This year, the airline industry is expected to record its ninth consecutive year of profitability and its fourth consecutive year of covering its cost of capital.
Such a period of extended profitability is without precedent in the postwar era. The change in industry fortunes is the result of some massive changes. And there is no time to stand still. More change is assured.
Consider air cargo. While revenues have yet to return to the peak year of 2011, demand certainly has come back. For the first time since 2010, cargo demand is growing faster than the demand for travel. But to take advantage of that growth and make it sustainable, cargo must continue to evolve. A digital transformation to remove archaic paper-based processes is critical.
Distribution is changing as well. The New Distribution Capability, so controversial a few years ago, is now mainstream. And a major modernization of IATA’s payment and settlement activities is being implemented. In March, Norway became the first country to implement the New Generation of IATA Settlement Systems or NewGen ISS. The same transformation will repeated across 140 other markets involving hundreds of airlines and tens-of-thousands of travel agents.
How we approach safety is also changing. Last year was an excellent year, perhaps the best, in terms of the fewest number of passenger fatalities and fatal accidents. But we also know there is room for improvement. Traditionally, accident investigations have guided safety improvements. As the number of accidents declines, however, the key to getting to zero accidents rests in better understanding what happens in the more than 100,000 flights operating safely every day. That’s what we’re doing with our Global Aviation Data Management initiative.
We have to find ways of working together to address emerging threats that are built on trust and dialogue
Some changes introduce new challenges as is the case with security. To protect our passengers and crew, we are dedicated to keeping pace with evolving threats to aviation. But we cannot keep heaping processes and procedures—and restrictions—on our customers. And we have to find ways of working together to address emerging threats that are built on trust and dialogue. The alternative is more events like last year’s PEDs ban, imposed without prior warning or consultation.
Change can also challenge us to live up to our values as a responsible industry—the business of freedom. Human trafficking is the fastest growing and second largest criminal industry in the world. Traffickers can abuse the good that aviation does by using it as a vector for their nefarious activities. The response is being led by governments and law enforcement agencies. And we are working with our membership to help airlines make an important contribution to fighting this
This issue of IATA’s flagship magazine also marks change. You will have noticed the new look and name for this publication, now called Airlines. Why the change from Airlines International? Even if airlines operate purely in a domestic market, they are part of the great global network that connects and enriches our world. And that’s our focus: airlines and the enormous value they bring.
Alexandre de Juniac: Director General and CEO, IATA