IATA's 67th Annual General Meeting and World Air Transport Summit in Singapore brought together 700 leaders of the $600 billion global aviation industry for intense discussions on the industry's most important issues. Amirah Ibrahim attended and observed closely the unusual discussions This was the third time for Singapore to host the IATA's AGM. The first was in 1976, followed by 2004. "Singapore is IATA's home in Asia- Pacific. But even more importantly, Singapore is a great aviation success story," said Bisignani. Egypt was supposed to host this year's IATA AGM, but it was transferred to Singapore due to the political unrest in Egypt, which ousted president Mubarak and removed his regime. "We are optimistic that we will be able to bring IATA back to Egypt in 2013," commented Hussein Massoud, chairman of EgyptAir Holding Company as he attended the summit. "Even if another airline in the region would propose to host 2014 session, we hope the AGM members will accept Egypt's invitation to move to Cairo a year in 2013," he added. Massoud is a member of the IATA board of governors. AGM highlights included the State of the Industry address by Giovanni Bisignani, IATA's director general and CEO, and the release of a new industry financial outlook. "After a record- breaking profit in 2010, 2011 opened with a series of crises and shocks--unprecedented even for aviation. Rising oil prices, political unrest, natural disasters, human tragedies and even another volcano eruption have all challenged this industry," said Bisignani. Another focus for the delegates' discussions was Vision 2050, an initiative launched by Bisignani at IATA's 2010 AGM to identify the drivers of aviation's success by looking ahead four decades. Bisignani reviewed the past decade where he highlighted developments and improvements in safety issues. Safety improved 42 per cent, with a 2010 industry hull loss rate for western-built jet aircraft of 1 accident for every 1.6 million flights. Cost savings over the last decade achieved a lot for airlines. IATA contributed to a more cost efficient industry with $59 billion of savings over the period 2004--2009. IATA also led an industry consensus to address climate change by pledging to improve fuel efficiency an average of 1.5 per cent annually to 2020, capping net emissions from 2020 with carbon-neutral growth, and halving net emissions by 2050 compared to 2005. Bisignani highlighted some important unfinished business issues that required immediate solutions. "Passengers should be able to get from curb to gate with dignity--without stopping, stripping, unpacking, and certainly without being groped," said Bisignani. IATA called for security improvements that focus on replacing the 40- year-old airport checkpoint with a modern approach that is risk-based and powered by intelligence and technology. Sustainable biofuels, with their potential to cut the industry's carbon footprint by up to 80 per cent, could make a major contribution to the industry's programme to fulfill its climate change commitments. IATA demanded that Europe abandon its plans to include international aviation in its Emissions Trading Scheme (ETS) from 2012. "The EU ETS is a $1.5 billion cash grab that will do nothing to reduce emissions. Basta! (Enough). It's time to be serious about climate change and honest in developing global solutions," said Bisignani. Forecasts downgraded IATA further downgraded its 2011 airline industry profit forecast to $4 billion. This would be a 54 per cent drop compared with the $8.6 billion profit forecast in March and a 78 per cent drop compared with the $18 billion net profit (revised from $16 billion) recorded in 2010. On expected revenues of $598 billion, a $4 billion profit means a 0.7 per cent margin. "Natural disasters in Japan, unrest in the Middle East and North Africa, plus the sharp rise in oil prices have slashed industry profit expectations to $4 billion this year. That we are making any money at all in a year with this combination of unprecedented shocks is a result of a very fragile balance. The efficiency gains of the last decade and the strengthening global economic environment are balancing the high price of fuel. But with a dismal 0.7 per cent margin, there is little buffer left against further shocks," said Bisignani. According to IATA MENA Director Majdi Sabri, Middle East carriers will deliver a $100 million profit, down from $900 million in 2010. "Political unrest in parts of the region is hurting demand. The major airlines in the region are expected to continue to win market share on long- haul markets, flying passengers via Middle Eastern hubs," explained Sabri. "However, high fuel costs will weaken demand from key passenger segments and asset utilisation will be under downward pressure. Capacity growth of 15.5 per cent is expected to outstrip demand expansion of 14.6 per cent." Sabri revealed figures that African carriers were forecast to be the only region to post a loss, $100 million, in 2011. "Political unrest across Northern Africa is dampening demand, particularly in Egypt and Tunisia, which have proportionately large tourism industries," he indicatged. "Economies and air transport demand in many African countries have grown strongly but the local industry has struggled to turn this into profitable growth, hampered by poor infrastructure and restrictive government regulation. To compound the problem, capacity growth of 7.4 per cent will outstrip demand growth of 6.5 per cent," Sabri concluded. Lack of transparency Three panel discussions with key industry leaders were featured: the CEO Forum for top governmental officials and airlines CEOs, Aviation in a Dangerous World, and Partnering for Profitability: The first panel "Aviation in a dangerous world" was a dramatic session as the IATA came under fire for appearing to be "run for the few, by the few" and lacking full transparency. Qatar Airways CEO Akbar Al-Baker sparked off a tense debate about the structure of the airline industry body IATA and its finances. Al-Baker led a vocal onslaught by a number of international airlines over IATA's failure to show clear transparency in its processes. He questioned the auditing process for IATA's 2010 financial statement, and later questioned the "surprise" nomination of Etihad Chief Executive Officer James Hogan to fill the extra seat created to broaden the representation of carriers from the Middle East on IATA's board. "We believe such issues should not be surprises. Firstly, such decisions should be transparent and secondly, if geographical representation is the basis of the composition of the board, the regional airlines involved should be informed in advance of their regional allotments so that they can coordinate who should represent them." On the other hand, Al-Baker highlighted some of IATA's expenditures, including $18 million on travel, $58 million on data processing and IT and $29 million on outsourcing and consultancy. He called on IATA to justify "such large sums spent on travel" and the processes by which consultant and outsourcing contracts were awarded. The Emirates called for greater dialogue to ensure IATA was more transparent while International Airlines Group, the holding company of British Airways, sought clarity on the entire voting process of board members. New Leadership IATA announced major leadership changes at the conclusion of the 67th AGM and World Air Transport Summit in Singapore. Peter Hartman, president and CEO of KLM Royal Dutch Airlines succeeds David Bronczek, CEO of FedEx, as chairman of the IATA board of governors. This appointment is effective immediately and is for one year. "We must continue our joint efforts towards a sustainable aviation industry, to deliver the needed change to react quickly to crises, and also to proactively modernise processes and spread best practices," said Hartman. Tony Tyler, former chief executive of Cathay Pacific, was confirmed to succeed Giovanni Bisignani as IATA's director general and CEO. Tyler's appointment is effective from 1 July 2011, at which point Bisignani will become director general emeritus. "This is made all the more difficult because Giovanni has raised the bar high. I will be a strong advocate for all of our member airlines. My goal is to make the world a better place for airlines to do the important business of connecting 2.8 billion people and 48 million tons of cargo. 2011 Eagle awards IATA awarded its prestigious 2011 Eagle Awards to NAV CANADA and Prague Airport in recognition of their outstanding achievements in customer satisfaction, cost efficiency, and continuous improvement. IATA Exceptional Recognition awards were also presented to DGAC Chile (Chile's provider of air navigation services) and SCL (Santiago Airport). Eagle Awards, which honor air navigation service providers and airports, are based on the recommendations of the independent Eagle Awards Panel, chaired by Assad Kotaite, former secretary general of the International Civil Aviation Organisation. "In today's challenging environment, all providers need to make similar efforts in a spirit of genuine partnership," said Kotaite. The Eagle Awards Panel also made special mention of three air navigation service providers: Malta for its staff and charges reductions, Bulgarian Air Traffic Services Authority for its industry agreement with IATA and its reductions in charges, and Aeropuertos Españoles y Navegación Aérea and the government of Spain for their robust initiatives to reduce costs, even though these still need to be realised.
