The International Air Transport Association (IATA) has issued its September aviation report, writes John Barrington-Carver:
“Despite stronger than expected growth in passenger markets during September, the industry is bracing for more difficult times ahead. IATA’s recent Airline Business Confidence survey reported a significant decline in profitability expectations over the next 12 months. More worrying is the expectation that unit costs will increase with little optimism for yields. The majority expected no change in passenger yields while 90 per cent of respondents were split equally among those expecting cargo yields to remain the same or decline. IATA is expecting profitability to decline from $6.9 billion in 2011 to $4.9 billion in 2012 for a margin of just 0.8 per cent.
“Airlines play a key role in connecting global business. At this time of economic uncertainty in many parts of the world, US plans to raise an additional $36 billion in aviation taxes over the next decade could not be more misguided. Last month the UK recognised the harm that its GBP2.5 billion Air Passenger Duty was doing in Northern Ireland and announced a major cut. It’s time to apply that lesson at a more global level. Increasing the cost of doing business by making air transport more expensive destroys competitiveness. Governments should protect the 33 million jobs and $3.5 trillion in economic activity supported by aviation with a sound policy framework — not by suffocating the industry with taxes,” said Tyler.
As highlighted above airlines work on wafer-thin operating margins. Hence there is a huge commercial imperative to cut costs and increase efficiency; especially in the face of climate change concerns and sky-high fuel prices. Despite current criticism about aviation’s environmental record by climate change activists, it’s a fact that aviation has made vast strides in improving its environmental footprint. The website (www.enviro.aero) states: “Aviation has been improving its environmental performance consistently for the last 50 years. There aren’t many industries operating 20 per cent more efficiently now than they were just ten years ago – or that confidently predict a further 25 per cent improvement by 2020.”
What is more, better aircraft and engine design plus biofuels as well as continuing work on infrastructure and operations efficiency, will allow the industry to aim for the most ambitious goal yet: to ensure that net carbon emissions from aviation in 2050 will be half of what they were in 2005, or 318.5 million tonnes of carbon, and that is despite the predicted growth in passenger numbers. It’s already a fact that the new generation of efficient planes when flying to mid-haul destinations at full or near full capacity compare favourably with an average family car with three or more people travelling in it. We should therefore celebrate aviation’s success in addressing climate change issues while at the same time it also helps to keep world business and tourism connected and healthy.
With fears of aviation being subjected to more or higher revenue generating taxes as well as higher fuel costs, it’s also to be hoped that current and future new generation aircraft like the planned Airbus 350 will help airlines meet the very real financial challenges facing the industry. It will need every technical and operational efficiency available to it to be able offset fuel and other operating costs, remain competitive and yet keep a cap on passenger fares so that flying is not priced out of reach for Mr and Mrs Average and their family…
(Image: www.airbus.com)
