Airlines are expected to post losses of $9 billion this year with an unprecedented 15 percent revenue drop that will see industry revenues shrink by $80 billion to $448 billion.
“I am a realist and I don’t see facts to support optimism. The industry is in survival mode. Whether this crisis is long or short, the world is changing. Travel budgets have been slashed and consumers will need to reduce their debt. It will not be business as usual in the post-crisis world. Governments, partners and airlines must use this crisis as an opportunity to build a stronger industry. That means resizing and reshaping,” IATA director general and CEO Giovanni Bisignani told top industry leaders gathered in Kuala Lumpur for the 65th IATA Annual General Meeting and World Air Transport Summit.
The international gathering was also attended by leaders of the Philippine air transport industry.
IATA’s Simplifying the Business Program has given the industry a headstart on cost cutting. In 2008, $4 billion in cost savings were achieved with 100 percent e-ticketing and the deployment of common use self-service (CUSS) kiosks.
“This was only the beginning. We have our eyes set on another $10 billion in savings by improving baggage management, travel processes and with e-freight,” Bisignani said.
Bisignani noted that the burden of change must be shared across the industry value chain. “Resizing and reshaping is not just a problem for airlines. Everyone in the value chain lives off our revenues. All must contribute to industry change,” he added.
He also urged a resizing and reshaping of the relationship between airlines and governments. “Our relationship with governments must move from punitive micro-regulation to joint problem solving,” he said, citing four areas for enhanced cooperation.
To make aviation greener, aviation’s emissions will fall by seven percent in 2009 – five percent from the fall in demand and two percent as a direct result of the industry’s united four-pillar strategy to address climate change.
“Airlines have taken a monumental decision. Today we have committed to achieving carbon-neutral growth by 2020,” Bisignani said. Airlines have set three important sequential goals: first, 1.5 percent annual improvement in fuel efficiency until 2020; second, carbon-neutral growth in 2020 and third, a 50 percent reduction in emissions by 2050.
To protect citizens, Bisignani said: “We must spend the $5.9 billion that airlines and their passengers pay for security more wisely by focusing on the threats, rather than the 99.9 percent of travelers who are not a risk.”
He also noted that airlines are investing billions in new avionics to fly more efficiently, reduce delays and improve environmental performance.
“Air transport is a responsible industry – in good times and in crisis. Today’s situation is unprecedented – the most difficult ever. Governments and partners must understand that we are struggling to survive in a new and harsh reality. We are, however, resilient and capable of great change. Together we must turn challenges into opportunities to be safer, greener and profitable,” he said.