The International Airline Transport Association (IATA) believes that the aviation industry should be treated like “any other business” and Governments across the world should not single it out for taxes and regulations.
The IATA’s Director-General and CEO, Tony Tyler, said, “We don’t want a handout, but we also don’t want to be singled out for special fees and taxes, and commercial regulations that chill market creativity and initiative.”
His statement came just ahead of the IATA’s three-day annual meeting and the World Air Transport Summit which began here on Monday.
Over 240 airlines from across the world are registered as IATA’s members, accounting for a little less than 90 per cent of global air traffic.
About 700 aviation companies, including chiefs of airlines and aircraft-makers, are taking part in the conference to discuss issues such as aviation safety, environment, distribution and financial sustainability.
Air India’s Chairman and Managing Director Rohit Nandan and Jet Airways Chairman Naresh Goyal, who is also a member of the IATA Board of Governors, are attending the event.
Inaugurating the conference, Tyler said, “This is a very tough business. The day-to-day challenges of keeping revenues ahead of costs remain monumental. Many airlines are struggling. On average, airlines will earn about $4 for every passenger carried, which is less than the cost of a sandwich in most places.”
He said, “Generating even a small profit with oil prices at $108/barrel and a weak economic outlook is a major achievement. Improved performance is what’s keeping airlines in the black. Airlines are putting more people in seats. For the first time in history, the industry load factor is expected to average above 80 per cent for the year.
“And with ancillary revenues topping five per cent, it is clear that airlines have found new ways to add value to the travel experience and to shore-up the bottom line.”
Referring to Government policies towards aviation in Africa and elsewhere, he said authorities often tend to see aviation as an ‘elite’ product, rather than as a critical component of the continent’s economic infrastructure. As a result, it is heavily taxed – often in violation of the International Civil Aviation Organisation’s principles that prohibit the taxation of jet fuel for international operations.
The IATA upgraded its global outlook for the airline industry to a $12.7-billion in profit in 2013 on $711 billion in revenues. This is $2.1 billion higher than the $10.6 billion in profit projected in March this year.
Tyler said the global aviation industry is growing strongly on routes linked to emerging markets.
“We see strong growth among African (4.6 per cent), Asia-Pacific (4.7 per cent), Middle Eastern (10 per cent) and Latin American (2.8 per cent) airlines.”