22-Feb-2011 9:00 AM

China has critical mass to shape future for aviation: IATA

IATA Director General Giovanni Bisignani stated (21-Feb-2011) the following at a press briefing in Beijing on 21-Feb-2011:

  • Margins: "Aviation supports 32 million jobs, facilitating the global village and USD3.5 trillion in economic activity. But our margins are pathetic. Over the last 40 years, the average margin was just 0.1%. To be a sustainable business, we would need 7-8% to meet the cost of capital";
  • The importance of Asia: "Asia will play a big role in our future. Of the USD9.1 billion in profit that we expect airlines to make this year, USD4.6 billion will come from this region";
  • Impact of oil: "The current level around USD100 could spoil the party for everyone. For every dollar that it goes up, airlines face the challenge of recovering an additional USD1.6 billion in costs";
  • Traffic outlook for Asia: "Asia is also growing fast. Our 2010-2014 traffic forecast shows that in 2014, 3.3 billion people will travel. That is 800 million more than in 2009. Asia Pacific is now our largest market. In 2009 Asia Pacific overtook North America as the world’s largest aviation market by a few million people. Both accounted for about 26% of global traffic. By 2014, North America will fall to 23% and Asia Pacific will rise to 30%";
  • China's growth: "China will be at the centre of the traffic growth in 2014. 800 million new travellers are expected in 2014. 360 million or 45% will travel on Asia Pacific routes, of which 214 million will be associated with China with 181 million domestic travellers and 31 million international travellers. By 2014 China is expected to be the fastest growth market for international traffic at 10.8% and domestic traffic at 13.9%. China will be the second largest domestic market in the world with 379 million passengers. China is expected to be the 2nd fastest growing international freight market at 11.7%, making it the fifth largest freight market globally. China including Hong Kong will account for one third of global volume growth over the period to 2014. The age of China is not in the future - it is here. With size comes responsibility. China has the critical mass to help shape a much more successful future for all of aviation. And I hope that it can successfully grow into this role";
  • Environment: "The aviation industry shares three global targets - to improve fuel efficiency by 1.5% annually to 2020, to cap emissions with carbon neutral growth from 2020, and to cut emissions in half by 2050 compared to 2005. We are committed to achieve these targets even while accommodating the tremendous growth that we are forecasting. Biofuels will play a big role in meeting these commitments. They have been successfully tested and we expect certification in a couple of months. But the oil companies, who cash USD13.7 billion in refinery margins on jet fuel, are not doing enough. We need governments to take a more proactive role, establishing the fiscal and legal framework to support their commercialisation";
  • Air Traffic Management: "The explosive traffic growth in China is creating huge challenges for China’s air traffic management. With the expected traffic growth in 2014, the situation can get worse. I have personally invested much time in working with the government and all stakeholders on sustainable solutions ... The challenge is growing exponentially. Despite improvements, air traffic delays are at unacceptable levels. Airspace is a finite resource from which we are working together to squeeze even more efficiency. The key will be in releasing more military airspace for civilian use. IATA is here to support to find a comprehensive solution to serve the needs of the military, airlines and their passengers, and businesses dependent on reliable air links";
  • Simplifying the business: "With passenger and freight traffic growing, there is also a need to improve efficiencies. Our Simplifying the Business programme will save the industry USD18 billion annually. In 2008, China met our 100% e-ticket target five months ahead of time, and achieved the 100% barcoded boarding pass target last year. Following the successful implementation of bags ready-to-go by Air China last year, we hope China will lead in implementing all the remaining Fast Travel projects from document check, flight rebooking, to self-boarding and baggage recovery. This will save USD2.1 billion annually."  [more]

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