This week’s top air transport stories from the IATA AGM in Istanbul, Turkey, include IATA chief economist Marie Owens Thomsen sees improved airline profit this year and IATA has mapped out a detailed analysis of how the industry can reach net-zero by 2060.
IATA chief economist Marie Owens Thomsen set out a revised forecast that total revenues are expected to be $803 billion—the first time they will have exceeded $800 billion since 2019—while operating profit is expected to reach $22.4 billion, much improved over the December forecast of $3.2 billion. Costs are expected to grow 8.1% over 2022 to $781 billion. Some 4.35 billion people are expected to travel in 2023, close to the 4.54 billion who flew in 2019.
IATA said the aviation industry must use every available option available to meet the 2050 net-zero emissions target. This includes areas such as investing in carbon offset programs and the diversification of sustainable aviation fuel (SAF) feedstocks. “We need absolutely every tool in the toolbox to engineer this climate transition of ours. We just need everything and we need it fast,” IATA senior VP sustainability & chief economist Marie Owens Thomsen told ATW when asked about airlines pursuing programs like carbon offsets instead of SAF.
IATA has mapped out a detailed analysis of how the aviation industry can reach net-zero by 2050, in the form of roadmaps highlighting the technology, policy, finance, operational and infrastructure steps needed to achieve the industry-wide goal. The roadmaps to net zero unveiled by IATA address three fundamental levers: reducing the amount of energy needed to fly; changing the fuel used to fly; and recapturing carbon dioxide that is still emitted. Those three levers cover five different areas: aircraft technology, energy infrastructure, operations, finance, and policy.
IATA deputy director general and corporate secretary Conrad Clifford said airports must deliver on capacity promises. Clifford also called for the reform of EU261 compensation legislation, which airlines argue is unfair when delays are caused by factors out of their control, such as ATC strikes.
IATA has urged governments in Latin America to put incentives in place that would allow the region to emerge as one of the largest sustainable aviation fuel (SAF) producers worldwide. IATA regional VP for the Americas Peter Cerda said leaders must implement the right policy framework that would allow private companies to establish the infrastructure necessary for SAF production, rather than imposing so-called green taxes on airlines.
IATA’s real-time turbulence data-gathering platform has grown to 20 participating airlines, with All Nippon Airways (ANA) and WestJet the latest to sign on. Calgary-based WestJet has 24 aircraft filing reports to Turbulence Aware and plans to boost this to 60 by 2026, IATA said in a June 6 update on the program. ANA will start with nine aircraft in July with an eye on having 125 in the program over the next three years.
Airports Council International (ACI) World is launching a project designed to establish a framework to facilitate airports’ access to green financing. The initiative will seek to establish clear guidelines and criteria that will streamline the evaluation process for banks and investors, making it easier for airports to secure the necessary funds for sustainability-linked developments.
The following were announced at the AGM.
Emirates Airline has begun work on another large order for widebody aircraft as the airline prepares for the replacement of a bigger part of its current fleet. “We are looking at buying a number of extra aircraft,” Emirates Airline President Tim Clark said on the sidelines of the IATA AGM. Clark did not specify what the number is the airline is looking at or when it will make a decision. But he hinted that the carrier is in the process of retrofitting 140 aircraft (Boeing 777-300ERs and Airbus A380s) with new cabins to extend their service lives with Emirates and compensating for delivery delays that have severely impacted the carrier’s capacity planning.
All Nippon Airways (ANA) and Japan Airlines (JAL) said that domestic sustainable aviation fuel (SAF) production capabilities are crucial to remaining competitive in the future. ANA CEO Shinichi Inoue says the airline hopes Japan can achieve three key factors for SAF: domestic SAF production; realistic SAF pricing, in line with conventional jet fuel; and abundance of supply. “If we cannot realize this, the competitiveness of Japan as a whole will be weakened. Japan is a popular destination for travelers, and there is a lot of demand. But if we cannot realize the ideal production of SAF, people will not travel using Japanese airlines and will use other airlines,” ANA CEO Shinichi Inoue told ATW at the IATA AGM.
Air India CEO Campbell Wilson defended the airline’s use of Russian airspace, emphasizing the importance of operating within the framework of national relationships, regulations and diplomatic ties. Speaking at the IATA AGM on June 5, Wilson said: “At Air India, we operate in accordance with the ambit of what's provided to us by the nation. Not all nations agree—there are going to be different outcomes as a consequence."
United Airlines believes it can make significant progress in bolstering connectivity in its mid-continent hubs during the next year-and-a-half. The company has estimated that peak bank sizes at its high-flow hubs are down 10% to 20% compared with 2019 due the loss of regional jets and a lack of aircraft deliveries.
Japan Airlines (JAL) is studying its options for the eventual replacement of its Boeing 767 fleet and the remainder of its 737s. The carrier is undertaking feasibility studies on what aircraft it would need for these replacement needs, said Ross Leggett, JAL managing executive officer and SVP for route marketing.
Brazilian operator Azul is seeing a bit of relief in the challenges stemming from reliability issues with the Pratt & Whitney PW1000G engines powering its Embraer 195-E2 jets. Azul CEO John Rodgerson told CAPA TV during the IATA AGM in Istanbul that, “It seems like some of the teething issues on the E2 are starting to get worked out, and so we have no E2s on the ground right now; we have 17 flying.”
Qantas intends to continue operating its Airbus A380 fleet for at least another decade and is working to get more of its parked A380s back into service. The carrier has been conducting a mid-life reconfiguration and heavy checks on its A380s as they return to service, Qantas CEO Alan Joyce said. The A380s still have at least “another 10 years of life left, and it was always our intent to keep them until the end of their life,” Joyce said. He noted that they are very popular with customers, and the aircraft are fully written down.
Visa restrictions, capacity caps and even Russian airspace overflights are stemming the restoration of capacity in and out of China, and the air transport industry hopes governments can reciprocate the relaxation of policies to resume air transport connectivity. Speaking at the IATA AGM in Istanbul, IATA regional VP-North Asia Xie Xingquan said while China has removed the so-called Five Ones capacity caps for all airlines since early 2023, other regulators have not done so for reasons ranging from airport handling capacity to inter-government ties.
Air Canada remains confident even though domestic competition is at a historical high, but the carrier believes connectivity at its hubs serves as an effective shield against low-cost upstarts. Over the last few years, WestJet has introduced its ultra-low cost subsidiary Swoop, ULCC Flair Airlines has continued to grow, and Lynx Air made its debut in April 2022. Indigo Partners, a private equity firm specializing in ULCCs, has a stake in Lynx. “There’s no doubt we are going through an intense cycle of competition in Canada,” Air Canada EVP of revenue and network planning Mark Galardo told Aviation Daily. “We’ve always had competition, new entrants, but to see it all build up at once” is something he has not seen in his nearly 20-year career at the airline.
Malaysia Airlines intends to start a selection campaign later this year to cover the next stage of its narrowbody replacement needs, and the carrier is also looking to boost its widebody fleet. The airline is likely to request proposals from manufacturers in the fourth quarter, Malaysia Airlines CEO Izham Ismail told Aviation Daily. It will seek board approval for this step in August.
Star Alliance has named Theo Panagiotoulias as its next chief executive officer. Panagiotoulias joins the alliance from Hawaiian Airlines, where he served as SVP of global sales and alliances. Before joining Hawaiian, he was VP and general manager, Asia Pacific, for Sabre. He has also held several positions at American Airlines. Panagiotoulias succeeds Charlotta Wielannd, who has served as the interim CEO since January after the departure of former CEO Jeffery Goh.
IATA regional VP-Africa and the Middle East Kamil Al-Awadhi said airlines pulling out of countries would continue to weaken connectivity and lead to higher ticket prices, as well as reducing investor confidence. The industry’s blocked funds have increased by 47% to $2.27 billion in April 2023, up from $1.55 billion during April 2022. The trapped funds are proceeds of ticket sales made in local currency but blocked due to the nonavailability of foreign exchange to recoup it.
Vietjet Air is having difficulties sourcing Airbus A330-300s for its medium-haul network expansion because of a lack of available aircraft on the market. The LCC now has seven A330s and is looking to add five more of the widebodies as it ramps up services to Eastern Europe.
Icelandair and Turkish Airlines signed a codeshare agreement at the IATA AGM. The move will enable Icelandair passengers to connect onward to destinations in the Middle East and Asia. In turn, Turkish Airlines passengers will be able to connect to Icelandair’s westbound destinations in Iceland and North America.
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