Brussels, 03/06/2013 (Agence Europe) - According to the International Air Transport Association (IATA) on Monday 3 June, airlines will experience an overall increase in profits. This upward trend will also be experienced by European airlines, despite the region's economic difficulties. IATA also indicated its support for a market-based instrument to help reduce CO2 emissions from the aviation sector.
Overall results. On the sidelines of its General Assembly in the Cape (South Africa), IATA published revised figures for 2013 forecasts. Globally, airlines are expected to achieve profits of $12.7 billion this year (as opposed to the $10.6 billion forecast in March). This is a very clear increase compared to the $7.6 billion last year. Nonetheless, IATA's Secretary General, Tony Tyler, deplored too narrow a profit margin and said that “the day-to-day challenges of keeping revenues ahead of costs remain monumental. Many airlines are struggling. On average, airlines will earn about $4 for every passenger carried - less than the cost of a sandwich in most places”. The “modest boost” in the industry's growth is down to slightly lower fuel prices, which compensate for the slowdown in the global economy.
European results. Despite the protracted eurozone crisis and recession in Europe, the profits expected by airlines in the region have doubled from $0.8 to $1.6 billion this year. Profit margins remain very tight, however, barely better than those in Africa. The IATA report demonstrates that demand remains strong (4% growth in Revenue Passenger Kilometres, RPK), which proves that the 2.7% expansion capacity is far from sufficient. IATA indicated that to make up for the poor economic situation, airlines could count on intra-European and North America market consolidation.
Carbon. The IATA General Assembly adopted a resolution from the industry advocating a worldwide Market-Based Mechanism (MBM) to make the aviation sector carbon neutral. Tyler explained that “airlines are committed to working with governments to build a solid platform for the future sustainable development of aviation. Today, they have come together to recommend to governments the adoption of a single MBM for aviation and provide suggestions on how it might be applied to individual carriers. Now the ball is in the court of governments. We will be strongly supporting their leadership as they seek a global agreement through the International Civil Aviation Organisation (ICAO) at its Assembly later this year”. In exchange for this support to world leaders, Tyler warned that “we need governments to be serious partners and while developing an MBM must not become an excuse for revenue generation by cash-strapped governments or for avoiding incentivising investments in new technologies and sustainable low carbon alternative fuels”. (MD/transl.fl)