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Mr Giovanni Bisignani, Director General & CEO, International Air Transport Association.
If there was one industry that was severely battered in 2009, it was the airline sector – global traffic declined 3.1 per cent year-on-year, and the industry sustained a US$11 billion net loss.
“We are ending an Annus Horribilis, or horrible year, that brings to a close a horrible decade for aviation. Between 2000 and 2009, airlines lost US$49.1 billion, which is an average of $5 billion per year," said International Air Transport Association Director General and CEO, Giovanni Bisignani.
While things are looking up, and even with “the worst likely behind us” according to Mr Bisignani, the IATA is still not overly optimistic. The association has revised its financial outlook for 2010 to an expected US$5.6 billion global net loss, larger than the previously forecast loss of $3.8 billion.
Nevertheless, the association said some things are moving in the right direction. “Demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs by 1.3 per cent. But fuel costs are rising and yields are a continuing disaster,” said Mr Bisignani.
Amid the gloomy outlook, Asia Pacific airlines are posting the best improvements. The region’s airlines are expected to post losses of US$700 million this year.
“Compared to losses of $3.4 billion in 2009, this region is showing the most dramatic improvement. This is driven by a recovery in some of the region's economies. For example, China's GDP is forecast to grow by 9% in 2010,” said IATA.
The Association of Asia Pacific Airlines (AAPA) Assembly of Presidents, which gathered in Singapore in November last year, expressed a key concern of members – whether the recovery being seen in the last few months of 2009 would prove to be sustainable.
November 2009 figures released by the AAPA seem to be further proof that air traffic demand is recovering modestly. A total of 11.1 million international passengers were carried by AAPA member airlines in November, 4.5 per cent more than in the same month last year. International passenger traffic, measured in revenue passenger kilometre (RPK) terms, grew by 3.5 per cent. With available seat capacity having been cut by 3.1 per cent, the average AAPA international passenger load factor for the month reached 76.3 per cent, 4.9 percentage points up from the same month last year.
Mr Andrew Herdman, Director General, Association of Asia Pacific Airlines.
Mr Andrew Herdman, Director General of the AAPA, called the November traffic figures “mildly encouraging, in line with the broader economic recovery underway being led by the Asia Pacific region.”
However, he cautioned that “In absolute terms, demand remains well below pre-recession levels. In addition, the aviation industry is still wrestling with the problem of low yields and continuing oil price volatility, so a recovery in airline profitability is still some way off. Overall, market conditions remain extremely challenging.”
On top of these concerns, airlines face growing pressure on two fronts – aviation security and carbon emissions, and the AAPA is calling for restraint and collaboration on both issues.
Responding to the growing debate over airline security following the December bomb scare in the US and talk of introducing new measures and new technology, the AAPA called on “political maturity to remain calm, and not fall into the trap of knee jerk reactions, such as the imposition of new security measures of unproven effectiveness.”
“Good security is all about comprehensive threat assessment and balanced risk management, not the elimination of every conceivable risk,” explained Mr Herdman.
According to the AAPA, the air transport industry maintained its excellent safety record in 2009, making it one of the safest years in aviation history.
Globally, there were 12 major accidents involving large western-built commercial jets, nine of which resulted in a total of 414 fatalities. The number of major accidents was 25 per cent less than the average in recent years. With over 25 million commercial flights operating annually worldwide, the result reflects an average loss rate of one major accident for every two million flights.
There was only one major accident involving a carrier based in the Asia Pacific region, the loss of a BAe146 freighter with six crew members in April 2009 in Indonesia.
As part of its continual efforts to ensure that the highest safety standards are set in the industry, the AAPA will be organising an Asia Pacific Aviation Safety Seminar (APASS 2010) this September in Manila, Philippines.
AAPA is also calling for a global approach on carbon emissions through the International Civil Aviation Organisation (ICAO). Carbon emissions were a hot topic at the Copenhagen talks last December.
Said Mr Herdman, “Although the Copenhagen Accord does not specifically mention aviation emissions, the united industry plan of action offers challenging and ambitious targets that will deliver an improvement in carbon dioxide emissions efficiency of 1.5 per cent each year to 2020; carbon neutral growth from 2020; and a halving of net emissions by 2050.”
He also noted that the “ICAO’s ability to achieve consensus on these politically sensitive and technically complex issues, especially concerning the impact of aviation on the environment, will be put to the test at the ICAO’s 37th Assembly in Montreal, which takes place from 28 September – 8 October 2010.
“The AAPA, working with other industry stakeholders, will continue to press the ICAO to embrace a global sectoral approach, and effective coordination, avoiding the imposition of arbitrary, and environmentally ineffective, levies. Airlines are willing to play our part, but we need fair treatment and full access to global carbon markets,” he added.
