IATA director general Willie Walsh addresses the 2023 AGM in Istanbul.
ISTANBUL—IATA Director General Willie Walsh made clear the frustration of airlines with industry stakeholders—including OEMs, airports, air traffic management providers, and oil suppliers—that are failing to deliver or hiking fees.
In opening keynote remarks June 5 at the 79th IATA annual general meeting (AGM), Walsh said the pace of recovery from the pandemic was strong, with data showing passenger traffic at more than 90% of 2019 levels and the airline industry back into profitability.
Margins however, “are wafer thin,” Walsh said. With $803 billion of revenues, airlines will share $9.8 billion in net profit this year—or $2.25 per passenger.
“So, the value retained by airlines for the average plane trip won’t even buy a subway ticket in New York. Clearly that level of profitability is not sustainable,” he said.
Walsh said that many of those with whom airlines do business were adding to the pressures.
“OEM suppliers have been far too slow in dealing with supply chain blockages that are both raising costs and limiting our ability to deploy aircraft. Airlines are beyond frustrated. A solution must be found,” he said. “Oil companies did very well on our tab while the crack spread for jet fuel was at historic highs for most of 2022 until April this year.”
But Walsh saved his harshest criticism for the airports and air navigation service providers (ANSPs) that he said were shifting the costs of their inefficiencies to airlines.
“I can now confirm that [Amsterdam’s] Schiphol Airport has no shame. After a self-made operational disaster in 2022, the airport continues its three-year 37% charges hike—with 12% this year,” he said. “In South Africa, airports want a 38% charges increase, only to be outdone by [air traffic control] ATC demands for a 63% hike.”
In Europe, he said, airlines were paying for a €1.9 billion ($2 billion) addition to the ATM cost base in 2022 despite capacity and environment targets being missed and a tripling of ATC-related delays.
ACI World director general Luis Felipe de Oliveira responded to Walsh’s remarks about airport fees with the following statement to ATW: “The issue of airport charges is often a contentious topic that creates friction between airports and airlines. But I believe it’s a relatively small part of the problems we face in the future. We have common ground on about 90-95% of issues. My message is that we need to work together—there is no airport without an airline and there is no airline without an airport.”
Walsh also called out governments that were not acting globally on industry standards and regulations or were “inventing local solutions,” such as on passenger rights, that he said were not necessary.
A recent IATA survey of 4,700 passengers showed that 96% were satisfied with their last trip and 77% said air travel was good value for money.
