," said Giovanni Bisignani, Director General and CEO of IATA.

"This is just the tip of the iceberg. Airlines saw US$6.9 billion in crazy new taxation last year. This is producing all the wrong results - dampening demand and adding costs for businesses," said Bisignani. "This collective madness must stop. It is time for the Irish government to follow suit and repeal its new Air Travel Tax. And it is time for the UK to realise that its Air Passenger Duty is penalising one of its most powerful economic catalysts at the same time that they are spending billions to bail out other failed industries."

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Notes for editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 03 March 2009 No: 8

Managing Cargo in Crisis
-IATA Calls for a Supply Chain Approach-

Bangkok - The International Air Transport Association (IATA) called on the cargo supply chain to battle the current air cargo crisis by improving security, delivering a better product and boosting efficiency.

“The industry is in crisis and nobody knows that better than our cargo colleagues. Cargo demand has fallen off a cliff. After a shocking 22.6% decrease in December it dropped a further 23.2% in January,” said Giovanni Bisignani, IATA’s Director General and CEO in a recorded message to the 700 industry experts attending IATA’s World Cargo Symposium.

Air cargo represents about 10% of industry revenues. As 35% of the value of goods traded internationally is transported by air, air cargo is a barometer of global economic health. “The continued decline in cargo markets is a clear sign that we have not yet seen the bottom of this economic crisis,” said Bisignani.

In December 2008 IATA forecast 2009 freight volumes to fall 5%. Combined with a decrease in yields, this would result in a 9% drop in freight revenues to US$54 billion.

“Unfortunately, the shocking fall in demand that followed is making these projections look optimistic,” said Bisignani.

“As we battle this crisis, we must look for opportunities that will build our future with a more efficient industry focused on meeting customer needs. Customers want a good price and a great product, delivered via the supply chain with speed and reliability. And in crisis, customers will only get more demanding. To meet their expectations and build a solid future for the industry, change is required,” said Bisignani.

Bisignani highlighted three priorities for the supply chain: security, e-freight and Cargo 2000:

Security: Air cargo security costs continue to rise. Screening technology is not being optimised and definitions, requirements and enforcement vary from country to country. IATA called for a strong industry effort to convince the US that its plans to implement 100% cargo screening in 2010 are misguided.

“Scanning everything loaded onto the aircraft is a waste of precious resources. To be effective, we must identify the risks involved with a supply chain approach. IATA’s Secure Freight strategy focuses on a data-driven, risk-based approach with shared responsibility throughout the supply chain. Governments must remember that this is a global industry. We need a globally coordinated approach that looks at the entire supply chain,” said Bisignani.

Efficiency with e-freight: In the face of falling yields and demand Bisignani stressed that e-freight as a key driver for efficiency and savings is more important then ever. “Improving quality without reducing costs will not get us far. We need to modernise the old paper-based processes of air cargo with e-freight,” said Bisignani. Each freight shipment is accompanied by more than 30 documents.

E-freight currently has the capability to convert 12 of these to electronic documentation. Already it is operating at 18 locations covering 26 airports.“E-freight is not a theory. It is working and putting in place the basis to deliver efficiencies and cost reductions throughout the supply chain. By 2010 our target is to have the capability to remove 64% of the paper from 81% of international shipments. In other words, we will eliminate 20 documents and be live in 44 locations,” said Bisignani.

“To be successful, we need the commitment of the entire supply chain to generate economies of scale. The benefits are enormous: US$4.9 billion in cost savings for the supply chain, a 22% reduction in shipper buffer stock, a 25% reduction in customs penalties, an average 24 hour decrease in shipping time and a 1% increase in market share against sea shipments. Everybody benefits. Everybody needs to participate,” said Bisignani.

Quality - Cargo 2000: Bisignani also called for greater industry participation of the entire supply chain in Cargo 2000 to improve quality. “Cargo 2000 quality standards are even more important in this crisis. IATA is committed to Cargo 2000. It is part of our recommended quality standard. But to be effective, we need the whole supply chain to be aligned with a common vision on how to deliver quality. That is what Cargo 2000 is all about,” said Bisignani.

Cargo 2000 was established over a decade ago to simplify processes by reducing 40 steps in the logistics chain to 19 and to implement effective quality standards.

The IATA World Cargo Symposium is taking place in Bangkok, Thailand from 2-5 March 2009. Under the theme of “Focus on the Customer: Delivering in Turbulent Times,” the World Cargo Symposium is looking at building a solid future for air cargo, while battling the crisis that currently envelops the global economy. IATA will release an updated industry financial forecast on 24 March.

View Giovanni Bisignani's full speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Notes for editors:


Date: 26 February 2009 No: 7

Economic Gloom Continues in January Traffic

Geneva - The International Air Transport Association (IATA) announced international scheduled traffic results for January showing a deepening year-on-year demand slump.

International passenger demand fell by 5.6% in January 2009 compared to the same month in 2008. It is also a full percentage point worse than the 4.6% year-on-year drop recorded in December. The January fall in demand is the fifth consecutive month of contraction.

The 5.6% drop in passenger demand outpaced capacity cuts of 2.0% driving the load factor to 72.8% - 2.8% below what was recorded for January 2008.

The alarming collapse in cargo markets in December (-22.6%) worsened in January 2009 with a 23.2% year-on-year demand drop. This is the eighth consecutive month of contraction for freight traffic.

“Alarm bells are ringing everywhere. Every region’s carriers are reporting big drops in cargo. And, aside from the Middle East carriers, passenger demand is falling in all regions. The industry is in a global crisis and we have not yet seen the bottom,” said Giovanni Bisignani, IATA’s Director General and CEO.

Passenger

  • Asian carriers led the decline in passenger demand with an 8.4% year-on-year drop in January. While this is slightly better than the 9.7% contraction in December, this is positively skewed by Chinese New Year which fell at the end of January 2009 (and which was in February the year before). Capacity in the region contracted 4.3%. With Japan, the region’s largest market for air travel, expected to see its economy contract by an unprecedented 5% in 2009, the prospects for traffic in the region remain dismal.
  • North American carriers posted the second largest passenger decline at 6.2% led by a decline in Trans-Pacific travel. In response, carriers withdrew 2.6% of their international capacity, clawing back some of the expansion of 2008.
  • European carriers offset a 5.7% decline in demand with a 3.6% decrease in capacity. Demand decreased sharply from the 2.7% fall in December as European economies move into deep recession.
  • Latin American carriers saw a modest decline of 1.4%. Even against a 0.5% increase in capacity, the region turned in the highest load factors at 74.9%.
  • African carriers saw the demand decline slow from an average 4.0% in 2008 to 2.6% in January.
  • The Middle East was the only region with a positive traffic growth of 3.1%. This is far below both the double-digit traffic growth in 2008 and the 10.8% expansion in capacity.
Cargo
  • Asia Pacific carriers, representing 43% of the market, led the cargo decline with a 28.1% year-on-year drop. This was followed closely by the other major market players: European carriers (-23.0%) and North American carriers (-19.3%).
  • While this may appear to be relatively stabilised compared to the precipitous December drop, it is too soon to call a bottom in the air freight market. Manufacturers are still shedding inventory and cutting production which is expected to lead to further falls in freight volumes.

“The only good news is that fuel prices remain well below last year’s level. But the drop in demand is much more harmful. The industry is shrinking with revenues expected to fall by US$35 billion to US$500 billion, delivering a loss of US$2.5 billion this year,” said Bisignani.

“Airlines remain in intensive care, but while others ask for government bailouts, our demands on Governments are much more modest. First, don’t tax us to death in order to pay for investments in the banking industry. This includes the UK government’s plans to increase its multi-billion pound Air Passenger Duty and the Dutch Government’s misguided departure tax,” said Bisignani. In 2008, even as governments delivered tax breaks to stimulate economic growth, the airline industry took on an additional tax burden of US$6.9 billion.

“Second, give airlines the commercial freedoms that every other business takes for granted. With the world’s capital markets in disarray, archaic ownership restrictions are an unnecessary burden that must be lifted. Today’s crisis highlights the need to change the structure of this hyper-fragmented and fragile industry,” said Bisignani, referring to IATA’s Agenda for Freedom initiative.

View full January traffic results

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Notes for editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
  • Explanation of measurement terms:
  • RPK: Revenue Passenger Kilometres measures actual passenger traffic
  • ASK: Available Seat Kilometres measures available passenger capacity
  • PLF: Passenger Load Factor is % of ASKs used. In comparison of 2007 to 2006, PLF indicates point differential between the periods compared
  • FTK: Freight Tonne Kilometres measures actual freight traffic
  • ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)
  • IATA statistics cover international scheduled air traffic; domestic traffic is not included.
  • All figures are provisional and represent total reporting at time of publication plus estimates for missing data.
  • International passenger traffic market shares by region in terms of RPK are: Europe 32%, Asia Pacific 32.6%, North America 17.5%, Middle East 10.9%, Latin America 5.1%, Africa 2.0%
  • International freight traffic market shares by region in terms of FTK are: Asia Pacific 43%, Europe 26.3%, North America 17.4%, Middle East 10.1%, Latin America 2.3%, Africa 0.9%

Date: 29 January 2009   No: 4

Cargo Plummets 22.6% in December

Geneva - The International Air Transport Association (IATA) released international scheduled traffic results for both December 2008 and the full-year. 

In the month of December global international cargo traffic plummeted by 22.6% compared to December 2007. The same comparison for international passenger traffic showed a 4.6% drop. The international load factor stood at 73.8%.

For the full-year 2008, international cargo traffic was down 4.0%, passenger traffic showed a modest increase of 1.6%, and the international load factor stood at 75.9%.

“The 22.6% free fall in global cargo is unprecedented and shocking. There is no clearer description of the slowdown in world trade. Even in September 2001, when much of the global fleet was grounded, the decline was only 13.9%,” said Giovanni Bisignani, IATA’s Director General and CEO.”  Air cargo carries 35% of the value of goods traded internationally.

Bolstered by year-end advance-booked leisure travel, the 4.6% decline in December passenger demand was less dramatic than the fall in cargo. A 1.5% cutback in supply could not keep pace with falling demand, resulting in a 2.4% decline in the December load factor to 73.8%. “Airlines are struggling to match capacity with fast-falling demand. Until this comes into balance, even the sharp fall in fuel prices cannot save the industry from drowning in red ink,” said Bisignani.

“Yields are also under attack with a sharp drop in November premium traffic,” said Bisignani. For November, IATA reported an 11.5% drop in the number of premium tickets issued globally.

Passenger Traffic

  • Full-year traffic results show a 1.6% increase in demand which is dramatically down from the 7.4% recorded in 2007. Capacity grew by 3.5% resulting in a full-year average load factor of 75.9% (down from the 77.3% recorded for 2007) 
  • Following is a regional summary for December traffic: 
  • Asia Pacific carriers saw the sharpest decline in December international traffic at 9.7%. They also registered the sharpest reduction in capacity, but at 5.6%, this is lagging behind the drop in demand. Load factors sank to 72.6%. The economic turmoil in the region is widespread. December export volumes fell 20% for Singapore and 35% for Japan. Korean GDP showed a 5.5% contraction. While China’s economy continues to grow, recently released GDP figures show that it is at a much lower pace. As a result, traffic in the region continues to be the hardest hit. 
  • European carriers saw demand for international travel fall by 2.7% while capacity declined by 1.5%. Load factors stood at the global average of 73.8%. With business confidence indicators pointing to a 10% decline in industrial production and a 20% fall in trade, there is little reason for optimism. 
  • North American airlines saw December demand drop by 4.3%, far outstripping the 0.7% cut in international capacity. While North American carriers had made early cuts in domestic capacity of about 10%, this is the first month registering a cut in international operations. Nonetheless, the region recorded the highest load factor at 78.1%.  
  • African carriers continued to see their traffic fall, despite more robust economies and travel to the continent than other regions. International passenger traffic declined 4.6% in December. The 2.1% reduction in capacity left load factors at 68.5%, the lowest among the regions. 
  • Latin American airlines recorded a 1.1% increase in December demand and a 3.2% increase in capacity. With North American commodities demand and trade falling so sharply, the months ahead are likely to be more difficult for airlines in this region. 
  • Carriers in the Middle East showed a 3.9% increase in demand in December, far below the 10% capacity increase. The region’s carriers ended five years of double-digit growth with full-year demand growing by 7.0% (compared to 18.1% recorded for 2007). Growth will continue to slow in 2009 as oil revenues and long-haul hub connection traffic are now both in decline. 

Freight Traffic

  • Full year international air freight traffic contracted 4.0% for the year compared to 4.3% growth in 2007. 
  • December saw an unprecedented 22.6% decline in air freight volumes, compared with the previous year. All regions showed major declines. 
  • The collapse in the airline industry’s freight business is a reflection of 20-30% declines in export and import volumes being reported across Asia, North America and Europe as the global recession plumbs new depths in December. 
  • Asia-Pacific carriers, accounting for 45% of international cargo, led the December decline with a 26.0% contraction compared to the previous year. Latin American carriers saw cargo drop 23.7%; North American carriers 22.2% and European carriers 21.2%. Single-digit declines were recorded by Middle Eastern carriers (-9.2%) and African carriers (-8.0%) 

“2009 is shaping up to be one of the toughest years ever for international aviation. The 22.6% drop in international cargo traffic in December puts us in un-charted territory and the bottom is nowhere in sight. Keep your seatbelts fastened and prepare for a bumpy ride and a hard landing,” said Bisignani.

Airlines registered a US$5 billion loss in 2008. For 2009 IATA is forecasting a further loss of US$2.5 billion based on a fuel price of US$60 per barrel, a decline of 3.0% in passenger volumes, a drop of 5.0% in cargo traffic and yield deterioration of 3.0%. Industry revenues are expected to contract by US$35 billion (from US$536 billion in 2008 to US$501 billion in 2009).

In the face of this economic crisis, IATA is calling for major structural changes to the industry. “We don’t want bail-outs. But we need to change the ownership rules. Almost every other business has the freedom to access to global capital and the ability to merge across borders where it makes sense. To manage in this crisis, airlines need the same management tools,” said Bisignani. 

View November premium traffic (pdf)
View full 2008 traffic results

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Notes for editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic. 
  • Explanation of measurement terms:
  • RPK: Revenue Passenger Kilometres measures actual passenger traffic 
  • ASK: Available Seat Kilometres measures available passenger capacity  
  • PLF: Passenger Load Factor is % of ASKs used. In comparison of 2007 to 2006, PLF indicates point differential between the periods compared  
  • FTK: Freight Tonne Kilometres measures actual freight traffic  
  • ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)  
  • IATA statistics cover international scheduled air traffic; domestic traffic is not included. 
  • All figures are provisional and represent total reporting at time of publication plus estimates for missing data.  
  • International passenger traffic market shares by region in terms of RPK are: Europe 34.1%, Asia Pacific 31.1%, North America 18.7%, Middle East 9.2%, Latin America 4.5%, Africa 2.4% 
  • International freight traffic market shares by region in terms of FTK are: Asia Pacific 44.5%, Europe 27.4%, North America 16.9%, Middle East 7.9%, Latin America 2.1%, Africa 1.2%

Date: 16 January 2009   No: 3

IATA Welcomes Decision on Frankfurt’s Fourth Runway

Geneva - The International Air Transport Association (IATA) today welcomed the decision of the Hessen State Court to approve the construction of a fourth runway and Terminal 3 at Frankfurt’s Rhein-Main Airport.

“This is an important decision for Germany because a strong, competitive aviation sector with the right infrastructure supports employment and economic growth,” said Giovanni Bisignani, Director General and CEO of IATA.  “However, while the decision on expansion is welcomed, the proposed restriction on night flights is not. Frankfurt is a global hub that needs global connectivity. Severe restrictions on night flights constrain international cargo operations and will hurt economic growth. This should be reconsidered in a future court ruling.”

“Aviation takes its environmental responsibilities seriously with a vision for carbon-neutral growth en-route to a carbon-free future,” said Bisignani.  “Our track record is good. Aircraft are 70% more fuel-efficient and 75% quieter than they were 40 years ago. And the global fleet is getting even quieter and more fuel efficient. In the first 11 months of 2008 1,037 new aircraft - with improved fuel efficiencies of 20-30% - were delivered while 881 inefficient old aircraft were parked. All of these improvements will contribute to a 4.5% drop in emissions in 2009 and minimise the environmental impact of aviation in Frankfurt and worldwide in the future.”

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Editors Notes:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 16 January 2009   No: 2

IATA reiterates its environmental commitment even in times of crisis

Rome - The International Air Transport Association (IATA) highlighted aviation’s commitment to its environmental responsibility at the inauguration of its aviation and environment display at Rome’s Fiumicino Airport.

“Our commitment to environmental responsibility is firm and strong. Aviation accounts for 2% of global CO2 emissions. The industry’s constant commitment to efficiency has kept us a small part of the big problem of climate change. Even as we face the worst revenue situation in 50 years - with US$2.5 billion in losses this year, following a US$5 billion loss in 2008 - we are determined to continue to deliver effective solutions that reduce aviation’s emissions,” said Giovanni Bisignani, IATA’s Director General and CEO.

IATA is leading the air transport industry’s efforts to address climate change and improve aviation’s environmental performance with a four-pillar strategy: investing in technology, flying planes effectively, building efficient infrastructure and using positive economic measures. “No other industry is as united in its approach. The IATA vision is to achieve carbon-neutral growth on the way to a carbon-free future,” said Bisignani.

“The strategy is delivering results. Aviation’s emissions will fall 4.5% in 2009. Part of this is due to the expected 2.5% reduction in traffic as a result of the global economic crisis. The rest is directly related to the strategy. Airlines are investing in fuel-efficient aircraft and retiring old ones. The numbers are impressive. In the first 11 months of 2008 1,037 new aircraft - with improved fuel efficiencies of 20-30% - were delivered. These replace 881 inefficient old aircraft which were parked,” Bisignani said.

IATA’s environment leadership is also contributing to reducing fuel burn. ”Working with airlines, airports and air navigation service providers, we have saved 59 million tonnes of CO2 since 2004, equal to US$12.2 billion in fuel costs. In 2008 alone we identified and saved 15 million tonnes of CO2, equal to US$5 billion,” Bisignani added. Since 2001 the air transport industry improved its fuel efficiency by 19%. By 2020 the industry target is to achieve a 25% improvement in fuel efficiency compared to 2005.

Bisignani identified three critical areas that can help the industry deliver even better results:

  • Alternative fuels: “Bio-fuels show the most promise for reducing aviation’s carbon emissions. Over the entire lifecycle they have the potential to reduce CO2 emissions by up to 60%. IATA is committed to using 10% alternative fuels by 2017. But we need the right bio-fuels, those that don’t compete with food for land-use or harm bio-diversity, and that meet the current exacting technical specifications of jet kerosene. The recent tests by Air New Zealand and Continental Airlines proved that bio-fuels are viable. Now we need to speed-up the certification process. The current timeline sees certification by 2013. We are challenging governments to deliver even faster - by 2010 or 2011,” said Bisignani.

  • Better air navigation: “We need to fly more effectively. Every Continuous Descent Approach (CDA) saves between 150 to 600kg of CO2. Each Clean Airspeed Departure (CAD) saves between 600 to 5,000 kg of CO2. But we can only take advantage of these efficiencies at less than 50 of Europe’s airports. Hopefully, Rome will come on board with these measures soon. Thinking even bigger, after decades of talks and no action, a Single European Sky (SES) is picking up momentum.  We have high hopes that European Commission Vice President Tajani will be supported by Europe’s governments to deliver the SES Second Package so that we can have 9 functional air space blocks, a network manager and tough efficiency targets in place by 2012. This would save a massive 16 million tonnes of CO2,” said Bisignani.

  • A global solution on positive economic measures: ”Governments around the world must agree a global solution to reduce aviation emissions. Europe’s unilateral approach with its plan to include aviation in its regional European Emissions Trading Scheme (ETS) is flawed and illegal. It is against the Chicago Convention. Non-EU governments will challenge this approach and Europe will lose. On top of that, it is hypocritical to charge the airlines for emissions when the infrastructure forces airlines to fly inefficiently. A Single European Sky by 2012 is a must,” said Bisignani. ”A far better way for Europe to show true leadership on environment is to support a global solution brokered through the International Civil Aviation Organisation (ICAO), a UN body and its 15-government Group on International Aviation and Climate Change (GIACC). This is what the Kyoto protocol envisioned. And it is what the G8 agreed in Japan in June 2008. Governments - including those in Europe - must ensure that GIACC’s action plan, to be issued in September, will be challenging and effective.”

IATA’s environmental exhibition displays innovations that airlines and the industry are implementing to improve fuel efficiency. It also looks to future innovations, including bio-fuels and revolutionary concepts for airframe and engine design. It is a reminder of the potential for technical and operational achievements.

View Giovanni Bisignani's full speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Quentin Browell
Assistant Director Aviation Environment
Tel: +41 22 770 2555
Email: browellq@iata.org

Editors Notes:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
  • The IATA environment exhibition is touring European airports and is currently located at Rome Fiumicino for two months with the generous cooperation of Aeroporti di Roma.
  • The stands consist of two curved, opposing panels forming a ‘tunnel’, suggestive of an aircraft engine. The visitor is guided on a remarkable journey from the inception of powered flight to the present day. This journey illustrates the key elements of IATA’s four-pillar strategy on the environment – focussing on technology, operations and infrastructure. Our journey extends to the future, exploring new technologies such as algae-based bio fuels, solar power and fuel cells that could provide the building blocks for developing a carbon emission-free plane in the next 50 years.
  • The stands are 3 metres by 6 metres and are 2.1 metres high. The base language is English along with a second language that is changed for each location. Touch-screens and interactive models explore and explain issues such as alternative fuel sources, revolutionary concepts in airframe and engine design, the shortening of routes and operational improvements in the airline industry. The stand includes “Destination Zero” – essentially, ‘the film of the stand.’

Date: 15 January 2009   No: 1

IATA Welcomes U.K. Government Decision on Third Runway

Geneva - Following the announcement of the U.K. Government decision to add a third runway at London Heathrow, International Air Transport Association Director General and CEO Giovanni Bisignani issued the following statement:

“The U.K. Government made the right decision. The third runway allows Heathrow to grow, and, more importantly, it will be an enormous economic catalyst by better connecting the London and U.K. economies to global business,” said Bisignani.

 “Growth must be environmentally responsible. The environmental restrictions on the third runway are challenging,” said Bisignani. “IATA’s four-pillar strategy on climate change - focused on improved technology, effective operations, efficient infrastructure and positive economic measures - is delivering real results. Since 2004 we saved over 59 million tonnes of CO2. Moreover, as a result of the efficiencies that our industry continues to put in place, we have limited our CO2 emissions to 2% of the global total. Our track record is impressive. And no industry is as ambitious about its future. I am confident that the environmental impact of the third runway can be managed effectively,” said Bisignani.

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Editors Notes:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 30 December 2008 No: 58

News International Cargo Down 13.5% in November
-Passenger Declines by 4.6%-

Geneva - The International Air Transport Association (IATA) announced results for November showing a 4.6% drop in international passenger traffic and a 13.5% drop in international cargo. International capacity dropped by 1.0%. The November international passenger load factors stood at 72.7% which is a decline of approximately 3 percentage points over the same month last year.“The 13.5% drop in international cargo is shocking. As air cargo handles 35% of the value of goods traded internationally, it clearly shows the rapid fall in global trade and the broadening impact of the economic slowdown. By comparison, this is largest drop since 2001, in the aftermath of September 11,” said Giovanni Bisignani, IATA’s Director General and CEO. “The industry is now shrinking by all measures. The 1.0% capacity cut in international passenger markets in November could not keep pace with the 4.6% fall in passenger demand. We can expect deep losses in the fourth quarter,” said Bisignani.

International Passenger Traffic

  • The November passenger decline of 4.6% is a considerable worsening from both the 1.3% demand contraction in October and the 2.9% fall in September.
  • Asia-Pacific carriers face the most difficult operating environment with a 9.7% decline in November, following a 6.1% contraction in October. The region also had the most aggressive capacity cuts at -5.1%. While Chinese domestic traffic rebounded after the Olympics, travel to and from international markets continues to decline, reflecting the weakness in both global trade and consumer confidence.
  • North American carriers saw international traffic decline by 4.8% - the second largest drop among the regions. Until August, the region’s carriers had been shifting capacity to international markets. With the near collapse of the investment banking sector and consequent reductions in business travel, North Atlantic travel slumped. Carriers have started to cut international capacity with a 0.8% drop in November (following 0.4% growth in October)
  • European carriers saw international traffic drop by 3.4% as all the region’s major markets (intra-Europe, North Atlantic, and Asia) slumped.
  • Smaller emerging markets fared better. African carriers saw traffic decline by 1.6%. This is a considerable improvement from the 12.9% drop in October, resulting from stronger intra-African traffic. Middle Eastern carriers saw traffic increase by 5.6%. This is up from 3.5% growth in October, but represents a step-change from the double-digit expansion that characterized growth prior to the current financial crisis. Latin American carriers saw a slight decline in growth to 3.3% (compared to 4.5% growth in October), buoyed by the region’s positive, albeit slower, economic growth.
International Freight Traffic
  • Asia-Pacific carriers (representing 44.6% of global freight) saw freight traffic fall by 16.9% in November—the largest decline of any region. As freight accounts for a larger percentage of revenues for the Asia-Pacific carriers, fourth quarter profits for the region’s carriers will be disproportionately (and negatively) impacted by the downturn in the global air freight market.
  • Double-digit freight declines were also experienced by Latin American carriers (-15.7%), North American carriers (-14.4%) and European carriers (-11.0%). Freight traffic for Middle Eastern carriers turned negative (-1.6%), following 1.0% growth in October. African carriers, while being the only region posting freight growth (2.2%), saw a decline from the 3.0% growth posted in October. Plummeting business confidence and the continuing turmoil in financial markets indicates that the worsening trend will be continued in December.

“With no end in sight for the worsening global economy, the 2008 gloom will carry over into the new year. Relief in the oil price has been outstripped by the falls in demand and capacity cuts are not keeping pace. The industry is back in intensive care. Improving efficiency everywhere will be theme for 2009,” said Bisignani.

View full November traffic results

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Editors Notes:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
  • Explanation of measurement terms:
    • RPK: Revenue Passenger Kilometres measures actual passenger traffic
    • ASK: Available Seat Kilometres measures available passenger capacity
    • PLF: Passenger Load Factor is % of ASKs used. In comparison of 2008 to 2007, PLF indicates point differential between the periods compared
    • FTK: Freight Tonne Kilometres measures actual freight traffic
    • ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)
    • IATA statistics cover international scheduled air traffic for airlines based in those markets; domestic traffic is not included.
    • All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised.
    • International passenger traffic market shares by region in terms of RPK are: Europe 34.2%, Asia Pacific 31.1%, North America 18.8%, Middle East 9.1%, Latin America 4.4%, Africa 2.4%
    • International freight traffic market shares by region in terms of FTK are: Asia Pacific 44.6%, Europe 27.4%, North America 17.0%, Middle East 7.8%, Latin America 2.1%, Africa 1.1%

Date: 09 December 2008   No: 57

US$2.5 billion loss for 2009
-Worst Revenue Environment in 50 Years-

Geneva - The International Air Transport Association (IATA) announced its forecast for 2009 showing an industry loss of US$2.5 billion. All regions, except the US, are expected to report larger losses in 2009 than in 2008.

Forecast highlights are:

Industry revenues are expected to decline to US$501 billion. This is a fall of US$35 billion from the US$536 billion in revenues forecasted for 2008. This drop in revenues is the first since the two consecutive years of decline in 2001 and 2002.

Yields will decline by 3.0% (5.3% when adjusted for exchange rates and inflation).

Passenger traffic is expected to decline by 3% following growth of 2% in 2008. This is the first decline in passenger traffic since the 2.7% drop in 2001.

Cargo traffic is expected to decline by 5%, following a drop of 1.5% in 2008. Prior to 2008 the last time that cargo declined was in 2001 when a 6% drop was recorded.

The 2009 oil price is expected to average US$60 per barrel (Brent) for a total bill of US$142 billion. This is US$32 billion lower than in 2008 when oil averaged US$100 per barrel (Brent).

“The outlook is bleak. The chronic industry crisis will continue into 2009 with US$2.5 billion in losses. We face the worst revenue environment in 50 years,” said Giovanni Bisignani, IATA’s Director General and CEO.

IATA also updated its forecast for 2008 to a loss of US$5.0 billion. This is slightly improved from the US$5.2 billion loss projected in the Association’s September forecast primarily as a result of the rapid decline in fuel prices.

The reduction in industry losses from 2008 to 2009 is primarily due to a shift in the results of North American carriers. Carriers in this region were hardest hit by high fuel prices with very limited hedging and are expected to post the largest industry losses for 2008 at US$3.9 billion. An early 10% domestic capacity reduction in response to the fuel crisis has given the region’s carriers a head-start in combating the recession-led fall in demand. The lack of hedging is now allowing the region’s carriers to take full advantage of rapidly declining spot fuel prices. As a result, North American carriers are expected to post a small profit of US$300 million in 2009. “North America will be the only region in the black, but the expected US$300 million profit is less than 1% of their revenue. 2009 will be another tough year for everyone,” said Bisignani.

All other regions will show losses:

Asia-Pacific carriers will see losses more than double from the US$500 million in 2008 to US$1.1 billion in 2009. With 45% of the global cargo market, the region’s carriers will be disproportionately impacted by the expected 5% drop in global cargo markets next year. The region’s largest market - Japan - is already in recession. And its two main growth markets - China and India - are expected to deliver a major shift in performance. Chinese growth will slow as a result of the drop-off in exports. India’s carriers, which are already struggling with high taxes and insufficient infrastructure, can expect a drop in demand following on from the tragic terror incidents in November.

Losses for European carriers will increase ten-fold to US$1 billion. Europe’s main economies are already in recession. Hedging has locked in high fuel prices for many of the region’s carriers in US dollar terms, and the weakened Euro is exaggerating the impact.

Middle Eastern airlines will see losses double to US$200 million. The challenge for the region will be to match capacity to demand as fleets expand and traffic slows - particularly for long-haul connections.

Latin American carriers will see losses double to US$200 million. Strong commodity demand that has driven the region’s growth has been severely curtailed in the current economic crisis. The downturn in the US economy is hitting the region hard.

African airlines will see losses of US$300 million continue. The region’s carriers face strong competition. Defending market-share will be the main challenge.

Bisignani made special note of the continuing contraction of air cargo traffic that started in June 2008. “Air cargo comprises 35% of value of goods traded internationally. The 7.9% decline in October is a clear indication that the worst is yet to come - for airlines and the slowing global economy,” said Bisignani.

“Airlines have done a remarkable job of restructuring themselves since 2001. Non-fuel unit costs are down 13%. Fuel efficiency has improved by 19%. And sales and marketing unit costs have come down by 13%. IATA made a significant contribution to this restructuring. In 2008 our fuel campaign helped airlines to save US$5 billion, equal to 14.8 million tonnes of CO2. And our work with monopoly suppliers yielded saving of US$2.8 billion. But the ferocity of the economic crisis has overshadowed these gains and airlines are struggling to match capacity with the expected 3% drop in passenger demand for 2009. The industry remains sick. And it will take changes beyond the control of airlines to navigate back into profitable territory,” said Bisignani.

Bisignani outlined an industry action plan for 2009 that reflected the Association’s Istanbul Declaration in June of this year. “Labour must understand that jobs will disappear when costs don’t come down. Industry partners must contribute to efficiency gains. And governments must stop crazy taxation, fix the infrastructure, give airlines normal commercial freedoms and effectively regulate monopoly suppliers,” said Bisignani.

View Giovanni Bisignani's full speech
View Financial Forecast (pdf)

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Editors Notes:

  •  IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 27 November 2008   No: 56

Traffic Decline Continues
-Second Month of Global Contraction-

Geneva - The International Air Transport Association (IATA) announced international air traffic for October showing a second consecutive month of global decline. International passenger traffic declined by 1.3% compared to the same month in the previous year—a smaller decline than the 2.9% drop experienced in September. The October load factor was 75%, approximately 2% below previous year levels. International air freight traffic contracted by 7.9% in October for a fifth consecutive month of increasingly severe drops.

“The gloom continues and the situation of the industry remains critical. While the drop in oil prices is welcome relief, recession is now the biggest threat to airline profitability. The slight slowing in the decline of passenger traffic is likely only temporary. The deepening slump in cargo markets is a clear indication that the worst is yet to come,” said Giovanni Bisignani, IATA’s Director General and CEO.

Passenger

Asia-Pacific carriers, which represent 31% of global international passenger traffic, saw passenger traffic decline by 6.1% (slightly improved from the 6.8% decline in September). A capacity reduction of 2.3% could not keep pace with the drop in demand, taking load factors for the region’s carriers to 72.2%. Year-to-date growth for Asia-Pacific carriers fell to 0.3%, the weakest growth outside of Africa.

North American carriers saw international traffic decline by 0.8% in October compared to the previous year, only slightly changed from the 0.9% drop in September. European carriers saw traffic rebound slightly into positive territory with 1.8% growth in October. While trans-Atlantic traffic growth was flat for the month, with both the European and US economies in recession further declines in international traffic for both regions’ carriers are expected.

Latin American and Middle Eastern airlines recorded 4.5% and 3.5% growth respectively. While better than the September traffic figures, both regions remain well below the double-digit growth rates experienced over the first half of the year. Economic forecasts for both regions see considerable slowing of GDP growth over the next 12 months to the 2-4% range. Airlines in both regions can expect a continued slowing of growth.

African carriers saw the largest decline with international traffic dropping by 12.9% in October. It is the only region where traffic deteriorated relative to September. This continues the year-long trend of Africa being the weakest market for air traffic with falls in both intercontinental and regional travel.

Cargo

The 7.9% decline in air freight during October has dragged year-to-date air freight volume to 0.8% below the same period in 2007. Forecasted declines in key air cargo sectors such as semi-conductors indicate that weakness is expected to continue.
Asia-Pacific carriers, which account for 44.7% of the international cargo market, saw international freight traffic decline by 11.0%, reflecting the sharp drop in the region’s exports.

North American and European carriers saw less precipitous declines of 7.6% and 5.4% respectively.

In sharp contrast to passenger performance, African carriers saw a 3.0% improvement in cargo during October. This reflects trade growth within Africa.

Latin American carriers saw the largest decline (11.4%).

Middle Eastern carriers were the only others to report growth (1.0%) in October.

“As the global economic downturn re-shapes the world’s financial industry, policy makers must also understand that change is needed in air transport. Unlike the finance industry, airlines are not asking for handouts. Commercial freedom, efficiency and a fair treatment in taxes are needed,” said Bisignani.

We need commercial freedoms to run this as a normal business. IATA’s Agenda for Freedom is building momentum among governments for access to markets and equity capital and the ability to merge or consolidate where it makes business sense. We need efficiency everywhere. At the top of the list is a Single European Sky by 2012 that would save 16 million tonnes of CO2 and over EUR 5 billion in operating costs. And we need common-sense in taxation. It was good news that the Belgian government has backed away from its plans to introduce a new departure tax. But the UK’s decision to hike its Air Passenger Duty is a major step in the wrong direction. Air transport is a catalyst for economic growth. But plugging budget gaps with gratuitous travel taxes is bad policy that is not sustainable. This must change,” said Bisignani.

View full October traffic results

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Editors Notes:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
  • Explanation of measurement terms:
  • RPK: Revenue Passenger Kilometres measures actual passenger traffic
  • ASK: Available Seat Kilometres measures available passenger capacity
  • PLF: Passenger Load Factor is % of ASKs used. In comparison of 2008 to 2007, PLF indicates point differential between the periods compared
  • FTK: Freight Tonne Kilometres measures actual freight traffic
  • ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)
  • IATA statistics cover international scheduled air traffic for airlines based in those markets; domestic traffic is not included.
  • All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised.
  • International passenger traffic market shares by region in terms of RPK are: Europe 34.1%, Asia Pacific 31.0%, North America 19.0%, Middle East 9.1%, Latin America 4.4%, Africa 2.3%
  • International freight traffic market shares by region in terms of FTK are: Asia Pacific 44.7%, Europe 27.3%, North America 17.0%, Middle East 7.8%, Latin America 2.1%, Africa 1.1%

Date: 25 November 2008   No: 55

Right Diagnosis, Wrong Prescription
-UK APD Hikes Are a Mistake-

Geneva - The International Air Transport Association labelled the increase in UK Air Passenger Duty (APD) and its reform into four bands as an enormous mistake. The changes were announced in the UK Chancellor’s Pre-Budget Report, with the increases to take effect from November 2009.

“The Chancellor wisely abandoned plans to introduce Aviation Duty, the proposed per plane tax, on the grounds that this is no time for introducing greater instability in the airline industry - a catalyst for economic growth. Unfortunately the wisdom stopped there. Adding millions of Pounds to the cost of travel from the UK will not help the Chancellor set the UK economy back on a growth path. We have the right diagnosis but the wrong prescription,” said Giovanni Bisignani, IATA’s Director General and CEO.

“This is another cash grab by the Treasury, thinly disguised as an environmental measure. The UK Government already admits that the current GBP2 billion take from APD more than covers the cost of aviation’s climate change impact. Airlines take their environmental responsibility seriously. In this year alone, IATA-led efficiency measures have saved over 14 million tonnes of CO2. How much CO2 will the increased APD save? The blunt instrument of taxation does nothing to improve environmental performance,” said Bisignani.

None of the APD revenue is earmarked for environmental initiatives. “I ask a question that I have asked many times before. How many trees will the Treasury plant with the cash? And where is the commitment to end APD when aviation joins the European Emissions Trading scheme in 2012? We cannot accept tax upon tax in place of a sound environmental policy,” said Bisignani.

IATA also criticised the UK Government’s proposal for creating commercial distortions. “The restructured APD does almost everything wrong. It is a disproportionate burden for trips over 2,000 miles. It disadvantages UK carriers compared to their rivals. The highest travel taxes in the world reduce the UK’s competitiveness for businesses that depend on global connectivity. Increases in economy fares are a step backwards to the days when world travel was only accessible to the wealthy. The environment won’t see even a penny of the cash collected. And, the proposal puts the UK’s 200,000 aviation jobs at greater risk. The only one smiling is the Chancellor as the Treasury counts its billions,” said Bisignani.

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 18 November 2008   No: 54

Europe’s Environmental Challenge
Single European Sky by 2012

Bordeaux -The International Air Transport Association (IATA) challenged Europe to deliver a Single European Sky (SES) by 2012.

“After decades of talks and little action, failure to implement an effective SES is Europe’s biggest environmental embarrassment. In 2007, this failure resulted in 21 million minutes of delays and 468 million kilometres of unnecessary flight. This wasted 16 million tonnes of CO2. This crisis that is gripping the airline industry highlights the fact that airlines cannot afford the EUR 5 billion cost that this brings. And neither can Europe afford the impact on its competitiveness. This must change fast,” said IATA Director General and CEO Giovanni Bisignani in a keynote address to the European Air Transport Summit being held in Bordeaux.

IATA fully supports the European Commission’s performance-driven approach. This was proposed in the SES II Package proposed by Vice President Tajani in June. “We need binding performance targets at the national and community levels, functional airspace blocks (FABs) coordinated by a strong network manager with harmonised safety oversight through EASA, and the enabling SESAR technology to allow a Single European Sky to deliver its promised benefits,” said Bisignani.

FABs and SESAR are the critical building blocks for an SES. The plan to combine European airspace into 9 cross-national FABs will increase system capacity by 70%, reduce average delays to 1 minute or less, cut user costs by 50% and reduce the environmental impact per flight by 10% by 2020 while improving safety. “These 9 FABs cannot be kingdoms operating independently. We need a strong network manager to drive efficiencies and meet binding performance targets. And we need an EASA with sufficient resources to provide safety oversight for airports and air navigation service providers,” said Bisignani.

IATA linked SES to Europe’s proposal to include aviation into the European Emissions Trading Scheme (ETS) in 2012.  “2012 is the year. We need 9 FABs in place, delivering benefits against binding performance targets with a strong network manager. This is the minimum requirement. Even if Europe chooses to overlook the major flaws of its ETS proposal - the unilateral approach is illegal and the regional scope is ineffective - the only credibility that is left is the SES. Airlines cannot accept to be charged for emissions in Europe when the inefficiency of the system forces them to waste 16 million tonnes of CO2 each year,” said Bisignani.

Bisignani attacked 2 persistent myths surrounding the SES. “First, job losses are a misplaced fear when there is a global shortage of air traffic controllers and SESAR (the technology component of SES) will generate 200,000 highly skilled jobs in Europe. Second, FABs don’t reduce sovereignty. Europe faces the same question with the Euro. Today nobody questions the sovereignty of the Euro-Zone states. SES is no different. Sovereignty is even institutionalised in the independent National Supervisory Authority. These are two myths which we must kill with facts,” said Bisignani.

IATA’s Four Pillar Strategy to Address Climate Change is delivering results. The strategy - endorsed by industry and government focuses on technology, operations, infrastructure and positive economic measures - including ETS. Since 2004, IATA efforts, including route shortening and working directly with airlines to implement best operational practices, has saved 59 million tonnes of CO2 with a cost saving of US$12 billion. An effective SES would be a key contributor to these efforts.

Europe must contribute to a global solution on economic measures addressing change. “While focusing technical efforts to deliver the SES by 2012, Europe must aim its political efforts on the International Civil Aviation Organisation (ICAO). Article 2 of the Kyoto Protocol gives ICAO the responsibility to find an effective global solution for aviation’s emissions that is global and voluntary for states. This summer the G8 affirmed this role in their Summit Declaration. With 44 European states among ICAO’s 189 contracting members and with three states on the 15 member ICAO Group on International Aviation and Climate Change (GIACC), Europe has a duty to ensure that ICAO delivers a global result and to harmonise its approach with the global solution,” said Bisignani. 

Don’t make the ETS proposal any worse. In the meantime, Bisignani urged Europe not to include its misguided unilateral approach to aviation and ETS in the General Review process of the European ETS. “Don’t make a bad decision worse by including aviation in the ETS General Review. It makes absolutely no sense to review something that has not even started yet, let alone even consider raising auctioning levels beyond the current 15%,” said Bisignani.

View Bisignani's full speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 03 November 2008 No: 53


AERA is a Step in the Right Direction
- More Urgent Action on Taxation Needed -

New Delhi - The International Air Transport Association (IATA) welcomed the passing of the Airport Economic Regulatory Authority (AERA) bill by both houses of the Indian Parliament.

“AERA has an important role to play. Now that the parliament has approved, there is no time to waste in quickly setting-up and staffing the agency,” said Giovanni Bisignani, IATA’s Director General and CEO.
AERA’s role is to ensure that India’s aviation infrastructure meets cost-efficiency and service-level targets with charging policies in line with ICAO principles. “Timing is critical. First, the industry crisis makes cost-efficiency throughout the value chain more important than ever. And second, the increased role of private-public partnerships for infrastructure developments requires both solid ground rules and the ability to enforce them,” said Bisignani.

“ICAO principles call for transparency, non-discrimination and user-consultation. Even though India has a seat on the ICAO Council, today many of these principles are being ignored back in Delhi. There is a big gap to cover with little or no transparency in charges and differential pricing practices. Our best estimate is that the air navigation service provider over-collects by 20%. And the 33% price differential for international landings has no cost justification,” said Bisignani.

Bisignani also reiterated the need for reasonable taxation in India.

“The global crisis in aviation is deepening. India is one of the epicenters with potential losses of US$1.5 billion this year. AERA is a step in the right direction, but it is only part of the solution. To help reverse the state of the Indian air transport sector, we need a comprehensive policy approach in addition to establishing AERA. The most urgent is to address taxation, which is crippling the industry,” said Bisignani.

“The service tax on premium class tickets, air navigation charges, and landing & parking charges is contrary to ICAO’s resolution calling for a reduction of taxes.  Taxing overflight charges also breaches India’s international obligations,” said Bisignani.

“We welcome and commend the Ministry of Finance for scrapping the 5% import duty on fuel, and hope the Ministry will quickly address all the other taxation issues, including the 8% excise duty.  State governments must also understand that the situation is desperate, and deliver a fair solution on the excessive sales tax, which is as high as 30%. If not, they will need to share responsibility for the broader economic consequences of a failing industry,” said Bisignani.

Contact:
Albert Tjoeng
Manager, Corporate Communications for Asia & Pacific
tjoenga@iata.org
Tel: +65 6499 2286

Note for editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

 Date: 30 October 2008 No: 52

A Strong Air Transport Industry for Mauritius

Port Louis, Mauritius -The International Air Transport Association (IATA) urged Mauritius to take a leading role in air transport liberalisation, efficiency and environment issues.

“Air transport brings enormous economic benefits. Nowhere is that more evident than in Mauritius where air transport is the backbone of the tourism industry. As a result, Mauritius has taken a leadership role in global aviation,” said Giovanni Bisignani, IATA’s Director General and CEO in a speech to key policy-makers and the business community. Bisignani noted the need for change to support effective approaches to the financial and environmental aspects of sustainability.

After losses of US$42 billion between 2001 and 2006, the airline industry returned a US$5.6 billion profit in 2007, equal to a 1% return. IATA forecasts the industry will post a global loss of US$5.2 billion 2008. The return to the red is a result of extraordinarily high oil prices in the first three quarters of the year, and fall-off in demand beginning in July-August. Last week IATA announced global traffic figures for September showing a 2.9% decline in passenger traffic and a 7.7% drop in cargo. “What we are gaining from lower oil prices, we are suffering in reduced revenues as the credit crunch evolves into a global economic crisis,” said Bisignani.

At the IATA Annual General Meeting held in Istanbul in June, IATA’s 230 member airlines issued a declaration calling for broad change in all aspects of the industry, to match airline efforts that have seen a 19% improvement in fuel efficiency, an 18% drop in non-fuel unit costs and a 25% decrease in sales and marketing unit costs. The Istanbul Declaration urged labour to understand the need for change, monopoly service suppliers to improve efficiencies and governments to regulate monopolies, improve infrastructure and expand commercial freedoms.

Bisignani noted the leadership role that Mauritius is playing in key aspects of change:

Liberalisation: “Mauritius brought a great story to our Agenda for Freedom summit this past weekend. The courageous decision of the Government in 2006 to open its aviation market invited new competition that boosted tourism and strengthened the national carrier. This shows that carefully planned liberalisation can deliver broad economic benefits even in the case of isolated island nations where the national carrier plays a critical role in national development. Mauritius brought a unique perspective to the meeting and is a great example for other governments to follow,” said Bisignani. The Mauritius delegation at the ground-breaking summit was led by Vice Prime Minister Duval. The summit started a process of working towards increased commercial freedoms in the areas of market access and ownership while maintaining a level playing field for airlines to compete fairly. The goal is to modernise the 60-year-old bilateral system that governs international air transport to create a stronger industry that can even better fulfil its role in economic development.

Efficiency: “Mauritius has played a leading role in IATA’s Simplifying the Business (StB) programme. On 4 October 2008 the IATA e-freight programme went live between Mauritius and London. Mauritius is the first African state to take such a leading role modernising cargo processing by driving paper out of the processes,” said Bisignani. IATA e-freight will deliver US$1.2 billion in savings by replacing paper with electronic documentation. Air Mauritius is bringing the benefits of StB to make Mauritius a more convenient and more competitive destination for both cargo and passenger traffic. “Air Mauritius met the e-ticketing deadline in June, it is using bar coded boarding passes. And it is looking at implementing common-use self service kiosks for check-in,” said Bisignani.

Environment: “Environment is the greatest political challenge facing the planet. Aviation is 2% of global carbon emissions. Aviation is a small part of the problem and we are determined to be a part of the solution,” said Bisignani. IATA’s four pillar strategy to address climate change focuses on technology, operations, infrastructure and positive economic measures. “Too many governments only see a pot of green gold in their approach to environment issues. So we get tax after tax with no coordination.

For island nations dependant on tourism this can have serious negative impacts. When the UK doubled its long-haul Air Passenger Duty to GBP 40, vacations to Mauritius become more expensive. Even as the UK contemplates further increases, Europe finalised plans to bring aviation into its Emissions Trading Scheme commencing in 2012 at a cost of EUR 3.5 billion. IATA is not against emissions trading. Economic measures are part of our four pillar strategy. However, this is a global issue that needs a global solution. In line with the Kyoto Protocol, I look for Mauritius to support a global solution brokered through ICAO and its Group on International Aviation and Climate Change (GIACC),” said Bisignani.

“The aviation industry is in a crisis and change is critical to build a sustainable future. That means commercial freedoms, efficiency, realistic taxation and an effective approach to environment. Mauritius is playing a role on the world stage in helping to drive many of these changes. At the same time I urge the government to re-consider the costs that it is adding to the industry with taxes and charges, including the Maurice Ile Durable tax and the State Trading Corporation transfer fee charged on fuel. Together they are nearly a US$12 million disincentive for tourism,” said Bisignani.

“With the right policy framework, aviation is a sustainable development mechanism. In Africa, aviation supports 430,000 jobs and US$9.2 billion in economic activity. And for every 10% increase in air transport utilisation, there is a 1% boost to GDP. I look forward to aviation continuing to play a strong role in the sustainable development of this great country - Mauritius,” said Bisignani.

View Bisignani's full speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 26 October 2008   No: 51

Successful Agenda for Freedom Summit Concludes

Istanbul - The International Air Transport Association (IATA) successfully concluded the Agenda for Freedom Summit. A total of 14 nations plus the European Commission attended the weekend meeting in Istanbul which focused on ways to further liberalise market access and ownership and control rules governing international civil aviation.

“This has been an extra-ordinary year for airlines. From oil prices that peaked at US$147 in July, to today’s global financial crisis, the need for airlines to have the commercial tools that other industries take for granted has never been more critical,” said Giovanni Bisignani, IATA’s Director General and CEO.

The goal of the Agenda for Freedom Summit was to find ways to expand the commercial freedoms of airlines, namely access to markets and to global capital. The meeting did not set out to sign any agreements or declarations.

“The conference was a success. The states had a very frank and open discussion on ownership and market access. We had gathered 15 of the most liberal players in aviation policy and three key outcomes emerged. The participants asked IATA to continue to facilitate this discussion with a second meeting in early 2009 to turn the discussion into action. They also asked IATA to facilitate the development of a multi-lateral statement of policy that would be a powerful tool expressing the common thinking and approach of the group of states. Finally, the group agreed to spread best practices in liberalisation by making more openly available to all states the most liberal agreements that are being negotiated,” said Bisignani.

Bisignani emphasised the need for states to act with urgency. “Look at what happened to the banking system. In a week it became a state enterprise in many countries. We have already seen the re-nationalisation of Aerolineas Argentinas. This is not the solution that we want. We are not asking for bailouts or more government involvement in our business. Governments have a critical role in regulating safety, security, monopolies and environmental standards. What we were asking for this weekend was simply the ability to act like any other global business,” said Bisignani.

“The industry is in crisis and the message for change is critical. I believe that our message resonated with governments. We have started a process that I am confident will help to build a more stable financial future the air transport industry,” said Bisignani.

The Agenda for Freedom Summit was a follow-up to the Istanbul Declaration, signed by IATA’s 230 member airlines, which, among other things, called for expanded commercial freedoms. The meeting was chaired by Mr. Jeffrey Shane, former Under-Secretary of Transportation for the United States of America and Partner, Hogan & Hartson.

View Giovanni Bisignani's full speech
View Chairman's Summary

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org
 
Notes for Editors:
In advance of the meeting, IATA circulated a paper among governments with some proposals that could be quickly implemented to expand market access and access to global capital. A summary of the proposals is available at www.iata.org.
The following participated in the summit: Australia, Brazil, Canada, Chile, India, Panama, Mauritius, Morocco, Singapore, Switzerland, Turkey, the United Arab Emirates, the United States of America, Vietnam and the European Commission.


Date: 24 October 2008   No: 50

IATA Blasts EU ETS Decision

Istanbul - The International Air Transport Association (IATA) blasted the decision of the European Council of Justice and Home Affairs Ministers for rubber stamping - and sealing into law - Europe’s decision to bring air transport into the European Emissions Trading Scheme (ETS) from 2012.

“Crisis is not the time for rubber stamps. But that is exactly what the Council of Justice and Home Affairs Ministers used today - without a word of debate - to seal into law the EUR 3.5 billion cost of bringing airlines into the European ETS. It’s Brussels acting in a bubble - even in the middle of a global economic crisis,” said Giovanni Bisignani, IATA’s Director General and CEO.

“IATA does not oppose emissions trading. Positive economic measures are part of the industry’s four pillar strategy to address climate change. Along with economic measures, we need to improve efficiency with technology, operations and infrastructure.  While Brussels has been fast to introduce its regional ETS scheme, it has been slow to improve efficiency. We need the same urgency to deliver an effective Single European Sky that would save billions of Euros in cost and 16 million tonnes of CO2 annually. That we have been waiting decades for this is Europe’s biggest environmental embarrassment,’ said Bisignani.

Bisignani highlighted the need for a global approach that is fair and effective. ”In the most recent G8 declaration, Prime Minister Berlusconi, Prime Minister Brown, Chancellor Merkel and President Sarkozy  supported ICAO’s leadership to deliver a global solution for aviation and the environment. Now we need to see some supporting action. The best way to a global solution is through ICAO’s Group on International Aviation and Climate Change (GIACC). Brussels must support the success of this process,” said Bisignani.

IATA also noted the inclusion of aviation in Europe’s general review of its ETS programmes.  “Reviewing the effectiveness of emissions trading where programmes have been operational has value. But what enlightened decisions can we expect from a review that will conclude even before today’s decision takes effect in 2012?” questioned Bisignani.  “Far better that we address this on the basis of experience than speculation.”
 
Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org
 
Notes for Editors:
IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.


 Date: 24 October 2008   No: 49

Alarming Drop for September International Traffic

Istanbul - The International Air Transport Association (IATA) announced global international traffic results for September. Passenger traffic declined 2.9% while cargo traffic dropped 7.7% compared to the same month in 2007. International load factors tumbled by 4.4% percentage points from August to 74.8% in September.

“The deterioration in traffic is alarmingly fast-paced and widespread. We have not seen such a decline in passenger traffic since SARS in 2003,” said Giovanni Bisignani, IATA’s Director General and CEO. “Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand.  At this rate, losses may be even deeper than our forecast US$5.2 billion for this year,” said Bisignani.

Passenger

This is the first time since the SARS crisis in 2003 that global passenger traffic has shrunk. Capacity cuts were not able to keep pace with the fall in demand. September load factors in all regions fell compared to August.

For September, all major regions reported that passenger traffic shrank, with the exception of Latin American carriers which saw an increase of 1.7%. Even this is shockingly down from the 11.9% growth of the previous month.

Up to August, the drop in international passenger traffic was isolated to Asia Pacific carriers. The economies of the region’s two major growth markets - China and India - slowed and Japan saw industrial production drop 5% in August. The sharp downturn in world trade disproportionately impacted Asia-Pacific carriers with a 6.8% drop in traffic in September.

The steady 5% international growth of North American carriers turned into a 0.9% contraction.

European carriers saw traffic drop from last year (-0.5%) as the region’s economies head for recession.

After years of double-digit growth, passenger traffic by Middle Eastern carriers turned to a negative 2.8%. While the region’s oil-based economy remains strong, the large portion of transit traffic exposes the region’s carriers to the global economic weakness.

African carriers posted the largest decline in traffic (-7.8%), a continuation of the previous month’s trend.

Cargo

This is the worst decline since the technology bubble burst in 2001.

Declines in air freight have slowed year-to-date growth to 0.1%, with all regions except the Middle East and Africa reporting negative results.
The most alarming drop was with Asia Pacific carriers - the largest players in the market. The region’s carriers reported a 10.6% decline.

Europe and North American carriers, which had seen flat growth through August saw cargo traffic fall 6.8% and 6.0% respectively.

“The industry crisis is deepening - along with the crisis in the global economy. Airlines, like all other businesses, are facing enormous challenges. But unlike other companies, they are denied some basic commercial freedoms - access to markets and to global capital - that could help them manage their business in this difficult time,” said Giovanni Bisignani.

The web of 3,500 bilateral air service agreements that govern international air transport denies market access until specifically agreed. And the ownership clauses that are contained in these agreements preclude mergers across borders.

“Look at what the banking industry is doing. They are taking government handouts. They are accessing global capital. And we have seen mergers without anybody asking to see the investors’ passports. Airlines are not asking for handouts. But today’s crisis highlights the need for airlines to be able to run their businesses like normal global businesses,” said Bisignani from Istanbul on the eve of the Agenda for Freedom Summit.

IATA has taken the extra-ordinary step of facilitating a discussion among 15 progressive governments on the future regulatory structure of international air transport. IATA circulated a paper among these governments examining solutions within the bilateral system that could be quickly implemented to expand opportunities for access to markets and to global capital.

“I hope that the Agenda for Freedom Summit will conclude as a successful discussion that sparks a process of change by governments. We are not asking for anything other than the basic freedoms to do business that other industries take for granted,” said Bisignani.

View full September traffic results

More details on the Agenda for Freedom Summit

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org
 
Notes for Editors:
IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
Explanation of measurement terms:
RPK: Revenue Passenger Kilometres measures actual passenger traffic
ASK: Available Seat Kilometres measures available passenger capacity
PLF: Passenger Load Factor is % of ASKs used. In comparison of 2008 to 2007, PLF indicates point differential between the periods compared
FTK: Freight Tonne Kilometres measures actual freight traffic
ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)
IATA statistics cover international scheduled air traffic for airlines based in those markets; domestic traffic is not included.
All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised.
International passenger traffic market shares by region in terms of RPK are: Europe 32.8%, Asia Pacific 31.4%, North America 19.2%, Middle East 9.2%, Latin America 4.4%, Africa 2.3%
International freight traffic market shares by region in terms of FTK are: Asia Pacific 44.7%, Europe 27.2%, North America 17.2%, Middle East 7.7%, Latin America 2.1%, Africa 1.1%


Date: 22 October 2008 No: 48

No Bounds on Industry Crisis
Arab Carriers Urged to Focus on Efficiency and Commercial Freedoms

Tunis - The International Air Transport Association (IATA) urged Middle East and North Africa (MENA) airlines to focus on an agenda of efficiency and expanding commercial freedoms.

“The oil price is falling, but what we save in fuel, we lose in revenue. This industry will lose US$5.2 billion this year. Even the Middle East is not immune. The region’s carriers posted 18.1% traffic growth in 2007. This year, August growth plummeted to 4.3%,” said IATA Director General and CEO, Giovanni Bisignani, in a speech at the Annual General Meeting of the Arab Air Carriers Association (AACO).

“Profits of Middle East carriers will fall from US$300 million in 2007 to US$200 million this year. Only a handful of carriers will be profitable, while the majority bleed red ink. The region’s fleet is set to double to 1,300 aircraft over the next decade as we enter a period of global economic uncertainty. The challenge of matching capacity to demand will be difficult,” said Bisignani.

Bisignani urged the region to adopt an agenda focused on efficiency - Simplifying the Business, fuel and infrastructure - and expanding commercial freedoms.

Infrastructure: MENA is beginning to experiment with airport privatisation. Jordan, Saudi Arabia and Egypt have given concessions to run their airports to management consortiums. Bisignani issued a stern warning to avoid the monopoly abuse that occurred in other regions when similar moves were made. “Just look at what happened in Quito. The concessionaire ignored ICAO principles and raised rates by 128% to pre-finance airport construction. You don’t want this type of monopoly abuse here. As you privatise, strong independent regulators to enforce ICAO principles and deliver cost-efficiency are a must,” said Bisignani.

Simplifying the Business: “MENA carriers met the e-ticketing deadline with a jump from 16% e-ticketing to 100% in just 18 months. This great effort shows what the region can achieve,” said Bisignani. Bisignani warned that the region must speed up in order to enjoy the cost-efficiencies of e-freight. Only 10 out of 22 states in MENA have ratified the international conventions needed to recognise electronic invoicing - the starting point for e-freight. Bisignani called on MENA to be a leader in IATA’s Fast Travel and Baggage Improvement programmes. “The region is investing US$46 billion in infrastructure. This is a golden opportunity to build in leading edge processes and technology,” said Bisignani.

Fuel: “Fuel efficiency reduces costs and improves environmental performance,” said Bisignani. Already this year, IATA’s fuel campaign had identified and saved US$4.6 billion, equal to 13.5 million tonnes of CO2. IATA’s Four-Pillar Climate Change Strategy is focused on CO2 reductions with (1) investment in technology, (2) effective operations, (3) efficient infrastructure and (4) positive economic measures. Bisignani urged MENA governments to challenge Europe’s illegal and unilateral plan to incorporate aviation into its regional emissions trading scheme (ETS). “Europe’s governments have discovered a pot of green gold with aviation taxes. MENA must be tough in defending the vision of Kyoto which is a global solution for aviation brokered through ICAO. That means driving ICAO’s success through Saudi Arabia’s participation in the ICAO Group on International Aviation and Climate Change, challenging Europe’s unilateral action and delivering efficiencies in line with the four-pillar strategy,” said Bisignani.

Commercial Freedom: Bisignani urged MENA governments to support IATA’s efforts to facilitate greater commercial freedoms for air transport. “Airlines need to operate like any other business - with a level playing field, and the freedom to access markets and global capital,” said Bisignani. IATA is facilitating this discussion among progressive governments at the Agenda for Freedom Summit this weekend in Istanbul. “In MENA, we have seen pockets of progress, including open skies agreements and domestic liberalisation. Now the region’s governments must think bigger and act faster,” said Bisignani.
“The industry crisis highlights the need for change. MENA has some great advantages - strong oil economies, top-notch infrastructure and fuel-efficient fleets. The crisis is a turning point. We must deliver significant change with efficiency and commercial freedoms. If we can do that, I am confident that we can weather this perfect storm and emerge as a stronger and more profitable industry,” said Bisignani.

View Giovanni Bisignani's full speech
 
Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org
 
Notes for Editors:
IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.


Date: 15 October 2008 No: 47

Collective Madness
Travellers to Help Bail Out Bankers with New Departure Taxes

Geneva - The International Air Transport Association (IATA) criticised budget plans in Belgium and Ireland that mimic British and Dutch departure taxes as “collective madness.”

“Collective madness is the only way to describe the EUR 150 million Irish and EUR 132 million Belgian departure tax proposals. Filling budget gaps or financing government investment in the banking industry with gratuitous travel taxes is policy myopia at its worst,” said Giovanni Bisignani, IATA’s Director General and CEO.

On Tuesday, the Belgian and Irish governments announced plans to implement departure taxes in their new budgets. Combined with the proposed UK Aviation Duty and the recently implemented Dutch departure tax, by 2010 air travellers could face a tax burden of up to EUR 3.8 billion annually in these four counties alone.

“The timing could not be worse for governments to make mobility more expensive. Look at what has happened in fuel, the biggest cost item for airlines. Even with the recent drop, today’s price is still over 300% more expensive than it was only a few years ago,” said Bisignani.

“Rather than collective action to squeeze taxpayers, Europe’s governments should be looking to improve European competitiveness. An effective Single European Sky would save 16 million tonnes of CO2 annually and improve the competitiveness of Europe’s skies by over EUR 5 billion,” said Bisignani.

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org

Notes for Editors:
The Irish government announced plans to raise EUR 150 million annually with a tax to be applied to all passengers departing Irish airports commencing 30 March 2009.
The Belgian Finance Ministry confirmed plans to raise EUR 132 million annually with a similar tax, the details of which are yet to be decided.
Effective 1 July 2008, the Dutch Government began levying between EUR 11.25 and EUR45.00 on passengers departing Dutch airports to raise an estimated EUR 312 million annually.
The UK Government doubled its Air Passenger Duty in 2007 to collect GBP 2 billion (EUR 2.5 billion) annually. From November 2009, the UK Government is proposing to replace this with an Aviation Duty that will collect GBP 2.5 billion (EUR 3.2 billion) annually rising to GBP 3.5 billion (EUR 4.4 billion) by 2011/2012.
 


Date: 13 October 2008 No: 46  

Environment still a top priority even in times of crisis

Amsterdam - The International Air Transport Association (IATA) reiterated its commitment to its environmental programme at the inauguration of an aviation and environment display at Amsterdam’s Schiphol Airport.

“Environment remains a top priority, even in the middle of the current crisis hitting the air transport industry” said Giovanni Bisignani, IATA’s Director General and CEO. “Interests are aligned. Saving fuel improves environmental performance. And, in this crisis, every drop of fuel saved helps the bottom line,” said Bisignani.

IATA is leading the air transport industry’s efforts to address climate change and improve aviation’s environmental performance with a four pillar strategy: invest in new technology, fly planes effectively, build and use efficient infrastructure and implement positive economic measures.

“Our vision is to achieve carbon-neutral growth on the way to a carbon-free future. More importantly we are delivering results towards this vision. Shortening routes, sharing best practices in fuel management and improving air navigation contributed to enormous CO2 savings.  Between 2004 and 2007 IATA saved 44.5 million tonnes of CO2 emissions, equal to US$7.7 billion in fuel costs. Already this year we identified and saved a further 13.5 million tonnes of CO2 equal to US$4.6 billion.” 

The exhibition looks at innovations that airlines are implementing to improve fuel efficiency. It also looks to future innovations, including biofuels and revolutionary concepts for airframe and engine design.

Bisignani noted that while the industry is delivering significant improvements to address its 2% contribution to global CO2 emissions, governments could do much more to facilitate even better results. “Governments think green and see cash. So we get tax after tax, conceived in the name of the environment, which rob the industry of the cash to invest in technology. And there is no guarantee that any of the funds collected will be invested in environment-related projects. Examples include the Dutch departure tax or Europe’s plan to bring aviation into its regional emissions trading scheme that will distort markets and create an international legal mess,” said Bisignani. 

“Positive economic measures are one pillar of our strategy - provided they are globally coordinated, fair and voluntary. The focus must be a global solution coordinated through the International Civil Aviation Organization (ICAO). That’s what the drafter of Kyoto envisaged. Now governments - including those in Europe - must make the ICAO process deliver successful results,” said Bisignani.

“This stand is a reminder of the potential for technical and operational achievements. The ‘to do’ list for governments is long. For Europe, at the top of the list is a Single European Sky. It could deliver 16 million tonnes of CO2 savings annually and shave over EUR 5 billion off the fuel bill. The technical solutions exist. But we’ve been waiting decades for governments to sort out the politics. It’s time for results,” said Bisignani.

View Giovanni Bisignani's full speech

Contact:

  • Anthony Concil
    Director Corporate Communications
    Tel: +41 22 770 2967
    Email: corpcomms@iata.org
  • Quentin Browell
    Assistant Director Aviation Environment
    Tel: +41 22 770 2555
    Email: browellq@iata.org 

Notes for Editors: 

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic. 
  • The IATA environment exhibition is touring European airports and is currently located at Amsterdam Schiphol for two months. The stand has been placed at Schiphol with the cooperation of Schiphol Airport, KLM and the Board of Airline representatives in the Netherlands (BARIN).
  • The stands consist of two curved, opposing panels forming a ‘tunnel’, suggestive of an aircraft engine. The visitor is guided on a remarkable journey from the inception of powered flight to the present day. This journey illustrates the key elements of IATA’s four-pillar strategy on the environment – focussing on technology, operations and infrastructure. Our journey extends to the future, exploring new technologies such as algae-based bio fuels, solar power and fuel cells that could provide the building blocks for developing a carbon emission-free plane in the next 50 years. 
  • The stands are 3 metres by 6 metres and are 2.1 metres high. The base language is English along with a second language that is changed for each location. Touch-screens and interactive models explore and explain issues such as alternative fuel sources, revolutionary concepts in airframe and engine design, the shortening of routes and operational improvements in the airline industry. The stand includes “Destination Zero” – essentially, ‘the film of the stand.’

Date: 09 October 2008 No.: 45

US Airport Slot Auctions Illegal And Unjustified

Washington - The International Air Transport Association (IATA) condemned the final rule issued today by the Bush Administration, which allows the government to confiscate and auction airport take-off and landing slots at New York’s airports as an ineffective and illegal way to alleviate flight delays.

“Today’s decision is incredibly disappointing. Rather than addressing the root-causes of congestion at New York’s airports, the Bush Administration is spending its last days in office single-mindedly pursuing an alleged free-market experiment at some of the globe’s most important aviation gateways,” said Giovanni Bisignani, IATA’s Director General and CEO.

“The Department of Transportation (DOT) is out of touch with reality. Substantially raising airline costs with an illegal scheme in the middle of a perfect storm of high oil prices and falling demand makes no sense. Consumers, airlines, airports and local communities all stand to lose from today’s decision,” said Bisignani.
 
Slot confiscation is almost universally opposed. “DOT has made it abundantly clear that it will ignore the nearly universal opposition to this slot confiscation plan by the international airline and airport community as well as the U.S. Congress. The U.S. Government Accountability Office has already concluded it is an illegal scheme. The industry is now forced to use the U.S. judicial system to get the Government to accept its own advice,” said Bisignani.

Proven methods to manage congestion exist. “DOT ignored 60 years of internationally accepted and proven slot management procedures contained in the IATA Worldwide Scheduling Guidelines (WSG). Over 140 airports around the world use these guidelines to effectively manage congestion while maintaining a level playing field for airlines to compete,” said Bisignani.

Notes for Editors:


Date: 30 September 2008 No: 44

Traffic Slowdown Continues

Asia leads August decline

Hanoi - The International Air Transport Association (IATA) released international traffic data for August that confirmed a continuing downturn.   

International passenger demand growth slowed to 1.3%, following disappointing growth of 1.9% in July. Passenger load factors fell to 79.2% a sharp drop-off from the 81% recorded during the same period last year as capacity growth outpaced demand.

International freight traffic saw its third consecutive month of contraction with a 2.7% decline following drops of 1.9% in July and 0.8% in June.

“Passenger traffic grew by 5.4% in the first half of the year. That slowed to 1.9% in July and 1.3% in August. The contrast between the first half of the year and the last two months is stark,” said Giovanni Bisignani, IATA’s Director General and CEO. “The slowdown has been so sudden that airlines can’t adjust capacity quickly enough. While the drop in the oil price is welcome relief on the cost side, fuel remains 30% higher than a year ago. And with traffic growth continuing to decline, the industry is still heading for a US$5.2 billion loss this year.”

Air freight has declined for the past three months, led by Asia Pacific carriers that posted a 6.5% decline in July and a 6.8% decline in August. “Airlines carry 35% by value of the goods traded internationally. The three-month decline - led by weakness in Asia-Pacific markets - is a clear indication that global trade is slowing down. This shows that the impact of the financial crisis is broad geographically and will worsen before it gets better,” said Bisignani. 

Passenger

  • Asia Pacific carriers reported a 3.1% contraction, following a 0.5% decline in July. Economic distortions surrounding the Olympics in China and a weakening Japanese economic outlook contributed to the decline. While some recovery in this weak performance is expected in coming months, clearly the region’s economies are feeling the impact of the turmoil in the financial markets. 
  • Middle Eastern carriers saw traffic growth drop to 4.3% following 5.3% in July and well below the 10.6% growth recorded during the first 6 months of the year. 
  • In contrast, international passenger traffic carried by North American airlines accelerated from 4.2% growth in July to 5.2% in August, in Latin America from 8.1% to 11.9% and in Europe from 1.3% to 1.6%.
  • August is usually the second strongest month of the year, but the 79.2% load factor achieved was 1.8% points lower than last year although scheduled capacity is planned to slow very sharply to the point where it barely grows by the end of the year. 

Cargo

  • The 6.8% decline in international freight shipped by carriers in the Asia Pacific region had the greatest impact as they comprise 45% of the global air cargo markets. 
  • The other big market players also showed weakness. European carriers experienced a 0.9% decline, while US carriers reported weak growth of 0.8%.
  • Sharp declines in freight traffic in Latin America (-13.2%) reflect restructuring in Brazil with cuts in capacity.

“The industry crisis is deepening and no region is immune. Urgent measures are needed. From taxation to charges and operational efficiencies, all areas impacting the business must be examined for ways to reduce costs and drive efficiencies. It’s a matter of survival,” said Bisignani. 

Bisignani noted significant progress in Brazil where a Presidential approval for the removal of a fuel tax for international flights was published on 26 September. “After a two-year campaign, this is great news and the US$411 million savings over the next four years could not be better timed. The challenge is for other governments to follow Brazil’s example, conform with global standards and free the industry of crazy taxation. This is particularly true of India. Its carriers will post the largest losses outside of the US - US$1.5 billion this year - and they are being crippled by enormous taxation on fuel, particularly in domestic markets,” said Bisignani.

View full August traffic results

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic. 
  • Explanation of measurement terms: 
  • RPK: Revenue Passenger Kilometres measures actual passenger traffic 
  • ASK: Available Seat Kilometres measures available passenger capacity 
  • PLF: Passenger Load Factor is % of ASKs used. In comparison of 2008 to 2007, PLF indicates point differential between the periods compared 
  • FTK: Freight Tonne Kilometres measures actual freight traffic 
  • ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo) 
  • IATA statistics cover international scheduled air traffic; domestic traffic is not included. 
  • All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised.
  • International passenger traffic market shares by region in terms of RPK are: Europe 32.8%, Asia Pacific 31.4%, North America 19.2%, Middle East 9.2%, Latin America 4.4%, Africa 2.3%
  • International freight traffic market shares by region in terms of FTK are: Asia Pacific 44.7%, Europe 27.2%, North America 17.2%, Middle East 7.7%, Latin America 2.1%, Africa 1.1%

Date: 24 September 2008  No: 43

Priorities For Indian Aviation

New Delhi - “The global crisis resulting from high oil prices and declining traffic is hitting India hard.  Growth has slowed from 33% in 2007 to 7.5% for the first six months of this year. And the last two months have been negative. Indian carriers could post US$ 1.5 billion in losses in 2008, the largest outside the US.  Urgent action is needed to help Indian carriers weather the perfect storm of high costs and falling demand,” said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).

Bisignani identified three priority areas – reducing costs, improving infrastructure, and adopting global standards – in his address to the Confederation of Indian Industry (CII). 

Costs: “India is among the most expensive places on the planet to buy aviation turbine fuel (ATF). In August, it was 58% more expensive to buy fuel in Mumbai (for domestic flights) than in Singapore (for international). Excise duties, throughput fees charged by airport operators and state taxes of up to 30% for domestic flights result in a cost structure that cannot support a competitive industry. Removing excise tax, implementing a standard 4% state tax for domestic fuel and greater transparency in overall pricing are urgently needed,” said Bisignani. 

Bisignani took note of India’s Service Tax on premium class tickets, overflight, landing and airport charges.  “Taxing overflight charges breaches India’s international obligations under the Chicago Convention.  Taxing premium class tickets and airport charges is contrary to the International Civil Aviation Organization’s (ICAO) resolution 8632 calling for reductions in taxes.  These are embarrassments for a country that is a long-standing member on the ICAO Council.” 

Bisignani also questioned the lack of transparency in India’s airport and air traffic control costs.  There is an estimated 20% over-collection for air traffic control, while international operations are charged 33% more than domestic flights to land at India’s airports. “India must not waste any more time in establishing an effective Airport Economic Regulatory Authority (AERA) to achieve cost efficient infrastructure and bring India’s charges in line with ICAO charges policies,” said Bisignani.

Infrastructure: “Infrastructure investments are urgently needed. While Delhi is moving towards the capability of handling 100 million passengers, the situation at Mumbai remains critical. There is no possibility to build an additional parallel runway. The Greenfield site under consideration with a phase one capacity of 10 million passengers a year will provide some relief, but it is not a serious long-term solution. Mumbai needs an airport that can adequately serve the financial capital of the world’s second most populous nation. That means thinking much, much bigger. We must use the breathing space of the current downturn to plan for capacity in the 100 million passenger range for Mumbai, like airports in Delhi, Seoul, Hong Kong, Dubai and other important cities,” said Bisignani.

Standards: “Global standards have played a crucial role in the development of air transport and should be at the heart of India’s aviation policy and commercial development.  But India has taken a major diversion in security.  The non-standard data transmission requirements for Advance Passenger Information (API) is an added cost burden that provides no additional benefit.  This is a serious flaw for India’s API at a time when increased cooperation is needed,” said Bisignani.

Bisignani also called on India to take a leadership role in shaping aviation policies, including environment and commercial freedoms.  “In a few years, Asia Pacific will be the largest single aviation market. India is a key driver of that growth. India’s enormous size makes it an important market. It also gives it a responsibility to take a leadership role on policy issues. India must be a strong voice for a global solution on the environment, as envisioned by Kyoto. And it must look beyond its borders to be a strong voice for global change and greater commercial freedoms,” said Bisignani.

“I am an India optimist, but my biggest concern is speed. Aviation is a fast-changing industry that is fueling much of the Indian economic success story. But the crisis is highlighting that India’s decision making is too slow. India is not just a great market. It must also be a great leader. Minister Patel has done a great job in liberalising the industry and setting the wheels in motion for the rapid development of aviation in India. The benefits are clear: connecting business to markets, expanding tourism and creating jobs. Now it is the responsibility of entire government to follow up by addressing the issues of today’s crisis with quick decisions based on global standards and build a solid platform for future expansion,” said Bisignani.

View Giovanni Bisignani's speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 09 September 2008  No: 42

IATA, EUROCONTROL and CANSO Commit to Efficiency Plan

Montreal - The International Air Transport Association (IATA) signed a three-party commitment to a Flight Efficiency Plan with EUROCONTROL, and CANSO (Civil Air Navigation Services Organisation).

The aim of the plan is to expedite efficiency improvements in European air traffic management to achieve annualised savings of 470,000 tonnes of fuel per year in a six-month work programme. This will save EUR390 million and reduce CO2 emissions by over 1.5 million tonnes.

“The air transport industry is in a perfect storm of high fuel costs and falling demand. Airlines are expected to lose US$5.2 billion this year and another US$4.1 billion next. Saving fuel is critical to survival and to improving environmental performance,” said Giovanni Bisignani, IATA’s Director General and CEO.

“Saving fuel must be a team effort,” said Bisignani who signed the agreement with Alexander ter Kuile, Secretary General of CANSO and David McMillan, Director General of EUROCONTROL in Montreal. All three were attending a symposium on future air traffic management organised by the International Civil Aviation Organization (ICAO).

The Flight Efficiency Plan focuses on improvements in five areas:

  1. Enhancing en-route airspace design to optimise distances flown. A potential reduction in distance flown of 0.1% has been identified (equivalent to 4 million nautical miles per year) with potential savings of EUR20 million per year.
  2. Improving airspace utilisation with enhanced civil/military cooperation and better coordination of flight planning. Potential reductions in distance flown of 0.7% have been identified (equivalent of 30 million nautical miles per year) with potential savings of EUR150 million per year.
  3. Improved terminal area procedures, including continuous descent approaches (CDA). Implementing CDA at even 20% of Europe’s airports would save EUR100 million annually.
  4. Improved airport operations, particularly reducing taxi times. A one minute reduction in taxi times at Europe’s 50 top airports would save EUR120 million annually.
  5. Improving awareness of best practices to save fuel.

The plan comes in addition to the substantial efforts to improve the performance of the European Air Traffic Management Network.  Between 1999 and 2007, while traffic grew 25%, the total delays caused by lack of air traffic control capacity fell by 66%. At the same time, routes flown were shortened on average by approximately 4 km. Together these improvements generated 3.5 million tonnes of CO2 savings per year.

“Every drop of fuel saved improves environmental and financial performance. This joint effort by airports, air navigation service providers and airlines will deliver tangible results in a short time frame. It is a leadership example for others to follow,” said Bisignani.

View Giovanni Bisignani's full speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of international scheduled air traffic.

Date: 03 September 2008 No.: 41

Airlines to lose US$5.2 billion in 2008 - Slowing Demand and High Oil to Blame

Montreal - The International Air Transport Association (IATA) today announced a revised industry financial forecast that would see the global airline industry post losses of US$5.2 billion in 2008 based on an average crude oil price of US$113 per barrel (US$140 for jet fuel).

“The situation remains bleak. The toxic combination of high oil prices and falling demand continues to poison the industry’s profitability. We expect losses of US$5.2 billion this year,” said Giovanni Bisignani, IATA’s Director General and CEO.

Fuel

“While there has been some relief in the oil price in recent months, the year-to-date average is US$113 per barrel. That’s US$40 per barrel more than the US$73 per barrel average for 2007, pushing the industry fuel bill up by US$50 billion to an expected US$186 billion this year,” said Bisignani. Fuel is expected to rise to 36% of operating costs, up from 13% in 2002.

Demand

IATA also announced industry traffic data for July which showed a continued slowing of demand.

July year-on-year passenger demand growth fell to 1.9% - the lowest in five years. Capacity increased by double that - 3.8% - indicating that service cuts are not keeping pace with the fall in demand. This pushed the load factor for the month to 79.9%, a drop of more than 1% compared to July 2007. The surprise of July was a 0.5% drop in passenger demand by Asia-Pacific carriers partly attributable to a change in Chinese visa requirements but also showing that economic weakness is spreading to previously robust economies.

Cargo demand in July contracted by 1.9% compared to 2007. Asia-Pacific carriers - the largest players in the cargo market - were hit hard with a 6.5% drop in demand.
 
As a result of the weaker economic outlook, IATA significantly revised downward its traffic forecast for domestic and international markets combined. Passenger traffic is now expected to grow on average by 3.2% (was 3.9%) and air freight volumes by just 1.8% (was 3.9%). This is only half the pace of expansion seen in 2007 and is boosted by the stronger growth seen at the start of the year. Strong traffic growth allowed the industry to partly absorb the rise in fuel costs from 2003-2007. This is no longer the case.

Regional

“While some regions will show small profits, the negative impact of the industry crisis is universal,” said Bisignani. 

  • North American carriers are expected to post losses of US$5.0 billion in 2008 making them the hardest hit by this industry crisis. 
  • Asia Pacific is expected to see profits shrink from US$900 million in 2007 to US$300 million this year. 
  • European profits will tumble seven-fold from US$2.1 billion in 2007 to US$300 million in 2008. 
  • Middle Eastern profits will drop by US$100 million to US$200 million. 
  • Latin American and African carriers will see losses deepen to US$300 million and US$700 million respectively.

2009

IATA announced its initial outlook for 2009. The difficult business environment is expected to continue. Most economies are expected to deliver even weaker economic growth next year, which will negatively impact air travel and freight. With an expected oil price of US$110 per barrel (US$136 for jet fuel) and continued weak growth (2.9% tkp), industry losses are expected to continue at US$4.1 billion. The 2009 fuel bill is expected to rise, as hedging offers less protection, to US$223 billion comprising 40% of operating expenses.

Change

“While we expect the bottom line to improve by about US$1 billion next year, the industry will be US$4.1 billon in the red,” said Bisignani. “This crisis is re-shaping the industry in more severe ways than the demand shocks of SARS or 9.11. When fuel goes from 13% of your costs to 40% in seven years with an increased cost implication of US$183 billion, you simply cannot continue to do business in the same way. Fundamental change is needed,” said Bisignani.

“Airlines have reduced non-fuel unit costs by 18% since 2001. Airports and air navigation service providers must join the effort. Efficiency gains are critical but cannot fully absorb the impact of skyrocketing fuel prices,” said Bisignani.

“This crisis is highlighting the need for greater commercial freedom. Airlines are facing enormous challenges. To be successful and continue providing jobs to 32 million people and supporting US$3.5 trillion in economic activity, airlines must be able to do business like any other business,” said Bisignani.

“More airlines have gone bust in 2008 than in the aftermath of 9.11. To cure the structural sickness of the industry, made all the more obvious by the high price of oil, we need a strong dose of liberalisation. The US-EU talks later this month are one opportunity to address ownership restrictions in an important market. And IATA is taking the unusual step of facilitating a global dialogue on an Agenda for Freedom next month in Istanbul. Simply weathering the current storm is not an option. We must take the opportunity of these extraordinary times to facilitate extraordinary change to strengthen the industry with normal commercial freedoms,” said Bisignani.

Notes for Editors

  • An oil price of US$113 is the actual average oil price year-to-date.
  •  IATA’s previous forecast was made in June at a time of extreme volatility in the oil price. Exceptionally IATA forecast a range of industry losses between US$2.3 billion (based on a consensus oil price of US$106.5) and US$6.1 billion (based on an average oil price of US$122 which would have resulted, had the then current price of oil at US$135 per barrel held for the remainder of 2008).
  • View full Financial Forecast (pdf)
  • View full July traffic results

For more information, please contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org


Date: 20 August 2008 No.: 40

Leadership Challenges For Australia

Australia - The International Air Transport Association (IATA) challenged Australia to take a leadership role in three areas that are critical to aviation: security, environment and liberalisation. The call came from Giovanni Bisignani, IATA’s Director General and CEO, in a speech to the Australian National Aviation Press Club in Sydney.

“Oil prices are re-shaping the air transport industry. In recent months at least 25 airlines have gone bust and airlines could lose as much as US$6.1 billion this year. While prices have come down from their peak, oil is still trading above US$110 per barrel (Brent). Fundamental changes are critical,” said Bisignani.  “Australia’s National Aviation Policy Review is a golden opportunity for Australia to take a leadership role and drive change in security, environment and liberalisation.”

Security: “Aviation is much more secure today than in 2001. But the global system remains a US$5.9 billion uncoordinated mess because governments are not thinking or acting globally. Decisions driven by fear cannot build a more secure global air transport system. Governments must take a risk-based approach to security and harmonise with global standards,” said Bisignani. Specifically, Bisignani highlighted Australia’s requirement for screening at the gate at the last port of call as extra-territorial duplication resulting in added cost and confused passengers.

Environment: “The Kyoto protocol gave the International Civil Aviation Organization (ICAO) the responsibility for establishing a global framework for managing international aviation emissions (that will likely include an emissions trading scheme (ETS)). As a signatory to Kyoto, Australia has a responsibility to defend it. That means challenging Europe on its unilateral ETS. What right does Europe have to charge an Australian plane flying from Asia to Europe for emissions over Afghanistan?” asked Bisignani.

“Auctioning permits would set a very bad precedent. It raises several questions. With a focus on economic measures, where are the operational efficiencies? And why punish the good? Carbon intense industries with less impressive records of improvement are being given breaks that airlines are not. The impact on the competitiveness of Australian tourism must also be taken into account.  Anything that makes an Australian vacation disproportionately expensive is an incentive for tourists to go elsewhere. To maintain a level playing field, we need to keep focused on global solutions,” said Bisignani.

Commercial Freedoms: “Australia has the most liberal domestic market. It can play a key role in helping to modernise the antiquated 60 year-old bilateral system that governs international air transport,” said Bisignani. “In this time of crisis, the bilateral system with its restrictions on ownership must change. It’s time to move from the world of flags and politics to brands and business. Who cares who owns an airline as long as it is safe and provides efficient service? I believe that we can work through the bilateral system to allow airlines to do business like any other business with governments ensuring a level playing field. Governments must also effectively regulate safety, security, monopoly suppliers and environmental standards,” said Bisignani. Following the Association’s Istanbul Declaration in June, IATA is facilitating discussions among progressive governments at the Agenda for Freedom Summit to take place in Istanbul in late October.

“Thirty-two million people and US$3.5 trillion in business depend on an air transport industry that is safe, secure, environmentally responsible and financially sustainable. In this perfect storm of rising costs and falling demand growth, the courage to change will be the key to survival and to fulfilling this important responsibility,” said Bisignani.

View full speech

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

For more information please contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org


Date: 04 August 2008     No: 39

Freight Volumes Contract
Passenger Growth Hits Five-Year Low

Geneva - The International Air Transport Association (IATA) released international traffic data for June that showed a continued slowing of demand growth for air transport. Cargo contracted by 0.8% compared to June 2007. Passenger demand growth fell to 3.8%, the lowest level since 2003. Passenger load factors dropped to 77.6%, 1.2 percentage points below the 78.8% recorded for June 2007.

“The global economic turbulence clearly shows in the 0.8% drop in freight volumes compared to last year. Although the passenger demand grew by 3.8%, this is the slowest growth that we have seen since the industry was hit by the SARS crisis in 2003. With consumer and business confidence falling and sky-high oil prices, the situation will get a lot worse,” said Giovanni Bisignani, Director General and CEO of IATA.

Passenger

  • Global passenger traffic growth of 3.8% is well below the 5.4% recorded year-to-date.
  • Capacity growth of 5.5% outstripped demand, pushing the passenger load factor down to 77.6%
  • North American airlines saw demand growth drop to 4.4% (sharply down from the 8.2% growth recorded in May). Domestic traffic in the US contracted by almost 4%.
  • European airlines saw demand drop to 2.1% (compared to 4.1% in May). Declines in business confidence and industrial production in key European economies may well drive this further down.
  • Asia Pacific airlines saw their international passenger traffic growth fall to 3.2% in June from 4.5% in May, influenced by weakening long haul destination economies and inflation concerns.
  • Middle Eastern carriers saw their traffic growth slow to 9.6% June from 12.8% in May. This is sharply down from the 18.1% recorded in June 2007.
  • Latin American carriers turned in the strongest performance with 12.5% growth. Strong commodity-driven economic growth in Latin America is the driving force.

Cargo

  • International freight traffic declined -0.8% in June. This is the first decline seen since May 2005 and follows several months of falling manufacturing sector confidence indicators.
  • Asia Pacific airlines led the contraction with a -4.8% year-on-year decline for June traffic.
  • Latin American airlines recorded the largest contraction (12.7%) as the region’s cargo sector continues to re-structure its capacity.
  • European carriers saw freight demand growth fall to 0.7% in June from 1.4% in May.
  • North American carriers also saw freight demand growth slow to 4.0% in June from 4.6% in May.
  • Middle Eastern carriers delivered the strongest performance with 12.1% growth (up slightly from the 10.7% recorded in May).
  • African airlines recorded a -1.9% year-on-year decline in June.

“The airline sector is in trouble. Losses this year could reach US$6.1 billion, more than wiping out the US$5.6 billion that airlines made in 2007. Falling demand and rising costs are re-shaping the industry,” said Bisignani. “To survive the crisis, urgent action is needed. Airports and air navigation service providers must come to the table with efficiencies that deliver cost savings. Labour must understand that efficiency is the only path to job security. And governments must stop crazy taxation and give airlines the freedom to merge and consolidate where it makes business sense.”

View full June traffic results

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:

IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
Explanation of measurement terms:
RPK: Revenue Passenger Kilometres measures actual passenger traffic
ASK: Available Seat Kilometres measures available passenger capacity
PLF: Passenger Load Factor is % of ASKs used. In comparison of 2008 to 2007, PLF indicates point differential between the periods compared
FTK: Freight Tonne Kilometres measures actual freight traffic
ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)
IATA statistics cover international scheduled air traffic; domestic traffic is not included.
All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised from what was previously published.
International passenger traffic market shares by region in terms of RPK are: Europe 32.8%, Asia Pacific 32.5%, North America 19.0%, Middle East 9.1%, Latin America 4.4%, Africa 2.3%
International freight traffic market shares by region in terms of FTK are: Asia Pacific 45.0%, Europe 27.3%, North America 16.9%, Middle East 7.7%, Latin America 2.0%, Africa 1.1%


Date: 16 July 2008 No: 38

Taxes Don’t Reduce Emissions

Farnborough, UK - The International Air Transport Association (IATA) called on governments to abandon punitive environment taxes and instead support global environment solutions that will actually reduce aviation’s 2% of global carbon emissions.

“Taxes don’t reduce emissions. Only better operations and technology can do that,” said Giovanni Bisignani, IATA’s Director General and CEO, addressing the Farnborough International 2008 Sustainable Aviation Briefing.

“The airline industry is in crisis. With a fuel bill of US$190 billion – one third of its costs - saving fuel is a matter of survival. Still Europe is fixated on punitive measures supposedly designed to reduce emissions. There is a rush to implement taxes, taxes and more taxes. They all have an environment label, but do nothing to reduce emissions,” said Bisignani. He took aim at two punitive measures in particular:

UK Air Passenger Duty (APD): “By 2010 APD could be a GBP3.5 billion pot of honey for the UK Treasury. That’s enough to offset four years of the UK’s civil aviation emissions. The UK proposal will lead to market distortions. And governments - including the UK - are double counting. On top of APD, other countries such as the Netherlands also apply taxes. If this weren’t enough, the European Union emissions trading proposal will add another layer of penalties. What will all this do for the environment? Precious little. It’s time for some political honesty about where the billions are going and what they will achieve,” said Bisignani.

European Union Emissions Trading Scheme (ETS): “We support emissions trading, but Europe’s unilateral approach is wrong. Instead of cleaning up the environment, this will create an international legal mess. States outside Europe are already threatening legal action. Why should a US carrier have to pay Europe for emissions over US territory? Going global is the only way to success.  The drafters of the Kyoto Protocol understood this and tasked the International Civil Aviation Organization (ICAO) to deal with aviation and the environment. But this wisdom did not make it to the European Parliament. Even as France, Germany, Italy, the UK and the EU signed a G8 declaration reconfirming ICAO’s role in delivering a global solution, the European Parliament moved in the opposite direction by voting for a regional ETS. Good sense has been hijacked by uncoordinated green policies,” said Bisignani.

“States - including Europe - will make or break the ICAO process. ICAO strengthened its political leadership on the issue with a high level Group on International Aviation and Climate Change (GIACC). Europe, which can take the credit for placing climate change on the international aviation agenda, must now take responsibility to ensure that ICAO is successful,” said Bisignani.
IATA’s four-pillar strategy to address climate change focuses on technology investment, effective operations, efficient infrastructure and positive economic measures. This is now an industry commitment supported by airlines, manufacturers, airports, air navigation service providers and industry partners. “Now governments must play their role responsibly by taking the reality of US$140 oil into account, stopping their green grand-standing, and joining the industry’s global and comprehensive approach,” said Bisignani.

View Giovanni Bisignani's speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:
IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.


Date: 08 July 2008 No: 37

European ETS Vote: The Wrong Answer

Geneva – The International Air Transport Association (IATA) severely criticised today’s European Parliament vote to bring aviation into the European Emissions Trading Scheme (ETS).

“It’s absolutely the wrong answer to the very serious issue of environment,” said Giovanni Bisignani, IATA’s Director General and CEO. “We support emissions trading, but not this decision. Europe has taken the wrong approach, with the wrong conditions at the wrong time.”

The Wrong Approach: Europe’s unilateral and extra-territorial approach will apply ETS to all aircraft flying to or from Europe. Without international agreement this will only spark international legal battles. “What right does Europe have to impose ETS charges on, for example, an Australian carrier flying from Asia to Europe for emissions over the Middle East? Article 1 of the Chicago Convention prohibits this. And it goes against Article 2 of the Kyoto Protocol. Fuelling legal battles and trade wars is no way to help the environment. Already over 130 states have vowed to oppose it. The only successful way forward for ETS is as the drafters of Kyoto envisaged. That’s a global scheme brokered through the International Civil Aviation Organization (ICAO),” said Bisignani.

The Wrong Conditions: In its first year of operation, the ETS will add EUR3.5 billion to industry costs and this will rise year-on-year. There is no guarantee that any of the funds generated will be earmarked for environmental purposes. Today’s decision only indicates that revenues generated from the auctioning of allowances “should” be used to reduce greenhouse gas emissions.  “It’s the weakest possible language. The plain fact is that the only sure beneficiaries of the EUR 3.5 billion cost will be national government coffers. There is no assurance that any of the money will go to environmental programmes. It’s time for Europe’s politicians to be honest. This is a punitive tax put in place by politicians who want to paint themselves green. Worse, it’s not even part of a coordinated European policy. This tax will come on top of the UK’s Air Passenger Duty and the Dutch Air Passenger Tax. Rather than double or triple charging for emissions, governments should focus on solutions to improve environmental performance,” said Bisignani.

The Wrong Time: With oil trading above US$140 a barrel and jet fuel above US$170 per barrel, the industry fuel bill for 2008 will be at least US$190 billion. “Airlines are struggling to reduce fuel burn to survive. Adding an extra EUR 3.5 billion to industry costs will not produce any better results. If Europe is serious about environment, it would move forward quickly with the Single European Sky proposal. By the Commission’s own calculation, this would save up to 16 million tonnes of CO2, reduce delays and improve environmental performance,” said Bisignani.

Airlines are committed to effective measures to reduce the 2% of carbon emissions attributed to aviation. “Reducing fuel burn to improve environmental performance is a top priority. IATA’s four-pillar strategy to address climate change is now an industry commitment that does just that. Emissions trading is one small part of a comprehensive strategy that includes investing in technology, improving operations, building efficient infrastructure and using positive economic measures,” said Bisignani.

“Our focus is on results. Last year the strategy saved at least 10.5 million tonnes of CO2. Our target is a 25% improvement in fuel efficiency by 2020. And we are working towards carbon-neutral growth with a vision for a carbon-free future. Europe’s tunnel-vision focus on a unilateral, punitive and illegal ETS may help some government budgets, but it will do little if anything to improve environmental performance. It’s time for Europe to re-focus,” said Bisignani.

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 02 July 2008 No: 36

Air Freight Growth Dips Sharply

Geneva – The International Air Transport Association (IATA) released international traffic data for May that showed a significant drop in cargo growth to 1.3% while passenger traffic grew 6.0%.

At 1.3%, cargo demand is considerably down from the 4.3% recorded for the full year 2007. For the first five months of 2008, air freight volumes were up 2.8%. The biggest cause of the slow growth came from a 0.5% contraction in Asian carrier traffic. This resulted from the impact of the earthquake in China and weakness in the Japanese economy. Asian carriers also saw weakness in transpacific markets with increased competition from US carriers taking advantage of the weak US dollar.

International passenger demand grew 6% in May. This is slower than the 7.4% increase recorded for the full year 2007, but stronger than expected given the economic downturn. The results were skewed by a shift in the US of 1.7 billion available seat miles (2.72 billion available seat kilometers) from domestic routes to international routes (a 7.9% rise in capacity in international markets). North American carrier international traffic grew 8.2%, while domestic capacity fell 3.3%. Overall the underlying growth rate in global domestic and international traffic was 3 to 4% (down from an average of 6% for 2007).

International load factors rose slightly for the first time in three months to 74.3% on slower capacity growth of 5.4% during the month.

“The high price of oil is re-shaping the industry. The major shifts in traffic flows experienced during May reflect this,” said Bisignani, IATA’s Director General and CEO.

During May jet fuel averaged US$160 per barrel - 87% higher than the same time in 2007. By comparison, crude prices averaged US$123 per barrel - an 81% increase. “Jet fuel margins are increasing the impact of skyrocketing oil prices for the aviation industry. Unit costs are up 20-30% and that is going to take its toll on the bottom line. Efficiency everywhere is the imperative. That must be understood by governments, labour and our industry partners,” said Bisignani.

Cargo

North American cargo traffic grew 4.6% as US carriers shifted capacity from domestic to international routes. In addition to expanded transpacific opportunities, the US-EU Open Skies agreement created new opportunities in Europe.
Europe recorded a sluggish 1.4% increase. The strong Euro is damaging competitiveness for both European exports and the European air cargo business.
Latin America freight volumes contracted 13.2%. Industry restructuring saw the replacement of retiring wide-body aircraft with narrow-bodies with limited cargo capacity.
Africa recorded its 11th month of air freight contraction out of the past 12 months with a fall of 6.5% during May as industry restructuring removes freight capacity.
The lone bright spot was the Middle East where volumes rose 10.7% on the back of oil-based economic growth.

Passenger

Airlines in Latin America continued strong growth of 13.6% reflecting robust commodity-driven economic growth in the region. 
Middle Eastern airlines expanded their traffic 12.8%, lower than the 18.1% increase achieved for the full year 2007 due to slower economic growth in origin-destination regions using Middle East airports as connecting points. 
The further decline in traffic carried (-2.2%) and capacity provided (-5.1%) by African airlines  reflects a loss of market share and the reduction of unprofitable capacity in the face of high and rising fuel prices.
Reversing the trend of the previous three months, load factors rose slightly in May to 74.3% as high fuel prices are forcing cuts in capacity and the retirement of older aircraft.

View full May traffic results

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:
IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
Explanation of measurement terms:
RPK: Revenue Passenger Kilometres measures actual passenger traffic
ASK: Available Seat Kilometres measures available passenger capacity
PLF: Passenger Load Factor is % of ASKs used. In comparison of 2008 to 2007, PLF indicates point differential between the periods compared
FTK: Freight Tonne Kilometres measures actual freight traffic
ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)
IATA statistics cover international scheduled air traffic; domestic traffic is not included.
All figures are provisional and represent total reporting at time of publication plus estimates for missing data.
International passenger traffic market shares by region in terms of RPK are: Europe 32.7%, Asia Pacific 32.6%, North America 18.8%, Middle East 9.1%, Latin America 4.5%, Africa 2.3%
International freight traffic market shares by region in terms of FTK are: Asia Pacific 46.1%, Europe 25.9%, North America 17.2%, Middle East 7.4%, Latin America 2.2%, Africa 1.1%
 


 Date: 25 June 2008 No: 35

A Step Forward On SES

Geneva – The International Air Transport Association (IATA) congratulated the European Commission on adopting the second package of legislation for a Single European Sky (SES).

“Every drop of fuel saved counts. With oil at US$135 and jet fuel even higher, saving fuel is critical for financial survival. And it is at the core of our commitment to improving environmental performance. Today’s adoption of the Single European Sky II package is a welcome response to IATA’s call for governments to act quickly to eliminate inefficiencies in air traffic management,” said Giovanni Bisignani, IATA’s Director General and CEO.

At its recent Annual General Meeting in Istanbul, Turkey, the 230 members of IATA agreed an Istanbul Declaration that asks governments, labour and service providers to show leadership and responsibility in this time of crisis. The Declaration specifically called for governments to “invest to modernise air transport infrastructure urgently, eliminating wasteful fuel consumption and emissions.”

“Vice President Tajani has quickly understood the urgency of the situation. Commission adoption is a step in the right direction, but we have a lot of ground to cover before a Single European Sky can become a reality,” said Bisignani.

“Only with the support of national governments will the European Parliament and the Council be able to follow up on Vice President Tajani’s quick action. I urge Europe’s national governments to put aside local politics and focus on what is best for Europe and for the environment. That is a Single European Sky with the ambitious objective of a 10% improvement in carbon emissions and fuel savings. After decades of discussion, it’s time for success,” said Bisignani.

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:
IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.


Date: 25 June 2008 No: 34

Europe Must Abandon ‘Tunnel-Vision’ On Emissions Trading

Geneva – The International Air Transport Association (IATA) called on the European Council, the European Commission and the European Parliament to put aside their single-minded focus on emissions trading and deliver real progress in reducing aviation emissions with a Single European Sky.

“I urge the European Council, the European Parliament and the European Commission to support our successful strategy with concrete measures. And to stop plans to punish airlines and travellers with an ETS that will only invite international legal battles,” said Giovanni Bisignani, Director General and CEO of IATA.

“When it comes to aviation, Europe’s governments have lost the plot,” said Bisignani.  “Tunnel-vision on emissions trading is no solution at all. Airlines are working hard to reduce their 2% share of global carbon emissions. Europe is fixated on punitive measures. Unilaterally bringing aviation into the European Emissions Trading Scheme (ETS) seeks to limit mobility and adds EUR 4.2 billion to the cost of travel. But reducing emissions is more effective than charging for them.’’

Bisignani pointed to record fuel prices as strong industry incentive to reduce fuel burn and related emissions. “Europe’s ETS proposal was developed when oil averaged US$55 per barrel (Brent). Now oil is around US$135. Our 2008 fuel bill could be US$190 billion.’’

Bisignani called on Europe to drive a global approach to emissions trading. “Europe must show international leadership. The drafters of Kyoto envisaged a global ETS solution for aviation brokered through the International Civil Aviation Organization (ICAO) – a UN body. Europe’s unilateral regional scheme misses the mark. An ETS that is fair, global and compliant with international law could be effective. But only if it is part of a comprehensive programme to reduce emissions. Europe’s regional scheme is none of these. To survive the oil crisis, airlines are already doing everything possible to save fuel and reduce emissions.  So there is no additional incentive. Already over 130 countries have vowed to oppose it. And it puts 7.6 million aviation-related European jobs at risk with higher costs.” 

“It’s time to say BASTA. Enough. Europe must refocus. First, it must put aside its ETS proposal. Making decisions in the middle of an energy crisis for an ETS to be implemented in five years is crazy. Second, it must be honest. Emissions taxes may fill government coffers. But they do little for the environment. Third, Europe must find a comprehensive strategy that can reduce aviation emissions – even in the middle of a crisis,” said Bisignani.

IATA’s Four Pillar strategy designed to limit aviation’s impact on the environment – by investing in technology, flying planes effectively, building efficient infrastructure and implementing positive economic measures – has been endorsed by ICAO’s 179 member states and is delivering tangible results.

“The industry strategy is delivering results. Airlines will spend US$3 trillion to renew their fleets over the next 20 years. Our target is a 25% improvement in fuel efficiency by 2020.  IATA Green Teams worked with airlines to save 7 million tonnes of CO2 in 2007 through better flight operations. In 2007 IATA optimised 395 routes, saving 4 million tonnes of CO2. Our target is to eliminate the 73 million tonnes of unnecessary CO2 emissions caused by inefficient infrastructure. Europe is falling behind,” said Bisignani. “Tax credits for re-fleeting and research funding are essential measures. Industry increased its research spend and tested bio-fuels, solar power and fuel cells. By 2017 10% of our fuel will be from alternative sources. But OECD countries reduced their energy research budgets by 50% compared to 1980. This must change.”

“Uniting Europe’s 35 air navigation service providers into a Single European Sky is the biggest action that Europe could take to improve environmental performance – saving 12 million tonnes of CO2. Routes would be optimised and the 21 million minutes of delays experienced last year would be reduced. I challenge the French Presidency to work with the Commission to deliver a Single European Sky within its mandate,” said Bisignani.

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:
IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.


Date: 25 June 2008 No: 33

11 New Locations Earmarked for E-freight

Geneva – The International Air Transport Association (IATA) today announced that 11 new locations have been identified as ready for e-freight. These are: USA, Dubai, Luxembourg, France, Spain, Australia, New Zealand, Switzerland, Iceland, Denmark and Norway.

Since 2007, e-freight has been operational in six locations: Canada, Sweden, UK, Hong Kong, Singapore and the Netherlands. A further three - Germany, Mauritius and South Korea have launched projects to go live within 2008. Five of the 11 new locations will be selected to launch e-freight in 2008 with the remaining targeted for launch in 2009.

“The momentum to rid air cargo of costly paper processes is building quickly,” said Giovanni Bisignani, Director General & CEO of IATA. “Already we are live in six locations today. We will be operating at 14 locations by year-end.”

IATA e-freight requires that business, technical and legal frameworks are in place to allow airlines, freight forwarders, customs administrations and governments to seamlessly exchange electronic information and e-documents instead of paper. 

In the months ahead, teams of experts from participating airlines, freight forwarders, shippers and customs organisations in each location will create local implementation teams. Their efforts will be supported and guided by IATA standards, e-freight operating processes and one-time data entry.

“The industry is in crisis. Record fuel prices and sagging demand growth will drive an industry loss of US$2.3 billion during 2008,” said Bisignani. “We need to simplify and modernise our business. 100% e-ticketing was an important step forward. E-freight is another. It will deliver much-needed efficiency and US$1.2 billion in cost savings while responding to shippers’ demands for improved reliability and more speed.”

E-freight is one of six Simplifying the Business projects being led by IATA to improve service and cut costs. The industry has set a deadline of the end of 2010 for the implementation of e-freight where feasible.
 
More information on IATA e-freight

Contact:
Lorne Riley
Manager Corporate Communications
Tel: +41 22 770 2967
rileyl@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of international scheduled air traffic. 
  • IATA e-freight is live in 6 locations – Canada, Sweden, U.K., Hong Kong, Singapore and the Netherlands.
  • E-freight projects have recently been launched in Germany, Mauritius and South Korea.
  • IATA plans to have 14 locations operating e-freight by year-end.
  • Over the past 6 months, IATA has assessed the readiness of over 200 locations worldwide. Forty-three countries were found to have the appropriate international treaties and high level customs framework in place to qualify for e-freight.
  • The 43 locations that passed the initial high level assessment include: Australia, Austria, Belgium, Brazil, Bulgaria, People's Republic of China, Croatia, Cyprus, Czech Republic, Denmark, Dubai, Egypt, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Jordan, Latvia, Lithuania, Luxembourg, Malaysia, Malta, New Zealand, Norway, Peru, Poland, Portugal, Romania, Slovakia, Slovenia, South Africa, South Korea, Spain, Switzerland, Turkey, United States
  • Together with the original 6 e-freight sites (Canada, Sweden, Hong Kong, Singapore, the U.K. and the Netherlands) these locations handle 63% of global air-freight volumes.
  • A second round of more detailed assessments narrowed that down to 14 sites that are ready, willing and able to launch e-freight by the end of 2009.
  • IATA’s Simplifying the Business programme was launched in June 2004 with five projects – 100% Electronic Ticketing, the use of bar coded boarding passes, common use self service check-in (CUSS),  RFID for baggage management and e-freight.
  • Since its launch 2 projects have been completed (100% ET and RFID) and 2 new projects launched – Fast Travel and Baggage-management Improvement Programme.

Date: 19 June 2008 No: 32

IT Solutions Needed to Battle Crisis

Brussels – “IT must deliver solutions to drive down costs, improve passenger convenience and provide enhanced possibilities to maximise revenues. The industry fuel crisis that has plunged airlines back into the red means achieving these goals is critical to survival,” said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA). Bisignani made his remarks in the opening keynote address at the SITA Air Transport IT Summit.

Bisignani cited the success of IATA’s Simplifying the Business programme. “This IT revolution is well on the way to saving airlines US$6.5 billion annually. On 1 June we delivered 100% e-ticketing. Alone, that will save US$3 billion. Now we must look ahead to respond to passenger demands for more self-service options throughout the travel process. IATA’s Fast Travel will deliver a second revolution with baggage self-tagging, automated document checks, self-boarding and kiosks to handle irregular operations and mishandled baggage reporting,” said Bisignani.

Bisignani then pointed to the need for progress in several key areas:
GDSs: “Our partners in the value chain must deliver similar efficiencies to airlines,” said Bisignani, referring to Global Distribution Systems (GDSs). We worked together in the e-ticketing project that helped airlines reduce sales and distribution costs by 25%. But there is still a need for more change. Why can China TravelSky charge US$0.50 per segment while the western GDSs charge over US$4? The industry is in crisis and they must come to the table with better efficiencies or we will use other ways to distribute products,” said Bisignani.

Security: Bisignani also challenged governments to deliver better results with IT to improve security. “The industry is much more secure than it was in 2001. But too often we get more hassle than value for the US$30 billion that airlines and their passengers have paid in the last seven years. The IATA-led Simplifying Passenger Travel project is a solution to make security more effective, efficient and convenient with IT solutions. Governments must rise to the challenge by focusing on risk management, using available technology effectively, taking better advantage of security intelligence, harmonising global standards and taking responsibility for the bill,” said Bisignani.

Air Traffic Management and Operations: “IATA’s commitment to improving the industry’s good environmental performance reduced fuel burn and saved 10.5 million tonnes of CO2 and US$2.1 billion in 2007. This was achieved by shortening 395 routes and spreading best practice in fuel management. We welcome the commitment of the Civil Air Navigation Services Organisation (CANSO) at their annual meeting to deliver even greater efficiencies. IT also has a role. Providers like SITA have an important role in ensuring that operational systems make the best use of improved routings. We could do much more if governments came on board. A Single European Sky in Europe and NextGen air traffic management in the US would deliver enormous performance gains - as would harmonising air traffic management requirements globally,” said Bisignani.
“Everything is changing with the high price of oil. With fuel accounting for 34% of industry costs, airlines are feeling the impact more than most. Cost savings are crucial in every corner of the business, but there is not much low hanging fruit left. Critical decisions on everything from aircraft allocation based on cost, capacity and demand to making best use of new labour opportunities are needed. Those with state-of-the-art route planning systems fed with the best available market data will have a clear advantage. In the uncharted waters of oil at US$135, two things are certain. The imperative is to deliver more for less. And effective IT is essential,” said Bisignani.

View Giovanni Bisignani's speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic  

Date: 18 June 2008 No: 31

IATA Welcomes EC VP Tajani’s Single European Sky Priority

Geneva – The International Air Transport Association (IATA) congratulated Antonio Tajani on his confirmation as Vice President of the European Commission and Commissioner for Transport.

“Vice President Tajani has picked the right priorities, starting with delivering a Single European Sky (SES),” said Giovanni Bisignani, IATA’s Director General and CEO.  “We’ve been talking about a SES for decades. Now is the time to make it a reality. An effective SES would help alleviate two critical issues related to fuel burn. First, with oil in the US$135 a barrel (Brent) range, the industry fuel bill will balloon to over US$176 billion this year. Already we have seen 24 airlines go bust and thousands of layoffs. An effective SES would shave EUR5.5 billion off the fuel bill with more efficient air traffic management. And it would reduce carbon emissions from airlines by as much as 12 million tonnes. I am confident that Vice President Tajani will deliver the political will to turn the technical solutions into reality,” said Bisignani.

Bisignani also encouraged Vice President Tajani to weigh-in on Europe’s misguided debate on bringing aviation into the Emissions Trading Scheme (ETS). “First, the timing is wrong. Bringing aviation into Europe’s ETS was conceived when oil was at US$60 a barrel. Today, with the price more than double that, it’s a completely different world. If oil stays at the current price level for the next 12 months, airlines will face US$99 billion in extra fuel costs. Airlines have the biggest incentive of any industry to improve environmental performance. With jobs disappearing from the industry already, I hope that Vice President Tajani will bring a strong message that this is not the time for reckless decisions that could put more jobs at risk,” said Bisignani.

Bisignani emphasised the illegal nature of Europe’s unilateral approach. “All this effort at a time of crisis for something that is illegal makes no sense. Countries in the developed and developing world are opposed to Europe’s unilateral approach—and rightly so. What right does Europe have to charge non-European carriers for emissions outside European territory? I encourage Vice President Tajani to bring a strong reality check to his Commission colleagues:  the best thing that Europe can do to tackle the important issue of aviation and the environment is to facilitate a global solution through the International Civil Aviation Organization—a UN body with a proven track record of promoting global standards,” said Bisignani.

Bisignani noted that the aviation industry takes responsibility for its 2% of global carbon emissions seriously. “Our vision to achieve carbon neutral growth sets the benchmark for other industries to follow. And our four-pillar strategy based on technology, operations, infrastructure and positive economic measures is delivering results. Last year IATA’s efforts delivered 10.5 million tonnes of CO2 savings. If Vice President Tajani is successful with SES, we will deliver much more,” said Bisignani.

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

Date: 03 June 2008 No: 30

Royal Jordanian’s Majali is New IATA Chairman,
Cathay Pacific’s Tyler To Follow In 2009

Istanbul – The International Air Transport Association (IATA) announced today that Royal Jordanian Airlines CEO, Samer Majali, commenced his one-year term as the Chairman of the IATA Board of Governors.  Majali succeeds Fernando Pinto, CEO of TAP Portugal who served as Chairman from June 2007.

Majali, is a 29-year veteran of the air transport industry who has served as CEO of Royal Jordanian since 2001. He successfully led the airline through one of its most challenging periods as it prepared for a successful privatisation. Majali takes on the Chairman duties at a difficult time as the airline industry falls back into the red with fuel prices skyrocketing to unprecedented levels.

“With fuel prices at record highs, the industry faces a crisis and the agenda for the year ahead has extraordinary challenges. Change must be even more aggressive. Finding even more efficiency gains - not just for airlines but throughout the industry value chain - is crucial for our survival. We celebrated a great achievement - 100% e-ticketing. But there is no time to lose in pushing forward with the next phase of Simplifying the Business - Fast Travel,” said Majali.

Majali noted that change must also involve governments. “In the unexplored territory of astronomical fuel prices, the environment debate takes on a completely new dimension. The incentive for airlines to improve performance has never been bigger, but governments stand in our way. They must overcome their obsession with punitive and unilateral emissions trading schemes and start working on real solutions to reduce CO2. A Single European Sky is critical. Equally important is the Agenda for Freedom. To fight the many crises that beset this industry, we must liberalise. Airlines need the same commercial freedoms that almost all other businesses enjoy to manage risk and grow our businesses into truly global enterprises,” said Majali.

Giovanni Bisignani, IATA Director General and CEO said, "First, we must thank Fernando Pinto for a job well done. His leadership over the past year helped us reach our goal to eliminate paper tickets. I am confident that Samer will provide a unique perspective and great leadership to help us deal with our growing challenges in the world of US$130 oil.”

IATA also announced the Board of Governors agreed to appoint Tony Tyler, Chief Executive of Cathay Pacific to serve as Chairman following Majali, commencing in June 2009. Tyler will bring a unique perspective from Asia-Pacific, which will soon become the largest aviation market in the world. 

The announcements were made as the IATA Annual General Meeting and World Air Transport Summit concluded in Istanbul today. The 900 delegates gathered for the event discussed the industry's most important issues, with executive briefing sessions on the environment and industry innovation.  Full content of the briefings is available on: www.iata.org/agm2008.
 
Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org

Notes for Editors:
Among the last orders of business at the 2008 AGM was approval for the next World Air Transport Summit and IATA Annual General Meeting to be held in Kuala Lumpur, Malaysia in June 2009. "We appreciate the kind offer of Idris Jala, CEO of Malaysia Airlines to meet in Kuala Lumpur next year - a vibrant economic and cultural centre," said Bisignani.
Membership of the Board of Governors at the close of the 64th Annual General Meeting:
Mr Valery M. Okulov, Chairman and Chief Executive Officer, Aeroflot
Mr Jean-Cyril Spinetta, Chairman and Chief Executive Officer, Air France
Mr Willie Walsh, Chief Executive Officer, British Airways
Mr Fernando Conte, Chairman and Chief Executive Officer, Iberia
Mr Peter Hartman, President and Chief Executive Officer, KLM
Mr Wolfgang Mayrhuber, Chairman and Chief Executive Officer, Lufthansa AG
Mr Christoph Franz, President and Chief Executive Officer, SWISS
Mr Fernando Pinto, Chairman and Chief Executive Officer,TAP Portugal
Mr Temel Kotil, President and Chief Executive Officer, Turkish Airlines
Mr Montie Brewer, President and Chief Executive Officer, Air Canada
Mr Gerard Arpey, President and Chief Executive Officer, American Airlines
Mr David Bronczek, President and Chief Executive Officer, Fedex Express
Mr Douglas Steenland, President and Chief Executive Officer, Northwest Airlines
Mr Glenn F. Tilton, Chairman, President and Chief Executive Officer, United Airlines
Mr Andres Conesa, Chief Executive Officer, Aeromexico
Mr Pedro Heilbron, Executive President and Chief Executive Officer, Copa Airlines
Mr Enrique Cueto, Chief Executive Officer, LAN Airlines
Mr Tony Tyler, Chief Executive, Cathay Pacific Airways
Mr Liu Shaoyong, Chairman, China Southern Airlines
Mr Haruka Nishimatsu, President and Chief Executive Officer, Japan Airlines
Mr Naresh Goyal, Chairman, Jet Airways (India) Ltd.
Mr Yang Ho Cho, Chairman and Chief Executive Officer, Korean Air
Datuk Idris Jala, Managing Director and Chief Executive Officer, Malaysia Airlines
Mr Geoff Dixon, Chief Executive Officer and Managing Director,Qantas Airways Limited
Mr Chew Choon Seng, Chief Executive Officer, Singapore Airlines Limited
Mr Sanjay Bhuckory, Chairman, Air Mauritius
Captain Tawfik Assy, Chairman and Chief Executive Officer, Egyptair
Mr Titus Tukero Naikuni, Chief Executive Officer and Group Managing Director, Kenya Airways
Mr Samer Majali, President and Chief Executive Officer, Royal Jordanian
Eng. Khalid Abdullah Almolhem, Director General, Saudi Arabian Airlines


Date: 02 June 2008 No: 29

Industry Leaders Agree To Historic Declaration
‘Governments Need To Take Responsibility’

Istanbul – The leaders of the world’s airlines unanimously agreed to a resolution calling for governments, airports and labour to take immediate action to help the industry survive the growing financial crisis. The resolution was made at the International Air Transport Association’s (IATA) 64th Annual General Meeting and World Air Transport Summit.

“Extraordinary times call for extraordinary measures. Airlines are an engine for global prosperity and failure amongst them would send shockwaves throughout the world economy,” said IATA Chairman and TAP Portugal CEO Fernando Pinto.

The resolution comes after a recent spike in fuel prices that has led to two-dozen airlines ceasing operations or filing for bankruptcy.  “Many more will not survive,” Pinto said.

The declaration made six specific calls to action:
Governments must eliminate archaic rules that prevent airlines from restructuring across borders.
In view of existing fees and charges, governments must refrain from imposing multiple and additional punitive taxes and other measures that will only deepen the crisis.
State service providers must invest to modernise air transport infrastructure urgently, eliminating wasteful fuel consumption and emissions.
Business partners, in particular monopoly service providers, must become as efficient as airlines are now.  If not, regulators must restrain their appetite with tougher regulation.
Labour unions must refrain from making irresponsible claims and join the effort to secure jobs in aviation and indeed in other industries.
In the interest of the global economy and the flying public, we urge authorities to enforce the integrity of markets so that the cost of energy reflects its true value.
“The airline industry is sending a clear message to governments, partners and labour. We are in crisis. Governments, labour and our business partners must understand this. And they must act,” said Giovanni Bisignani, IATA Director General and CEO.

View full declaration

Contact:
Anthony Concil
Director Corporate Communications
+41 22 770 2967 (Geneva press office)
+ 41 79 289 5005 (mobile)
+ 90 212 227 3000 ext. 6651 (AGM Media Room Istanbul)
concila@iata.org


Date: 02 June 2008 No: 28

Eagle Awards for
Airways New Zealand, Incheon and Tampa

Istanbul - The International Air Transport Association (IATA) recognised the outstanding achievements of Airways New Zealand, Incheon International Airport and Tampa International Airport with IATA’s Eagle Awards.

The Eagle Awards honour airports and air navigation service providers (ANSPs) for outstanding performance in customer satisfaction, cost efficiency and continuous improvement. The awards were presented at IATA's 64th Annual General Meeting and World Air Transport Summit taking place in Istanbul, Turkey. They are based on the recommendations of the independent Eagle Awards Panel.

"Today's winners have one thing in common. They put the customer first, delivering value for money. Airlines and our customers pay a big bill for infrastructure, US$43.5 billion a year, or 11% of our costs. So it is critical that airports and ANSPs are transparent and consult with their customers to achieve both cost efficiency and high service standards. I congratulate Airways New Zealand, Incheon International Airport and Tampa International Airport for their great achievements," said Giovanni Bisignani, IATA's Director General and CEO.
Airways New Zealand focuses on the needs of its customers. Not just within its own area but also in seeking regional solutions with neighbouring ANSPs. This is the sort of joined-up thinking that airline customers appreciate and need. Airways New Zealand sets an excellent example for other ANSPs to follow,” said Bisignani. “Airways New Zealand also has a good consultation process and its charges are reasonable. It has not increased its charges for the past 10 years and will hold them for at least another two. Airways New Zealand is delivering global improvements in route optimisation, operational efficiency, safety and cost efficiency.”
Incheon International Airport has led the industry in operational excellence, customer service and cost-efficiency improvements. It had the good sense to listen to its customers to agree a reduction in charges,” said Bisignani. In 2007, Incheon proposed significant increases in charges but after a successful consultation process, a 3-year pricing agreement was reached that resulted in a 10% reduction in landing charges for the duration of the agreement and cost savings of US$75 million for airlines. “Incheon adopted a proactive and successful approach to a difficult issue. They are a shining example for other airports to follow,” Bisignani added.
Tampa International Airport is one of the best examples of an airport that consults effectively with its customers. It has delivered results in cost per passenger, rates and charges,” Bisignani said. Since the late 1990s, the airport has spent more than US$1 billion in renovations, construction, and capital improvements, while keeping down the average airline cost per departing passenger. This cost has decreased steadily from US$5.32 in 1995 to US$4.26 in the last 2 years.
Honourable Mention: IATA gave an honourable mention for “most improving” provider to Papua New Guinea Air Services Limited, which was recognised for the very significant improvements that have been achieved in governance, financial and operational terms in the past three years. 
"Congratulations to all the Eagle Award winners. You continue to set the standards for performance, cost efficiency and continuous improvements for others to achieve," said Bisignani.

Notes for editors:

Dr Assad Kotaite, Chairman of the independent Eagle Awards Panel, presented the Eagle Awards at IATA's 64th Annual General Meeting and World Air Transport Summit in Istanbul on 2 June 2008.

In his speech Dr. Kotaite said that the IATA Eagle Awards were highly-prized recognitions of airports and air navigation service providers who offer not only excellent service but strive towards better cost efficiency and continuous improvement. In 2008 the Panel wanted not only to recognise good performance but also to encourage it.  It therefore considered nominees who could be considered as the “most improving” or “most improved” airports and ANSPs, particularly the smaller and medium-sized ones. The panel also considered each nominee in the specific context of its region, not just on a global comparison.

For further information about IATA’s Eagle Awards see www.iata.org/events/agm/eagle_award.htm

Previous Eagle Award Winners are:

Year
Airport
Air Navigation Service Provider
  2007  Vancouver Airport Authority DGAC Chile
  2006  Manchester Airport LFV of Sweden
  2005  - Civil Aviation Authority of Singapore
- Brisbane International Airport
AirServices Australia
  2004  San Francisco International Airport  
  2003 - Athens International Airport
- Melbourne Airport
- Civil Aviation Authority of Singapore
- Airways Corporation of New Zealand
- Estonian Air Navigation Services
- The General Civil Aviation Authority of the UAE
 
  2002 - The State of Hawaii Airports System
- Airport Authority of Hong Kong
- Cyprus Airports
- Civil Aviation Authority of Singapore
 
  2001 Civil Aviation Authority of Singapore NAVCANADA
  2000 Manchester Airport plc DFS Deutsche Flugsicherung
  1999 Dallas Fort Worth International Airport  AirServices Australia
  1998   BAA plc Irish Aviation Authority

For further information please contact:

Anthony Concil, IATA    
+41 22 770 2967 (Geneva press office)
+ 41 79 289 5005 (mobile)
+ 90 212 227 3000 ext. 6651 (AGM Media Room Istanbul)
concila@iata.org
Ken Mitchell, Airways New Zealand
+64 4 471 4749 (New Zealand time zone)
+64 21 43 82 43 (mobile)
Ken.Mitchell@airways.co.nz
Jung Mi Lim, Incheon International Airport
+82 32 741 6204, 2116-7
jmlim@airport.kr
Brenda Geoghagan, Tampa International Airport
+1 813 870 8707
bgeoghagan@tampaairport.com


Date: 02 June 2008 No: 27

Fuel Crisis a Catalyst for Change

Istanbul – The International Air Transport Association (IATA) called on governments, industry partners and labour to address the fuel crisis that is pushing airlines into the red. IATA forecasts a loss of US$2.3 billion for 2008 based on an average oil price of US$106.5 per barrel Brent crude. The association sounded a warning that this year’s loss could be even higher - potentially US$6.1 billion with an oil price at US$135 per barrel for rest of the year.

In the State of the Industry address at IATA’s 64th Annual General Meeting and World Air Transport Summit in Istanbul, Turkey, the association’s Director General and CEO, Giovanni Bisignani compared the airline industry to Sisyphus - a mythical character whose fate was to constantly carry heavy loads uphill.

“Over the last 60 years the industry made US$11.5 trillion in revenues, but only US$32 billion in profits. Average margin for the entire industry has been just 0.3%. And the industry is US$190 billion in debt. Since 2001, airlines achieved massive change. Fuel efficiency improved 19% and non-fuel unit costs dropped 18%. The skyrocketing price of oil has eaten these gains and left the industry in the red again. Oil prices at US$130 a barrel are changing the game for everyone. The situation is grim,” said Bisignani.

Bisignani sounded the alarm in a stark declaration to governments, industry partners and labour. “Airlines are struggling for survival and massive changes are needed. Governments must stop crazy taxation, change the rules of the game and fix the infrastructure. Labour must understand that jobs disappear if costs don’t come down. And to our partners, the message is simple. We are in this together. Don’t bite the hand that feeds you,” said Bisignani.

Agenda for Freedom

The greatest call for change was with governments. “Re-regulation or re-nationalisation is not the right answer. But it may be the only one unless we change the rules of the game. The Chicago Convention is not the problem. It’s the bilateral system that was designed for another age. The Freedoms of the Air are only restrictions on our business. Airlines cannot look beyond national borders to manage risk, access global capital or consolidate. To fight crises effectively, brands not flags must define our business,” said Bisignani.

“We must communicate clearly to governments the dimension of the oil crisis, the potential impact on the global economy if the air transport industry fails, the measures that airlines are taking to survive and the action we need from them. To achieve this, IATA is organising an Agenda for Freedom Summit in Istanbul in the fourth quarter of this year. The invitation is open to any country with the courage to change. Already 12 countries have agreed to participate,” said Bisignani.

“The Agenda for Freedom Summit will build on the pockets of progress on liberalisation that we see around the world and drive even bigger change to overcome the limits of the bilateral system, free airlines from national flags, secure financial stability and create global opportunities. It’s time to tear-up the 3,500 bilateral agreements and replace them with a clean sheet of paper without any reference to commercial regulation. Airlines would be free to innovate, compete, grow, become financially healthy or even disappear. Governments also have an important role: to ensure a level playing field and regulate safety, security and environmental performance,” said Bisignani.

Bisignani also called for change in three other key areas:

Security: “Security is an uncoordinated mess. Since 2001 airlines and their customers have paid over US$30 billion for security measures. For this we get more frustration than value. Passengers face a maze of duplication, bureaucracy and hassle. This must change,” said Bisignani. The IATA-led Simplifying Passenger Travel programme (www.spt.aero) points the way to effective, efficient and convenient security. “Now governments must do their part and focus on risk management, harmonise global standards, make better use of technology, and take responsibility for the bill,” said Bisignani.

Regulation of monopolies: Bisignani reported that IATA’s work achieved a record US$3.7 billion of cost savings in charges, fees and taxation. “But airport cost increases of US$1.5 billion show that still too many monopoly suppliers live happy days isolated from commercial discipline. Governments must deliver effective regulation of monopolies. That means delivering results on cost-efficiency and good service,” said Bisignani.

Environment: “The current fuel crisis must be a catalyst for governments to deliver results on environment that reduce fuel burn. Our vision for carbon neutral growth leading to a carbon-free future sets the benchmark. And we are driving progress with our four pillar strategy. In 2007, IATA Green Teams delivered 10.5 million tonnes of CO2 savings along with shortening 395 routes. But governments remain fixated on punitive economic measures such as the EU Emissions Trading Scheme. These are reckless decisions when the oil price could re-shape the industry. Governments must drive progress by taking politics out of air traffic management, acting globally on emissions trading and supporting positive economic measures to drive innovation,’’ said Bisignani.

Bisignani reported on two areas of solid progress:

Safety: “In 2007, 2.3 billion people and 44 million tonnes of cargo flew safely. But the accident rate took a step backwards from 0.65 hull losses per million flights in 2006 to 0.75 in 2007. We must work harder to make a safe industry even safer,” said Bisignani. He announced that all IATA members have completed the IATA Operational Safety Audit (IOSA). A total of 149 IATA member airlines are on the registry which now includes 206 airlines. “IATA is a quality association and IOSA is a condition of IATA membership. By the end of 2008, carriers must close all audit findings and be listed on the public registry (www.iata.org/registry) to retain membership,” said Bisignani. Twelve airlines have been terminated for not meeting the deadlines. “Our goal is to raise the bar on safety, not reduce our membership. IATA is investing US$8.2 million in Partnership for Safety programmes and flight data analysis to help members achieve the IOSA standards.”

Simplifying the Business: Bisignani reported that the industry achieved 100% e-ticketing on 1 June 2008. “Four years ago we had a vision to modernise our business with technology, improve convenience and save US$6.5 billion. Today that vision is a reality. E-freight operates at six locations, three more are about to start and we expect 14 by the end of the year. Bar coded boarding passes are being used by 135 airlines. And millions of passengers enjoy the convenience of Common Use Self Service check-in at 94 airports. But the star of the show is e-ticketing. Today we celebrate a great achievement. The paper ticket is history. Everyone can enjoy the convenience of e-ticketing everywhere. And we are saving US$3 billion annually,” said Bisignani.

“Airlines transport 2.3 billion passengers safely and efficiently. Over US$3.5 trillion of business and 32 million jobs depend on our success. We are in a crisis of enormous dimension. Change is the only way to survive this perfect storm, return to profitability and build a sustainable future,” concluded Bisignani.

View Giovanni Bisignani's speech

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org
 
 
Editors Notes:
The 64 year-old Chicago Convention outlines an effective global approach to technical issues. But it does not provide a multilateral framework for commercial regulation. International air rights are allocated through bilateral negotiations among countries. As a consequence, airlines are required to maintain a national identity through national ownership requirements that restricts access to global capital and precludes cross-border consolidation except in rare cases.
The list of countries agreeing to participate in the Agenda for Freedom Summit includes: Canada, the United States, Panama, Chile, Morocco, the European Union, Turkey, the United Arab Emirates, India, Singapore, Australia, and New Zealand.


Date: 02 June 2008 No: 26

Crisis Again
Deep Losses Projected

 
Istanbul – The International Air Transport Association (IATA) revised its industry financial forecast for 2008 significantly downwards to a loss of US$2.3 billion. The forecast uses a consensus oil price of US$106.5 per barrel crude (Brent). This is a swing of US$6.8 billion from the previously forecasted  industry profit of US$4.5 billion that was announced in March and based on an average oil price of US$86 per barrel (Brent).

“For every dollar that the price of fuel increases, our costs go up by US$1.6 billion,” said Giovanni Bisignani, IATA Director General and CEO at the Association’s 64th Annual General Meeting and World Air Transport Summit which opened today in Istanbul, Turkey. The industry’s total fuel bill in 2008 is expected to be US$176 billion (based on oil at US$106.5 per barrel) accounting for 34% of operating costs. This is US$40 billion more than the 2006 bill which was US$136 billion (29% of operating costs).  In 2002, the bill was US$40 billion, equal to 13% of costs.

“We also need to take a reality check. Despite the consensus of experts on the oil price, today’s oil prices make the US$2.3 billion loss look optimistic. For every dollar that the oil price increases, we add US$1.6 billion to costs. If we see US$135 oil for the rest of the year, losses could be US$6.1 billion,” said Bisignani.
 
“The situation has changed dramatically in recent weeks. Oil skyrocketing above US$130 per barrel has brought us into uncharted territory. Add in the weakening global economy and this is yet another perfect storm,” said Bisignani.

“Oil is changing everything. There are no easy answers. In the last six years, airlines improved fuel efficiency by 19% and reduced non-fuel unit costs by 18%. There is no fat left. To survive this crisis, even more massive changes will be needed quickly. Air transport is a catalyst for US$3.5 trillion in business and 32 million jobs. This is an extraordinary crisis with the potential to re-shape the industry with impacts throughout the global economy. Governments, industry partners and labour must deliver change,” said Bisignani.

Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
corpcomms@iata.org
 
 
Editors Notes:
US$6.1billion would represent the industry loss during 2008 based on spot price of crude oil of US$135 per barrel for the rest of the year.  The average to date has been US$105 a barrel so this would bring the average spot price for the year to US$122 per barrel.


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