International Air Transport Association
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The International Air Transport Association (IATA) is an international trade association for the world's airlines, created in 1945 with 57 founding members. Today, IATA represents more than 250 airlines in 118 countries, comprising 85% of scheduled international air traffic. Its mission is, "to represent, lead and serve the airline industry."
IATA has 63 offices in 61 countries, with its Head Office in Montreal, Executive Office in Geneva and Regional Offices in Amman, Beijing, Brussels, Johannesburg, Madrid, Miami, Moscow, Singapore and Washington. The IATA Annual General Meeting & World Air Transport Summit, held in June each year, formalises industry positions on industry and public policy issues and provides a focus for emerging industry issues.
372 total articles
LCCs in Latin America: Peru’s rise as an economic star could draw attention from potential operators
As Latin America attempts to climb out of a two year long recession, Peru has emerged as a bright spot in the region – based on air passenger growth and the country’s economic performance. For the seven months ending Jul-2016 Peru recorded 9% passenger growth to 11.2 million, driven by growth of 10.2% in the country’s domestic market.
Peru’s air passenger growth continues to remain promising, as the country’s largest airline – LATAM Airlines Peru – calculates that the country’s trips per capita are slightly below the still-emerging markets of Mexico, Colombia and Brazil, whose passenger growth potential should remain robust once the country’s economy begins to fully recover.
Periodically speculation arises over the potential opportunity for a low cost airline to break into Peru’s market. The country’s growth prospects certainly warrant examination of stimulative opportunities in Peru, but so far the country lacks a true low cost airline.
On 6-Oct-2016 the Assembly of ICAO adopted a resolution to implement a global carbon-offsetting scheme for aviation. The scheme is aimed at helping to neutralise the CO2 emissions impact of the growth in international air travel after 2020. It complements efforts by the industry to mitigate its climate change impact through improvements in aircraft technology, operations and infrastructure and sustainable alternative fuels.
The President of the Council of ICAO, Dr Olumuyiwa Bernard Aliu, acknowledged that the process had been complex for all concerned, but hailed the agreement as the result of a process characterised by a high level of political will. IATA welcomed the "historic" agreement as the first global climate change mitigation scheme covering an entire industrial sector.
However, the International Coalition for Sustainable Aviation said that the agreement sent a "worrying signal" and the coalition member Transport & Environment called it "a weak start". It does leave a number of important details still to be elaborated. Given the complexity of negotiating a global deal, the ICAO agreement may be the best that could be expected for now. Nevertheless, aviation must continue to show strong ambition to play its part in mitigating climate change, and also in being seen to do so.
Asia-Europe, which is one of IATA's big four international markets, has become the slowest-growing. The market underwent RPK expansion of only 1.5% in Jul-2016, the latest data available. Uncertainty in Europe and terrorism fears mean that some Asian travellers choose Australia and North America or, as IATA has flagged – travel within Asia, which has expanded by nearly double digits.
Although market expansion was slow in the first part of 2016, so too was capacity. Yet this changed in Jul-2016 as capacity increased more quickly, perhaps as airlines expected a stronger summer. Despite slow passenger growth, dynamics are highly varied – except for yield declines. The combined RPK growth of IAG (7.2%) Cathay Pacific (3.7%) and Finnair (8.7%) was not enough to offset the contraction of the largest airline in the market, AF-KLM (7.9%).
From the reported geographic data by all major airlines, load factors are falling.
The evaluation process that airlines use to determine the viability of international routes goes far beyond merely calculating potential profitability. Myriad considerations need to be undertaken, including ease of doing business with governments, infrastructure constraints and the customer experience of passengers travelling to the end destination.
Although American and Delta continue to trumpet the need for government-to-government consultations between the US and the UAE and Qatar regarding open skies agreements with those countries, fully liberalised air service pacts remain the cornerstone for international expansion from the US. Particularly so for airports outside the hub systems of the three large global US network airlines.
A pending open skies agreement with Brazil, a new bilateral with Mexico and the recently concluded agreement to resume scheduled flights between the US and Cuba have created new opportunities for US airlines to broaden their reach in Latin America and the Caribbean. But there are obviously inherent risks in undertaking expansion to those regions, and the rewards from growing on routes to those countries may only manifest themselves in the medium to long term.
Following two conspicuous airline defections from regional airline associations in 2015 there must be questions about the role of industry bodies in future – Delta left A4A and IAG left AEA. The issue is further complicated when a European, cross-association grouping is set up to achieve a special purpose.
Whereas Delta's departure from A4A was over fees and ATC privatisation, IAG left AEA on broader policy grounds in a disagreement over liberalisation versus protectionism. IAG then became a member of ELFAA, previously the stronghold of LCCs. Adding further to the density of the manoeuvres, IAG then joined Air France-KLM, Lufthansa, easyJet and Ryanair in forming a new body, A4E, with a very focused agenda.
CAPA's Airlines in Transition (AIT) event in Dublin in Mar-2016 assembled a panel bringing together the heads of four of Europe's airline bodies (AEA, A4A, ELFAA and ERA), the head of its airport trade body (ACI Europe) and the experienced head of the Arab Air Carriers Organisation. Moderated by Kurt Knackstedt, President of the Association of Corporate Travel Executives, the panel addressed the relevance and future of these associations.
An audience of senior aviation professionals recently doubted the sector's ability to renew its licence to grow. At CAPA's Airlines in Transition (AIT) conference in Dublin on 11-Mar-2016, 88% of delegates polled believed that environmental pressures would constrain airline growth over the next 20 years. Although aviation is one of the only global sectors with ambitious emissions reduction targets, and a strategy to achieve them, its message is not being heard.
Aviation must communicate its importance to the global economy, so that governments and other stakeholders regard its growth as essential. Introducing the topic, Professor Geoffrey Lipman argued for a "moon-shot" to focus resources and attention on developing commercially viable biofuels, allowing a carbon-free future for aviation. This goes beyond the industry's current targets. He stressed the significance of climate change above almost any other global issue: "Climate is existential", he stated.
Following the 2015 Paris Agreement the world has stepped up all efforts to ensure its future existence. Aviation must play its part and also be seen to do so.