78th IATA Annual General Meeting Recap

[In The News]

DALLAS – The International Air Transport Association (IATA) 78th IATA Annual General Meeting (AGM) and World Air Transport Summit (WATS) took place in Doha, Qatar, with Qatar Airways (QR) serving as the host airline.

The event, which ended today, brought together the industry’s top executives from IATA’s 290-member airlines, as well as top government officials, strategic partners, equipment suppliers, and the media.

Below is a recap of the event’s main keynotes and topics discussed.

Three Vital Pandemic Lessons for Governments to Restore Public Confidence

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IATA called for governments to apply the lessons learned from the dismantling of global connectivity in response to COVID-19 to ensure that future global health threats can be effectively managed without closing borders.

1. Evidence confirms that border measures are not an effective global strategy to control a pandemic
2. Governments should balance health measures with economic and social impacts
3. Traveler confidence requires logical rules and clear communication

Travel Recovery: Rebuilding Airline Profitability – Resilient Industry Cuts Losses to US$9.7bn

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IATA announced an upgrade to its outlook for the airline industry’s 2022 financial performance as the pace of recovery from the COVID-19 crisis quickened. Forecast highlights include:

• Industry losses are expected to reduce to -US$9.7bn (improved from the October 2021 forecast for a US$11.6bn loss) for a net loss margin of -1.2%. That is a huge improvement from losses of US$137.7bn (-36.0% net margin) in 2020 and US$42.1bn (-8.3% net margin) in 2021.
• Industry-wide profitability in 2023 appears within reach with North America already expected to deliver a US$8.8bn profit in 2022.
• Efficiency gains and improving yields are helping airlines to reduce losses even with rising labor and fuel costs (the latter driven by a +40% increase in the world oil price and a widening crack spread this year).
• Industry optimism and commitment to emissions reductions are evident in the expected net delivery of over 1,200 aircraft in 2022.
• Strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fueling a resurgence in demand that will see passenger numbers reach 83% of pre-pandemic levels in 2022.
• Despite economic challenges, cargo volumes are expected to set a record high of 68.4 million tonnes in 2022.

Director General’s Report on the Air Transport Industry

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William Walsh, Director General of IATA, gave his report on the current state of the industry. Until 2020, he was CEO of International Airlines Group and had previously been CEO of Aer Lingus (EI) and British Airways (BA).

Walsh began by saying, ” Aviation is resilient. And we are rebounding.”

“People who longed for the freedom to fly are taking to the skies again—and in growing numbers. By next year, most markets should see traffic reach or exceed pre-pandemic levels… Air cargo stood out as a lifeline for vaccines, supply chains, and airline revenues throughout the COVID-19 crisis. And it has grown to be an even more vital contributor to revenues.” 

Walsh later added, “Our industry is now leaner, tougher, and nimbler. Our latest analysis shows losses in 2021 close to $42 billion, a huge loss, but down from our earlier estimate of $52 billion. And we now believe that global losses will be cut further, to $9.7 billion this year. Industry-wide profit should be on the horizon in 2023.” 

“Yes, we are resilient, and we are rebounding. But while the outlook is positive, the business environment is challenging.” 

Mehmet Tevfik Nane New Chair of the IATA Board

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IATA announced that Pegasus Airlines (PC) Vice-Chairperson of the Board (Managing Director) Mehmet Tevfik Nane has assumed his duties as Chair of the IATA Board of Governors (BoG) for a one-year term, effective from the conclusion of the 78^th IATA Annual General Meeting (AGM) in Doha, Qatar on June 21.

Nane is the 80th chair of the IATA BoG. He has served on the BoG since 2019. He succeeds JetBlue Airways (B6) CEO Robin Hayes, who will continue to serve on the BoG.

2022 Diversity & Inclusion Awards Winners Announced

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IATA announced the winners of the third edition of the IATA Diversity & Inclusion Awards:  Inspirational Role Model: Güliz Öztürk – CEO, Pegasus Airlines, High Flyer Award: Kanchana Gamage – Founder and Director, The Aviatrix Project, Diversity & Inclusion Team: airBaltic (BT).

“The IATA Diversity & Inclusion Awards recognize individuals and teams that are helping aviation to improve gender balance.  Determination to make this happen is a common denominator for this year’s winners. They are breaking barriers and helping to make aviation an equally attractive career choice for men and for women,” said Karen Walker, Editor-in-Chief, Air Transport World and chair of the judging panel.

ICAO Assembly Must Adopt Long-Term Aspirational Goal to Decarbonize Aviation

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IATA called for governments to adopt a Long Term Aspirational Goal to decarbonize aviation at the 41^st Assembly of the International Civil Aviation Organization (ICAO) later this year.

The call came at the 78^th IATA Annual General Meeting (AGM) and World Air Transport Summit (WATS) where airlines are mapping out the pathway to the industry’s commitment to achieving net-zero emissions by 2050 in line with the Paris Agreement’s 1.5°C goal.

“The decarbonization of the global economy will require investment across countries and across decades, particularly in the transition away from fossil fuels. Stability of policy matters. At the IATA AGM in October 2021, IATA member airlines took the monumental decision to commit to achieving net-zero emissions by 2050,” said IATA’s Director General.

Walsh added, “As we move from commitment to action, it is critical that the industry is supported by governments with policies that are focused on the same decarbonization goal.”

Incentives Needed to Increase SAF Production

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IATA called for governments to urgently put in place large-scale incentives to rapidly expand the use of sustainable aviation fuels (SAF) as aviation pursues its commitment to achieving net-zero carbon emissions by 2050.

To fulfill aviation’s net-zero commitment, current estimates are for SAF to account for 65% of aviation’s carbon mitigation in 2050. That would require an annual production capacity of 449 billion liters. Investments are in place to expand SAF’s annual production from the current 125 million liters to 5 billion by 2025.

With effective government incentives, production could reach 30 billion liters by 2030, which would be a tipping point for SAF production and utilization.

Ensuring Safe Rollout of 5G Networks

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IATA urged governments to work closely with the aviation industry to ensure that aviation and incumbent aviation safety systems can safely co-exist with new 5G services.

While IATA recognizes the economic importance of making spectrum available to support next-generation commercial wireless telecommunications, maintaining current levels of safety of passengers, flight crews, and aircraft must continue to be one of the governments’ highest priorities.

Before deciding on any spectrum allocations or conducting spectrum auctions, IATA called for governments to ensure close coordination and mutual understandings between national spectrum and aviation safety regulators so that each frequency allocation/assignment is comprehensively studied and is proven not to adversely impact aviation safety and efficiency.

The key takeaway was that robust testing in coordination with aviation subject matter experts was critically important in providing necessary information.

Government Support Needed to make Transport of Lithium Batteries Even Safer

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Finally, IATA called on governments to further support the safe carriage of lithium batteries by developing and implementing global standards for screening, fire-testing, and incident information sharing.

As with many products shipped by air, effective standards, globally implemented, are needed to ensure safety. The challenge is the rapid increase in global demand for lithium batteries (the market is growing 30% annually) bringing many new shippers into air cargo supply chains. A critical risk that is evolving, for example, concerns incidents of undeclared or mis-declared shipments.

IATA has long called for governments to step-up enforcement of safety regulations for the transport of lithium batteries. This should include stiffer penalties for rogue shippers and the criminalization of egregious or willful offenses. IATA asked governments to shore up those activities with additional measures:

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Featured image and all photos: IATA 2022 AGM

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