The start of a new year is always a time of hope, says IATA Director General and CEO Alexandre de Juniac.
That is particularly true for airlines who are concluding a very good 2016. The last quarter saw the strongest demand for air cargo in years. And overall airlines are reporting a record aggregate profit at the global level. This is all good momentum to carry us into 2017. It would be naïve, however, to ignore the shocks of the last year.
The political landscape shifted dramatically and unpredictably with a clear desire for change. But, whether it is the Brexit vote or the result of the US Presidential election, exactly how the forces for change will play out remain unclear.
Terrorism is top of mind. Aviation was a direct target. Two airports were attacked. ISIS claims to have downed one aircraft. Another narrowly escaped disaster. And attacks on popular tourist destinations have rattled the confidence of travelers.
An OPEC agreement late in the year appears likely to see oil prices rise. We don’t know by how much. But nobody is forecasting prices anywhere near the record levels of the 2011–2014 period.
I am looking to 2017 with optimism. Important changes in how airlines do business have made them more resilient to shocks. A rise in the oil price will make a challenging business even more difficult. But we are still forecasting that airlines will earn nearly $30 billion in 2017. That will more than cover the industry’s cost of capital, meaning that the industry is finally on a trajectory of normal profitably.
Flying in the holiday season is always a great reminder of how important aviation is to people — real people reconnecting with families or friends, taking time for a leisurely break or off on an exploratory venture.
For some, it is a once-a-year special event. Others may be seasoned road warriors concluding the year with some personal travel. Many fall in between. Planes are full of people with different travel profiles — but all are taking advantage of aviation’s unique selling point. That is the ability to cover vast geographies in minimal time. It is a unique freedom enjoyed only since the 20th century.
Aviation is the business of freedom. In 2017, we expect some 4 billion travelers to take advantage of it. And more than 50 million tonnes of cargo — global trade — will get to market by air in the coming year. It is a freedom that we must defend against the growing protectionist rhetoric, which is gaining popularity and geographic scope.
We must clear the way for the success of the business of freedom by reminding governments of aviation’s benefits, the policies that it needs to be successful; and the importance of keeping borders open for trade and welcoming to people.
I wish all of Airlines International readers a prosperous, connected, and exciting 2017.