Annual Review 2019 - IATA

 
Annual Review 2019 - IATA
Annual Review
2019
Annual Review 2019 - IATA
Contents

                                                                                                                 Contents
                           Contents
                           04        Members’ list

                           06        Chairman’s message

                           08        Director General and CEO’s message

                           10        Industry story

                           16        Safety

                           22        Security

                           24        Regulation and taxation

                           30        Infrastructure

                           36        Environment
 2                                                                                                                           3
                           40        Cargo

                           46        Passenger experience

                           52        Financial services

                           56        About IATA
 IATA Annual Review 2019

                                                                                                                    IATA Annual Review 2019
                           Alexandre de Juniac
                           Director General & CEO
                           International Air Transport Association Annual Review 2019
                           75th Annual General Meeting, Seoul, June 2019

                           Note: Unless specified otherwise, all dollar ($) figures refer to US dollars (US$).
Annual Review 2019 - IATA
Members’ list

                                                                                                                                                                                                                                                                   Members’ list
                            Members’ list                                                                                                       M
                                                                                                                                               Mahan Air
                                                                                                                                               Malaysia Airlines
                                                                                                                                                                              S
                                                                                                                                                                            S7 Airlines
                                                                                                                                                                            Safair
                                                                                                                                                                                                              V
                                                                                                                                                                                                             Vietjet
                                                                                                                                                                                                             Vietnam Airlines
                                                                                                                                                                                                                                            W
                                                                                                                                                                                                                                          Wamos Air
                                                                                                                                                                                                                                          WDL Aviation
                                                                                                                                               Malindo Air                  SAS                              Virgin Atlantic              WestJet
                                                          Asiana Airlines               Corsair International                                  Mandarin Airlines            SATA Air Acores                  Virgin Australia             White Airways
                             A
                                                          Atlantic Airways              Croatia Airlines              I                        Martinair Cargo              Saudi Arabian Airlines           Vistara                      Wideroe
                            Adria Airways                 Atlas Air                     Cubana                                                 MasAir                       SaudiGulf Airlines               Volaris
                            Aegean Airlines               AtlasGlobal                   Cyprus Airways              Iberia                     Mauritania Airlines          SCAT Airlines                    Volotea
                                                                                                                                                                                                                                            X
                            Aer Lingus                    Austral                       Czech Airlines              Icelandair                   International              SF Airlines                      Vueling
                            Aero Republica                Austrian                                                  Interjet                   MEA                          Shandong Airlines                                             Xiamen Airlines
                            Aeroflot                      Avianca                         D                         Iran Air                   MIAT Mongolian Airlines      Shanghai Airlines                                             XL Airways France
                            Aerolineas Argentinas         Avianca Brasil                                            Iran Airtour Airline       Mistral Air                  Shenzhen Airlines
                            Aeromexico                    Avianca Costa Rica            Delta Air Lines             Iran Aseman Airlines       MNG Airlines                 Sichuan Airlines
                            Africa World Airlines         Avianca Ecuador               DHL Air                     Israir                     Montenegro Airlines          Silk Way West Airlines
                            Aigle Azur                    Avianca Peru                  DHL Aviation                                           Myanmar Airways              SilkAir
                            Air Algerie                   Azerbaijan Airlines                                                                    International              Singapore Airlines
                                                                                                                     J
                            Air Arabia
                            Air Astana
                                                          Azores Airlines
                                                          Azul Brazilian Airlines
                                                                                          E
                                                                                                                    Japan Airlines
                                                                                                                                                                            SKY Airline
                                                                                                                                                                            Smartavia
                                                                                                                                                                                                                       New Members
                                                                                                                                                N
                            Air Austral                                                 Eastar Jet                  Jazeera Airways                                         Solomon Airlines
                            Air Baltic                                                  Egyptair                    Jeju Air                   NCA Nippon Cargo Airlines    Somon Air                                  IATA’s membership continues to grow.
                                                            B
                            Air Botswana                                                El Al                       Jet Airways                Neos                         South African Airways                      Between June 2017 and May 2018,
                            Air Burkina                   Bahamasair                    Emirates                    Jet Lite India             Nesma Airlines               South African Express                      13 airlines joined IATA’s ranks, from all
                            Air Cairo                     Bangkok Airways               Ethiopian Airlines          JetBlue                    Nile Air                        Airways                                 parts of the globe and representing a
                            Air Caledonie                 Batik Air                     Etihad Airways              Jin Air                    Nordwind Airlines            SpiceJet                                   multitude of business models.
                            Air Canada                    Belavia Belarusian Airlines   EuroAtlantic Airways        Jordan Aviation            Nouvelair                    SriLankan Airlines
                            Air Caraibes                  BH Air                        European Air Transport      Juneyao Airlines                                        SunExpress                                 In Africa, Congo Airways, the flag
  4                         Air China                     Biman Bangladesh Airlines     Eurowings
                                                                                                                                                O                           Suparna Airlines                           carrier of the Democratic Republic                        5
                            Air Corsica                   Binter Canarias               EVA Air                      K                                                      Surinam Airways
                                                                                                                                                                                                                       of Congo, applied for and gained
                            Air Dolomiti                  Blue Air                      Evelop Airlines                                        Okay Airways                 SWISS
                            Air Europa                    Blue Panorama                                             Kenya Airways              Olympic Air                  Syrianair
                                                                                                                                                                                                                       membership.
                            Air France                    BoA Boliviana de Aviacion                                 Kish Air                   Oman Air
                                                                                          F                                                                                                                            Asia-Pacific and North Asia boasts
                            Air India                     Braathens Regional Aviation                               KLM                        Onur Air
                                                                                                                                                                              T                                        seven new members. Fuzhou Airlines,
                            Air Italy                     British Airways               FedEx Express               Korean Air                 Overland Airways
                            Air Koryo                     Brussels Airlines             Fiji Airways                Kunming Airlines                                        TAAG Angola Airlines                       Kunming Airlines and Urumqi Air
                            Air Macau                     Bulgaria Air                  Finnair                     Kuwait Airways               P                          TACA                                       are passenger-focused airlines.
                            Air Madagascar                                              flybe                                                                               TACV Cabo Verde Airlines                   Hong Kong Air Cargo, meanwhile,
                            Air Malta                                                   flydubai                                               Pegas Fly                    Tame                                       concentrates on the cargo market.
                                                           C                                                         L
                            Air Mauritius                                               FlyEgypt                                               Pegasus Airlines             TAP Portugal                               Thai Smile, a wholly-owned subsidiary
                            Air Moldova                   CAL Cargo Airlines            Freebird Airlines           LAM                        PGA Portugalia Airlines      TAROM                                      of Thai Airways, flies regional routes
                            Air Namibia                   Camair-Co                     Fuzhou Airlines             Lao Airlines               Philippine Airlines          Tassili Airlines
                                                                                                                                                                                                                       out of Bangkok, Spice Jet from India,
                            Air New Zealand               Cambodia Angkor Air                                       LATAM Airlines Argentina   PIA Pakistan International   Thai Airways International
                            Air Niugini                   Capital Airlines                                          LATAM Airlines Brasil        Airlines                   Thai Lion Air
                                                                                                                                                                                                                       and Solomon Airlines, the national
                                                                                          G                                                                                                                            carrier of the Solomon Islands, make
                            Air Nostrum                   Cargojet Airways                                          LATAM Airlines Colombia    Precision Air                Thai Smile
                            Air Peace                     Cargolux                      Garuda Indonesia            LATAM Airlines Ecuador                                  Tianjin Airlines                           up the remainder of Asia-Pacific’s
                            Air Serbia                    Caribbean Airlines            Georgian Airways            LATAM Airlines Group                                    TUIfly                                     latest IATA members.
                                                                                                                                                Q
                            Air Seychelles                Carpatair                     Germania Flug AG            LATAM Airlines Paraguay                                 Tunisair
                            Air Tahiti                    Cathay Dragon                 GOL Linhas Aereas           LATAM Airlines Peru        Qantas                       Turkish Airlines                           In Europe there were four new IATA
                            Air Tahiti Nui                Cathay Pacific                Gulf Air                    LATAM Cargo Brasil         Qatar Airways                T’way Air                                  members. Air Dolomiti, part of the
                            Air Transat                   Cayman Airways                GX Airlines                 LATAM Cargo Chile                                                                                  Lufthansa Group, accompanied
                            Air Vanuatu                   China Airlines                                            LIAT Airlines                R                            U                                        Cyprus Airways, Germania Flug AG,
                            AirBridgeCargo Airlines       China Cargo Airlines                                      Loong Air
                                                                                         H                                                                                                                             and XL Airways France in joining.
                            Aircalin                      China Eastern                                             LOT Polish Airlines        Ravn Alaska                  Ukraine International Airlines
                            Airlink                       China Express Airlines        Hahn Air                    Lucky Air                  Rossiya Airlines             UNI AIR
                            Alaska Airlines               China Postal Airlines         Hainan Airlines             Lufthansa                  Royal Air Maroc              United Airlines
                                                                                                                                                                                                                       Ravn Alaska, a US-based airline
                                                                                                                                                                                                                       that specializes in serving smaller
  IATA Annual Review 2019

                                                                                                                                                                                                                                                                        IATA Annual Review 2019
                            Alitalia                      China Southern Airlines       Hawaiian Airlines           Lufthansa Cargo            Royal Brunei                 UPS Airlines
                            Allied Air                    CityJet                       Hebei Airlines              Lufthansa CityLine         Royal Jordanian              Ural Airlines                              communities in its home state of
                            AlMasria Universal Airlines   Comair                        Hi Fly                      Luxair                     RwandAir                     Urumqi Air                                 Alaska, also became an IATA member.
                            American Airlines             Condor                        Hong Kong Air Cargo                                                                 UTair
                            ANA                           Congo Airways                 Hong Kong Airlines                                                                  Uzbekistan Airways
                            Arik Air                      Copa Airlines                 Hong Kong Express Airways
                            Arkia Israeli Airlines        Corendon Airlines
Annual Review 2019 - IATA
H.E. Akbar Al Baker, Chair, IATA Board of Governors & CEO Qatar Airways

                                                                                                                                                                                                                                                                                                                               H.E. Akbar Al Baker, Chair, IATA Board of Governors & CEO Qatar Airways
                                                                          Future air travel must be                                                                                                   There is growing pressure on the
                                                                                                                                                                                                      environmental performance of aviation
                                                                                                                                                                                                      and the industry must continue to do
                                                                                                                                                                                                                                                 IATA Board Of Governors 2018–2019

                                                                          effortless and sustainable
                                                                                                                                                                                                                                                 CHAIR OF THE BOARD        María José                ALSO SERVED
                                                                                                                                                                                                      all it can. But people who shun aviation   Akbar Al Baker            Hidalgo Gutiérrez         (To June 2018)
                                                                                                                                                                                                                                                 Chief Executive Officer   Chief Executive Officer   Safwat Musallam
                                                                                                                                                                                                      or who think aviation should be taxed
                                                                                                                                                                                                                                                 QATAR AIRWAYS             AIR EUROPA                Chairman and Chief
                                                                                                                                                                                                      don’t realize what an economic collapse                                                        Executive Officer
                                                                                                                                                                                                      would happen. Aviation supports 65         MEMBERS                   Rupert Hogg               EGYPTAIR
                                                                                                                                                                                                      million jobs and $2.7 trillion in global   Ahmed Adel                Chief Executive Officer

                                                                          H.E. Akbar Al Baker, Chair, IATA Board                                                                                      GDP. Without this unique means of          Chairman and Chief        CATHAY PACIFIC            (To October 2018)
                                                                                                                                                                                                                                                 Executive Officer                                   Franck Terner
                                                                                                                                                                                                      transportation, people will not be able

                                                                          of Governors & CEO Qatar Airways
                                                                                                                                                                                                                                                 EGYPTAIR HOLDING CO       Harry Hohmeister          Chief Executive Officer
                                                                                                                                                                                                      to cross the world to do business, to      (representing EGYPTAIR)   Chairman                  AIR FRANCE
                                                                                                                                                                                                      boost local economies, or to meet                                    AUSTRIAN AIRLINES
                                                                                                                                                                                                      their loved ones.                          Yuji Akasaka                                        (To November 2018)
                                                                                                                                                                                                                                                 President                 Alan Joyce                Tan Wangeng
                                                                                                                                                                                                                                                 JAPAN AIRLINES            Chief Executive Officer   President and Chief
                                                                          What were your top priorities              An effortless travel experience will be   It is important to the future of our   Do governments fully appreciate                                      QANTAS                    Executive Officer
                                                                          as IATA Chairman?                          so important going forward. Travelers     industry and to the future of our      the contribution of aviation?              Saleh N. Al Jasser                                  CHINA SOUTHERN
                                                                                                                     are becoming tired of overregulation,     children and grandchildren that                                                   Director General          Liu Shaoyong              AIRLINES
                                                                          It was to represent, lead, and serve our   the endless processing they must          there is enough investment by          Governments are using aviation as a        SAUDI ARABIAN             Chairman
                                                                                                                                                                                                                                                 AIRLINES                  CHINA EASTERN             (To March 2019)
                                                                          industry with strength and humility.       suffer, and the laborious security        aircraft manufacturers, engine         cash cow. For example, they collect                                  AIRLINES                  David Bronczek
                                                                                                                     checks. Let me be clear, I don’t blame    manufacturers, and other supply        taxes for the environment but what         Enrique Cueto                                       President and Chief
                                                                          IATA plays a very important part in our    the authorities for these thorough        chain partners to produce equipment    do they do with the money? Nobody          Chief Executive Officer   Sebastian Mikosz          Operating Officer
                                                                          industry. As a crucial instrument for      processes when our world is passing       that promotes sustainability and       knows. If governments were really          LATAM AIRLINES            Group Managing            FEDEX CORPORATION
                                                                                                                                                                                                                                                                           Director and CEO
                                                                          airlines, it is important that members,    through a very difficult time. But the    makes our industry more efficient.     serious about the environment, they
                                                                                                                                                                                                                                                 German Efromovich         KENYA AIRWAYS             (To March 2019)
                                                                          governments, and the general public        industry, through IATA, can speak                                                would comply with the international        Chairman                                            Naresh Goyal
                                                                          perceive IATA in the right way. This is    in one voice and help authorities                                                agreements that they sign. Instead,        AVIANCA                   Pham Ngoc Minh            Chairman
                                                                          not just a rubber stamp organization.      and regulators achieve our shared                                                they hit aviation with so-called green                               Chairman                  JET AIRWAYS
                                                                          But we’ve started the process to           security goals, while improving the                                              taxes to meet general budgetary            Pieter Elbers             VIETNAM AIRLINES
                                                                                                                                                                                                                                                 President and Chief                                 (To April 2019)
              6                                                           improve the association’s activities       passenger experience.                                                            requirements and do nothing for the        Executive Officer         Oscar Munoz               Yang Ho Cho
                                                                                                                                                                                                                                                                                                                                                    7
                                                                          and it was my privilege and duty                                                                                            environment. So they are taking the        KLM ROYAL DUTCH           Chief Executive Officer   Chairman and Chief
                                                                          during the past year to make sure that     What steps should the industry                                                   money from us but doing very little.       AIRLINES                  UNITED AIRLINES           Executive Officer
                                                                          we kept on developing initiatives while    take to earn a better reputation                                                                                                                                                KOREAN AIR
                                                                                                                                                                                                                                                 Mohamad El-Hout           Christine
                                                                          providing greater accountability and       for sustainability?                                                              Governments must reinvest the
                                                                                                                                                                                                                                                 Chairman and Director     Ourmières-Widener
                                                                          enhanced oversight.                                                                                                         money from environmental taxes in          General                   Chief Executive Officer
                                                                                                                     The most important thing is                                                      the industry to help us achieve further    MIDDLE EAST AIRLINES      FLYBE LIMITED
                                                                          Together with the board of governors,      the leadership with CORSIA.                                                      sustainability success.
                                                                          there was a continued effort to            The industry has long been                                                                                                  Luis Gallego Martín       Douglas Parker
                                                                                                                                                                                                                                                 Chief Executive Officer   Chairman and Chief
                                                                          ensure that these improvements             a leader in environmental                                                        Any final thoughts on the year?            IBERIA                    Executive Officer
                                                                          endure in the long term.                   efforts and aims to halve                                                                                                                             AMERICAN AIRLINES
                                                                                                                     net carbon emissions                                                             I’d like to thank all my colleagues        Tewolde GebreMariam
                                                                          Where do you see the most                  by 2050 compared                                                                 on the IATA Board for their active         Group Chief Executive     Calin Rovinescu
                                                                                                                                                                                                                                                 Officer                   President and Chief
                                                                          important future innovations               with 2005.                                                                       participation throughout the year, and
                                                                                                                                                                                                                                                 ETHIOPIAN AIRLINES        Executive Officer
                                                                          for the airline industry?                                                                                                   their commitment to building a safer,                                AIR CANADA
                                                                                                                                                                                                      stronger, and better industry. I must      Goh Choon Phong
                                                                          IATA has a number of important                                                                                              make a particular mention of Mr. Yang      Chief Executive Officer   Benjamin Smith
                                                                          projects underway. New Distribution                                                                                         Ho Cho, Chairman and CEO of Korean         SINGAPORE AIRLINES        Chief Executive Officer
                                                                                                                                                                                                                                                                           AIR FRANCE / KLM
                                                                          Capability, One ID, and Radio                                                                                               Air, who sadly passed away in April.       Rickard Gustafson         (representing AIR
                                                                          Frequency Identification (RFID),                                                                                            He will be much missed from the IATA       President and Chief       FRANCE)
                                                                          for example, are innovations which                                                                                          Board, by his airline colleagues, and      Executive Officer
                                                                          will make future travel effortless                                                                                          most of all by his family and friends.     SAS                       Carsten Spohr
                                                                                                                                                                                                                                                                           Chairman and Chief
                                                                          and seamless for passengers. And                                                                                            His contribution to aviation and to
                                                                                                                                                                                                                                                 Robin Hayes               Executive Officer
                                                                          they will do so while also bringing                                                                                         Korea was incalculable.                    President and Chief       LUFTHANSA
                                                                          efficiencies into our industry and                                                                                                                                     Executive Officer
                                                                          letting airlines keep their brand                                                                                                                                      JETBLUE AIRWAYS           Wang Changshun
                                                                          and identity.                                                                                                                                                                                    Chairman
                                                                                                                                                                                                                                                 Pedro Heilbron            CHINA SOUTHERN
                                                                                                                                                                                                                                                 Executive President and   AIRLINES
             IATA Annual Review 2019

                                                                                                                                                                                                                                                                                                                                        IATA Annual Review 2019
                                                                                                                                                                                                                                                 Chief Executive Officer
                                                                                                                                                                                                                                                 COPA AIRLINES
Annual Review 2019 - IATA
Alexandre de Juniac, Director General and CEO

                                                                                                                                                                                                                                                                                                                  Alexandre de Juniac, Director General and CEO
                                                Aviation is an amazing                                                                                                              Preparations for CNG took a giant step
                                                                                                                                                                                    in January 2019 with airlines beginning
                                                                                                                                                                                    their emissions monitoring for the
                                                                                                                                                                                                                               The industry agenda is broad.
                                                                                                                                                                                                                               Travelers will appreciate the
                                                                                                                                                                                                                               technology driven innovations such
                                                                                                                                                                                                                                                                          IATA is proud to lead, represent
                                                                                                                                                                                                                                                                          and serve the airline industry as
                                                                                                                                                                                                                                                                          we address these and other issues

                                                industry. I call it the
                                                                                                                                                                                    Carbon Offsetting and Reduction            as the One ID program to smoothly          with governments and industry
                                                                                                                                                                                    Scheme for International Aviation          move travelers through the airport         stakeholders. Our vision is to work
                                                                                                                                                                                    (CORSIA). Agreed by the International      with a single biometric token, and         together with our almost 300 member

                                                business of freedom
                                                                                                                                                                                    Civil Aviation Organization (ICAO) in      plans to enhance baggage tracking.         airlines to shape the future growth
                                                                                                                                                                                    2016, CORSIA was approved with the         Parallel efforts to modernize slot         of a safe, secure and sustainable air
                                                                                                                                                                                    full support—indeed with the urging—       allocation rules, reform airspace          transport industry that connects and
                                                                                                                                                                                    of the aviation industry.                  management and find better means           enriches our world.
                                                                                                                                                                                                                               to fund infrastructure development

                                                Alexandre de Juniac, Director General and CEO
                                                                                                                                                                                    CORSIA is just one pillar of the           will deliver less visible but equally
                                                                                                                                                                                    industry’s commitment to stabilize         important gains.
                                                                                                                                                                                    net carbon emissions from 2020, and

                                                I
                                                                                                                                                                                    to cut its net carbon footprint to half    People
                                                  n 2018 the world’s airlines provided        The threat of trade wars and             We can be fully confident that a             the 2005 level by 2050. And science        People are the key resource to
                                                  about 4 billion passengers the              protectionist activity also looms        technical solution will be found to          tells us that fulfilling this will be      take aviation forward. Our industry
                                                  freedom to travel over a global             large. Globalization has made our        address the issues that have been            consistent with the 1.5-degree-goal        provides high quality jobs that
                                                  network of some 22,000 routes.              world more prosperous. And aviation      identified. But there are critical           of the Paris Agreement.                    add value to economies in which
                                                The average cost of this transport            will play a central role in enabling     questions still to be answered. What                                                    they are located. Aviation careers         Alexandre de Juniac
                                                was half that of two decades ago.             a more inclusive globalization that      more can be done to ensure the safe          But there is urgent need to more           are attractive, but there is growing       Director General and CEO
                                                And since 2010 the carbon footprint           spreads its benefits more evenly.        introduction of new technology?              concretely demonstrate the ambition        concern about how the industry
                                                per passenger has reduced by                  But we must be firm in insisting on      How can we reinforce collective              of our commitments. And we must be         will find sufficient technically skilled
                                                aboout 2.8% per year.                         borders that are open to people and      international confidence into state          relentless in our efforts to insist that   employees quickly enough to keep
                                                                                              to trade, or the benefits of aviation    certification systems? And how can           CORSIA is effectively implemented,         pace with demand.
                                                Last year, airlines also enabled the          will be severely curtailed.              authorities and the industry coordinate      that strategic investments are made
                                                freedom to do business globally by                                                     better to maintain public confidence?        to commercialize sustainable aviation      There are no easy answers, but
         8                                      transporting 64 million tonnes of             Over the next two decades, the                                                        fuels and that the bottlenecks in          it is clear that increasing female                                                                             9
                                                cargo to markets around the world.            demand for air transport is expected     Security                                     air traffic management are sorted.         participation in the industry is
                                                This activity supported a third of            to double. The ability to successfully   Security is an equal partner to              Together with continued investment         a tremendous opportunity.
                                                global trade by value, generated 65           meet this demand will require the        safety. Flying is secure. But the level      in greener technologies, these will        Finding ways to balance gender
                                                million jobs and underpinned $2.7             industry to excel in several areas.      of international cooperation and             deliver a significant reduction in         diversity in all job categories
                                                trillion of GDP.                              And, as aviation remains a highly        information sharing by governments           aviation’s carbon footprint.               will provide huge potential to
                                                                                              regulated industry, governments will     who have the primary responsibility                                                     strengthen our business and
                                                In 2018 the world’s airlines earned           play a key role. With the 40th ICAO      for security continues to lag behind         Infrastructure                             ensure the people we need to
                                                a collective net profit of $30 billion.       Assembly scheduled for late in 2019      that of safety. Moreover, many states        Meeting the demand for connectivity        sustain the industry.
                                                Industry revenues topped $812                 we have an important opportunity         struggle to implement the baseline           depends on availability of
                                                billion and 8% return on invested             to engage government action at the       international security standards in          infrastructure. In many parts of the       Your association
                                                capital was generated.                        global standard-setting level.           Annex 17 of the Chicago Convention.          world we already struggle with the         The industry counts on IATA.
                                                                                                                                                                                    physical limitations of available          Global standards developed
                                                In each year since 2010 the airline           Safety                                   The industry strongly supports the           airports and airspace. As demand           by our members through
                                                industry earned an aggregate profit.          Air transport is the safest form of      development of the Global Aviation           grows that will only get more acute.       IATA underpin day-to-day
                                                And since 2015 that profit has                long-distance travel. And all involved   Security Plan through ICAO as a                                                         operations worldwide. Our
                                                exceeded the average cost of capital.         with aviation are committed to making    means of taking a major forward.             Reminding governments to work              efficient settlement systems now
                                                While some airlines continue to face          it ever safer. That was confirmed                                                     with the industry to build sufficient      settle over $460 billion annually.
                                                financial challenges, this nine-year          again in 2018 when the industry’s        Sustainability                               infrastructure at affordable cost          And IATA’s products and services
                                                profitability streak at the industry level    safety performance showed marked         The October 2018 publication of              will continue to be a long-term top        are tailored to help the success of
                                                marks a major shift from the sector’s         improvement on the ten year average.     a UN assessment of the world’s               priority. And in the short term there is   our members while funding industry
                                                historic boom-bust financial cycle.           But two tragic crashes with the newly    progress towards containing climate          enormous potential to deliver greater      activities. As your trade association,
                                                                                              introduced Boeing 737 Max have           change to the Paris Agreement’s              efficiency and a better customer           IATA’s global workforce is fully
                                                The industry’s newly found financial          knocked the industry’s heretofore        aims raised alarm bells. Aviation,           experience with the infrastructure         focused on adding value to the
                                                resilience enables it to weather shifts       impressive reputation.                   along with all industries, is coming         we currently have.                         businesses of our members.
                                                in the operating environment without                                                   under even greater environmental
                                                plunging into crisis. Nonetheless, we                                                  scrutiny. In Europe, the pressure is
                                                expect profits to be squeezed in 2019                                                  particularly intense.
        IATA Annual Review 2019

                                                                                                                                                                                                                                                                                                                                     IATA Annual Review 2019
                                                as a result of oil price volatility, rising
                                                costs for labor and infrastructure,                                                    We must not forget that aviation was
                                                ever-increasing taxation, and a                                                        among the first industries, if not the
                                                tapering of demand.                                                                    first, to outline a plan to achieve carbon
                                                                                                                                       neutral growth (CNG). And we are
                                                                                                                                       committed to achieve it from 2020.
Annual Review 2019 - IATA
Industry story

                                                    Industry story
                            01  Industry story
                            Empowering industry
                            profitability despite
                            challenges

 10                                                         11
  IATA Annual Review 2019

                                                          IATA Annual Review 2019
Annual Review 2019 - IATA
2. Air tourist spending and value
                                                                                                                                                            1. Unique city pairs and real transport costs                                                  of trade carried by air
                                                                                                                                                          22,000                                                                       1.6
Industry story

                                                                                                                                                                                                                                                                                                                     Industry story
                                                                                                                                                                                                                                             950                                                             8,000
                                                                                                                                                                               Number of unique city pairs                                               Air tourist spending ($ billion)
                                                                                                                                                                               Real cost of air transport ($/RTK, in 2014 prices)      1.5               Value of trade by air ($ billion)
                                                                                                                                                          20,000                                                                             850                                                             7,000
                                                                                                                                                                                                                                       1.4
                                                                                                                                                          18,000                                                                       1.3   750                                                             6,000
                            Air transport connected more              Passenger demand                         The US O-D passenger market                                                                                             1.2
                                                                                                                                                          16,000                                                                             650                                                             5,000
                            cities at lowered cost                    was again robust                         remained the world’s largest                                                                                            1.1
                            In 2018, airlines continued to increase   Demand for air passenger services        Although China’s domestic market           14,000                                                                             550                                                             4,000
                                                                                                                                                                                                                                       1.0
                            the number of city-pair routes            remained strong in 2018, with            added the most passenger journeys
                                                                                                                                                          12,000                                                                       0.9   450                                                             3,000
                            globally. Almost 22,000 city pairs are    industry-wide revenue passenger          in 2018, the US domestic market—
                                                                                                                                                                                                                                       0.8
                            now regularly serviced by airlines.       kilometers (RPK) increasing 7.4%.        where almost 590 million passenger         10,000                                                                             350                                                             2,000
                            This is an increase of 1,300 over the     This represented a slowdown from         journeys were undertaken in 2018—                                                                                       0.7

                            number of city-pair connections           the decade-high pace recorded in         continues to be the world’s largest          8,000                                                                      0.6   250                                                             1,000

                            in 2017. Strong improvements in           2017, of about 8%, but still exceeded    single O-D market. China comes

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                            connectivity and in costs over the        the long-run industry average            second, with 515 million, followed
                            past two decades—the real, inflation-     growth rate by around 2 percentage       by India some distance back, at 116
                            adjusted cost of air transport has        points. Air passenger demand was         million. Unsurprisingly, domestic                               3. Accessibility of air travel                                       4. RPK versus world GDP growth
                            halved in the past 20 years and           underpinned by a generally solid         markets dominated the rankings.
                                                                                                                                                              5.0                                                                      50     16
                            declined further in 2018—help to          global economic backdrop, especially     The top 12 markets accounted for                                           Scheduled air pax (billion)                                                       RPK (% year on year)
                                                                                                                                                                                                                                                                                                             9

                            ensure that aviation, the “business       earlier in the year, which, in turn,     almost half of the total number of O-D         4.5                         Number of months before next trip            45     14                            World GDP (% year on year)
                                                                                                                                                                                                                                                                                                             7
                            of freedom,” continues to distribute      supports jobs, incomes, and business     passenger journeys in 2018.                                                                                             40     12
                                                                                                                                                              4.0
                            its array of benefits to consumers,       activity, and by fierce competition in     Chart 6                                                                                                               35     10
                                                                                                                                                                                                                                                                                                             5
                            suppliers, and economies globally.        the industry, which helps to ensure                                                     3.5
                                                                                                                                                                                                                                       30      8
                              Chart 1                                 airfares remain affordable               Air freight demand                             3.0                                                                      25      6                                                             3
                                                                      to travelers.                            growth eased                                                                                                            20      4
                                                                                                                                                              2.5
                            Air transport supported                     Chart 4                                Air freight grew slightly in 2018                                                                                                                                                             1
                                                                                                                                                                                                                                       15      2
                            economic growth and                                                                compared with 2017. Buoyed by                  2.0
                            prosperity through                        China added the most                     the global inventory restocking                1.5
                                                                                                                                                                                                                                       10      0                                                             -1

                            tourism and trade                         passenger journeys                       cycle, industry-wide freight tonne                                                                                      5      -2
                                                                                                                                                              1.0                                                                                                                                            -3
                            Air transport is central to world         There were close to 4 billion origin-    kilometers (FTK) increased 9.7% in                                                                                      0      -4

                            tourism and trade. Tourists traveling     destination (O-D) passenger journeys     2017. In 2018, FTK likewise grew,

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                            internationally by air are estimated      worldwide in 2018. Among them,           but a mere 3.4%. This was in line
 12                         to have spent about $850 billion in       domestic routes within China again       with global trade volumes, which                                                                                                                                                                              13
                            2018, an increase of more than 10%        provided the largest incremental         trended broadly sideways in the                       5. Top 10 increasing O-D markets                                              6. Largest O-D air passenger markets
                            over 2017. The additional number of       increase in passenger trips, adding      first part of 2018 and contracted in
                            city-pair connections and the lower       just under 50 million journeys. The      the year’s fourth quarter. The lesser        China domestic                                                      10.5         600                                                             60%

                            cost of air transport also boosts trade   domestic markets of the United           increase for air freight also reflected                                                                          5.7
                                                                                                                                                               US domestic
                                                                                                                                                                                                                                                                                                             50%
                            in goods and services and heightens       States and India once more ranked        the typical slowdown following an                                                                                             500
                                                                                                                                                             India domestic                                                     18.5
                            foreign direct investment and other       second and third, with around 30         inventory rebuild.
                                                                                                                                                                                                                                9.3          400                                                             40%
                            important economic flows. Air             million and 18 million more passenger                                              Indonesia domestic

                            transport accounts for only a small,      journeys, respectively. Of the main      The second half of the year also            Russia domestic                                                      13.3
                                                                                                                                                                                                                                             300                                                             30%
                            less than 1%, proportion of world         markets that IATA regularly tracks,      saw the industry face a number of           Mexico domestic                                                      12.0
                                                                                                                                                                                                                                                                            Market size (million pax)
                            trade by volume but for a much larger     India’s domestic market showed the       headwinds. There was a moderation            Spain domestic                 % year-on-year growth rates          13.3         200                             Cumulative share of total pax
                                                                                                                                                                                                                                                                                                             20%
                            share by value, of about 33%. In 2018,    fastest growth in passenger numbers,     in world trade—a result in part of the       Japan domestic                                                      3.7
                            the value of goods carried by air is      which increased 18.5% in 2018. That      heightened trade tensions between             Brazil domestic                                                    4.5
                                                                                                                                                                                                                                             100                                                             10%
                            estimated to have been $6.7 trillion.     India recorded its 50th consecutive      the United States and China—and
                                                                                                                                                              Iran domestic                                                     32.8
                              Chart 2                                 month of double-digit, year-on-year      a deterioration in some leading                                                                                                 0                                                             0%
                                                                                                                                                                               0 5 10 15 20 25 30 35 40 45 50
                                                                      growth in RPK in October highlights      indicators, such as the new export

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                                                                      the consistently strong performance      orders component of the global                                           Additional pax in 2018 (million)

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                            for more people                           of its market                            Purchasing Managers Index. Having

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                            Worldwide air passenger numbers             Chart 5                                said that, not all air freight sectors    7. Air freight versus global goods trade growth
                            continued to rise, exceeding 4.3                                                   were equally affected. E-commerce
                                                                                                                                                                                Industry FTK (% year on year)
                            billion journeys in 2018. Connecting                                               and pharmaceuticals continued to                25                                                                      25
                                                                                                                                                                                World goods trade (% year on year)
                            cities directly cuts the cost of air                                               perform strongly.
                                                                                                                                                               20                                                                      20
                            transport by saving time for shippers                                                Chart 7
                            and travelers. Combined with                                                                                                       15                                                                      15

                            cheaper fares, this enables more                                                                                                   10                                                                      10
                            people to fly more often. In 2000, the
                                                                                                                                                                 5                                                                     5
                            average citizen flew just once every
                            44 months. In 2018, the time between                                                                                                 0                                                                     0
  IATA Annual Review 2019

                                                                                                                                                                                                                                                                                                                           IATA Annual Review 2019
                            trips had halved, to just 21 months.
                                                                                                                                                                -5                                                                     -5
                              Chart 3
                                                                                                                                                              -10                                                                      -10

                                                                                                                                                              -15                                                                      -15
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Annual Review 2019 - IATA
8. Regional passenger and                                                                                          9. Industry passenger and
                                                                                                                                                                                                                        freight demand outcomes                                                                                                freight load factors
                                                                                                                                                                                                                                                                                                                         85                                                                         56
Industry story

                                                                                                                                                                                                                                                                                                                                                                                                         Industry story
                                                                                                                                                                                              10%                                                                                     10%
                                                                                                                                                                                                                                               RPK
                                                                                                                                                                                                                                                                                                                         83
                                                                                                                                                                                                                                               FTK                                                                                                                                                  54
                                                                                                                                                                                                        8%                                                                            8%                                 81
                                                                                                                                                                                                                                                                                                                                                                                                    52
                                                                                                                                                                                                                                                                                                                         79
                            Regional outcomes for                       December. The price of jet fuel has        Regional financial                                                                   6%                                                                            6%                                 77
                                                                                                                                                                                                                                                                                                                                                                                                    50

                            passenger and freight                       subsequently begun to rise in the early    performance was again mixed                                                                                                                                                                           75                                                                         48
                            demand were mixed                           months of 2019. But the sharp and          Regionally, the industry’s financial                                                 4%                                                                            4%                                 73
                                                                                                                                                                                                                                                                                                                                                                                                    46
                            Regions saw varied performance in           unanticipated nature of the decline        performance remained considerably
                                                                                                                                                                                                                                                                                                                         71
                            passenger and freight demand in 2018.       at year-end means that many airlines       varied. The financial performance                                                                                                                                                                                                                                                44
                                                                                                                                                                                                        2%                                                                            2%                                 69
                            Airlines from Asia-Pacific led the way      that hedge their fuel exposure are         of the North American airlines                                                                                                                                                                                           Passenger load factor (% of available capacity)         42
                            in passenger growth, which increased        unlikely to have seen much benefit         continued to lead the way, delivering                                                                                                                                                                 67                 Freight load factor (% of available capacity)
                            9.5% in that region, followed by airlines   from the price adjustment so far.          an operating (EBIT) margin of 9.1% in                                                0%                                                                            0%                                 65                                                                         40

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                            in Europe and in Latin America. For                                                    2018. Airlines in Europe, Asia-Pacific,

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                            freight, it was the Latin American                                                     and Latin America also yielded

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                            carriers that outperformed, followed        Airlines raised their achieved             solid profitability, while carriers in
                            by carriers in North America. Freight       load factor and maintained a               the Middle East and in Africa faced
                            volumes for African airlines were           gap above the breakeven level              especially challenging operating
                                                                                                                                                                                                                    10. World oil and jet fuel prices                                                                     11. Breakeven and achieved load factors
                            broadly stable in 2018, but this should     With oil prices, interest rates, and       environments.                                                                                                                                                      100
                                                                                                                                                                                                     100                                                                                                                      70                                                                    70
                            be viewed in the context of their robust    such other key costs as labor rising         Chart 13
                            24% growth in volume in 2017.               further in 2018, the estimate for the                                                                                                                                                                         90                                      68                                                                    68
                                                                                                                                                                                                        90
                              Chart 8                                   industry-wide breakeven load factor        On a per passenger basis, the airline

                                                                                                                                                                      $/barrel (monthly average data)
                                                                        increased to 65.9%. Aided, however,        industry is a high-volume, low-margin                                                80                                                                            80                                      66                                                                    66
                            Passenger load factor                       by the record PLF cited previously,        industry. Considering net profits on
                            achieved a record as demand                 the combined achieved load factor          a per passenger basis highlights                                                     70                                                                            70                                      64                                                                    64

                            growth exceeded capacity                    also rose, enabling airlines to maintain   this and presents an alternative
                                                                                                                                                                                                                                                                                      60                                      62                                                                    62
                            Available seat kilometers (ASK)             a solid gap above the level required       perspective on regional airline                                                      60
                                                                                                                                                                                                                                  Brent crude oil
                            increased 6.9% globally in 2018             for financial breakeven. The gap           profitability. By this measure, the                                                                            Jet fuel
                                                                                                                                                                                                        50                                                                            50                                      60                    Achieved load factor (% of ATK)                 60
                            compared with 2017, slightly lower          between the breakeven and achieved         industry generated a modest $6.85                                                                                                                                                                                                Breakeven load factor (% of ATK)
                            than the 7.4% RPK increase in               load factors is driving profitability      per passenger in 2018. Regionally,                                                                                                                                 40                                      58                                                                    58
                                                                                                                                                                                                        40
                            passenger demand. As a result, the          and returns and was again a critical       the North American carriers were

                                                                                                                                                                                                         De 8
                                                                                                                                                                                                                18
                            passenger load factor (PLF) ticked up       contributor to the industry’s financial    the best performers, earning $14.66

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 14                         slightly to a record 81.9%. The PLF         performance in 2018.                       per passenger. At the other end of                                                                                                                                                                                                                                                            15
                            has risen more than 10 percentage             Chart 11                                 the spectrum were airlines in Africa
                            points over the past 15 years. And                                                     and Latin America. In aggregate, they
                                                                                                                                                                                                                  12. Industry return on investment
                            this increase is behind the improved        Another solid financial                    averaged a loss of $1.09 and $1.65,
                                                                                                                                                                                                                        and the cost of capital                                                                                     13. Regional profit performance
                            industry financial performance of           performance generated an                   respectively, for every passenger
                            recent years. Available freight tonne       above cost of capital return for           they carried.                                                                        12                                                                            12                                10
                            kilometers (AFTK), meanwhile, grew          the fourth consecutive year                  Chart 14                                                                           11
                                                                                                                                                                                                                         Cost of capital (WACC) % of invested capital
                                                                                                                                                                                                                         Return on capital (ROIC) % of invested capital               11
                                                                                                                                                                                                                                                                                                                                             9.1

                            4.5% year on year, easily outpacing         The global airline industry                                                                                                     10                                                                            10                                      8
                            the 3.4% growth in FTK. The freight         experienced another year of robust                                                                                               9                                                                            9
                                                                                                                                                                                                                                                                                                                                                       6.2

                                                                                                                                                                                                                                                                                            Operating margin (% of revenue)
                                                                                                                                                                                                                                                                                                                                   5.8
                            load factor, therefore, fell about 1        financial outcomes in 2018. IATA                                                                                                 8                                                                            8                                       6
                            percentage point in 2018, partly            estimates that airlines generated a                                                                                              7                                                                            7                                                                        4.5

                            unwinding 2017’s gain.                      net posttax profit of $30 billion on                                                                                             6                                                                            6                                       4
                                                                                                                                                                                                         5                                                                            5                                                                                           2.7
                              Chart 9                                   an operating (EBIT) margin of 5.8%.
                                                                                                                                                                                                         4                                                                            4                                       2                                                               1.5
                                                                        These outcomes are modestly lower
                                                                                                                                                                                                         3                                                                            3
                                                                        than for 2017 and, as such, reflect
                                                                                                                                                                                                         2                                                                            2                                       0
                            Oil prices had a bumpy ride                 2018’s more challenging business                                                                                                 1                                                                            1
                            The jet fuel price opened the year          environment and particularly its rising                                                                                          0                                                                            0                                       -2
                                                                                                                                                                                                                                                                                                                                                                        -2.0
                            under review about $80 a barrel and         cost pressures.

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                            the year’s first quarter, though, the       Despite a moderation in industry-

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                            fuel price began to track upward,           wide returns, to 8.0%, the air

                                                                                                                                                                                                                                                                                                                                   No
                            increasing more than 20%, to peak           transport’s return on capital                                                                                                          14. Airline profitability per passenger
                            at $96 per barrel in October 2018. In       exceeded its average cost of capital,                                                                                           16                 14.66
                            November and December, however,             which increased to 7.3%, for the                                                                                                14
                            market sentiment turned sharply down        fourth consecutive year. Creating
                                                                                                                                                             Net post-tax profit per passenger ($)

                                                                                                                                                                                                        12
                            amid signs of a deteriorating global        value for investors on a more
                            economy and strong supply from US           sustainable basis than the industry                                                                                             10
                                                                                                                                                                                                                                      8.20
                            tight oil producers. The price quickly      has managed to do historically will                                                                                              8       6.85
  IATA Annual Review 2019

                                                                                                                                                                                                                                                                                                                                                                                                               IATA Annual Review 2019
                            tumbled, falling more than 25% to           be an increasingly crucial element in                                                                                            6
                                                                                                                                                                                                                                                4.74
                            end the year averaging about $72 in         attracting the capital necessary to                                                                                              4
                                                                                                                                                                                                                                                         2.77
                                                                        fund fleet renewal and replacement in
                                                                                                                                                                                                         2
                                                                        the years ahead.
                                                                          Chart 12                                                                                                                       0

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                                                                                                                                                                                                                                                                             -1.65
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Annual Review 2019 - IATA
Safety
Safety

                           02                       Safety
                           Continuously
                           working to
                           improve safety
                           O
16                                                                                                                                   17
                                     ver the past decade, the        Developments in 2018
                                     industry has witnessed          In 2018, there were 11 fatal accidents
                                     a 54% improvement in            that resulted in 523 fatalities among
                                     its all-accident rate and       passengers and crew. This contrasts
                           a 78% improvement in its jet hull         with an average of 8.8 fatal accidents
                           loss accident rate. The trend for         and approximately 234 fatalities per
                           the “business of freedom” is clearly      year in the previous five-year period,
                           toward fewer and less-lethal airline      from 2013 to 2017, and with 2017’s
                           accidents. Fluctuations, though, do       record-low 6 fatal accidents and
                           occur from year to year.                  19 passenger and crew fatalities.
                                                                     Notwithstanding 2018’s higher
                           This was the case for 2018, when 4.4      numbers, the year’s performance still
                           billion passengers flew safely on 46.1    means that on average a passenger        The aviation
                           million flights. The jet and turboprop
                           hull loss rates, the all-accident rate,
                                                                     could take a flight every day for
                                                                     16,581 years before experiencing
                                                                                                              industry is
                           and the fatality risk all improved        a fatal accident in which all on         determined to
                           compared with their performances          board perish.
                           over the preceding five years. The                                                 improve on its
                           industry, however, did not match its
                           extraordinary performance of 2017,
                                                                     The all-accident rate (measured in
                                                                     accidents per 1 million flights) in
                                                                                                              safety record each
                           its safest-ever year, during which        2018 was 1.35, the equivalent of 1       successive year.
                           there were 6 fatal accidents and 19       accident for every 740,000 flights.
                           fatalities, none of which occurred in     This was an improvement over
                           passenger jet operations.                 the all-accident rate of 1.79, or 1
                                                                     accident for every 559,000 flights, in
                           Every accident, of course, is a           the 2013–2017 period, but a decline
                           tragedy. And that makes the aviation      compared with 2017’s record-low
 IATA Annual Review 2019

                           industry all the more determined to       all-accident rate of 1.11.
                           improve on its safety record each
                           successive year.
Annual Review 2019 - IATA
Safety
Safety

                           The same pattern held for major
                           accidents. The 2018 rate for major
                                                                     safety aside, everyone in air transport
                                                                     is shocked and challenged by the
                                                                                                                 The regional story
                                                                                                                 With the exception of Latin
                                                                                                                                                             Industry and IATA activities in
                                                                                                                                                             2018 and early 2019
                                                                                                                                                                                                          LOC-I, CFIT           Lithium batteries in portable
                                                                                                                                                                                                                                electronic devices
                           jet accidents (measured in jet hull       crashes of Boeing 737 MAX aircraft          America and the Caribbean and the           IATA’s safety work is guided by a six-      Runway Safety          To better understand the level of
                           losses per 1 million flights) was 0.19,
                           the equivalent of 1 major accident
                                                                     operated by Lion Air (29 October
                                                                     2018) and Ethiopian Airlines (10 March
                                                                                                                 Commonwealth of Independent
                                                                                                                 States (CIS), every region globally
                                                                                                                                                             point safety strategy. Safety audits
                                                                                                                                                             remain a cornerstone of measuring
                                                                                                                                                                                                           and Midair           passenger awareness regarding the
                                                                                                                                                                                                                                safety risks of the lithium batteries
                           for every 5.4 million flights. This was   2019). These two tragedies, occurring       reported improvement in its 2018            performance and expanding best                Collisions           used in portable electronic devices
                           an improvement over the rate for          only four months apart under                all-accident rate compared with the         practice to more airlines.                                         (PEDs), IATA surveyed passengers
                           the previous five years, from 2013        what appear to be broadly similar           rates for the preceding five years.                                                                            in three major markets in 2018.
                           to 2017, of 1 accident for every 3.4      circumstances, led to the global            North Asia and Africa continued their       Unmanned aircraft systems                                          Passengers were queried on their

                                                                                                                                                                                                         80%
                           million flights but not as good as the    grounding of this model of aircraft.        excellent recent records of zero jet        In 2018, there was an increase in the                              understanding of and compliance
                           rate of 0.12 in 2017.                                                                 hull losses. Europe and the Middle          number of reported occurrences                                     with airline requirements for the safe
                                                                     IATA respects the decision of               East and North Africa (MENA) also           of small drone aircraft—so-called                                  handling of lithium battery powered
                           Another way to look at aviation’s         regulatory authorities globally to          had zero hull losses in 2018.               unmanned aircraft systems, or UAS—                                 devices on aircraft.
                           2018 safety performance is to ask,        ground the 737 MAX. And though                                                          operating irresponsibly near airports
                           what would have happened if the           IATA has no role in the process, it         Turboprop operations still present          and aircraft. The most significant                                 The majority of travelers felt that
                           industry had performed at 2013            looks to the aircraft manufacturer          a challenge. But it is important to         events took place at London’s                                      they were well-informed about the
                           levels? The answer is that it would       to cooperate with the US Federal            note that turboprop operations in all       Gatwick and Heathrow Airports                                      regulations. However, approximately
                           have experienced 109 accidents
                           in 2018, rather than 62, with 38 hull
                                                                     Aviation Administration (FAA) and
                                                                     other safety regulators in developing
                                                                                                                 regions except MENA saw improved
                                                                                                                 performances compared with the
                                                                                                                                                             before the Christmas holidays in
                                                                                                                                                             2018. The UAS sighting at Gatwick
                                                                                                                                                                                                                      10%       one-third of travelers surveyed,
                                                                                                                                                                                                                                particularly business travelers, were
                           losses, instead of the 12 that did        a safe and robust solution that             previous five years—and the spike in        Airport resulted in the cancellation of                            still packing spare batteries and power
                           occur, simply based on the greater        addresses all identified concerns.          the MENA rate was the result of only        1,000 flights.                                In 2018, loss of     banks in checked luggage despite the
                           number of flights operated in 2018.
                           The industry’s solid progress in
                                                                     At the same time, there is no
                                                                     substitute for thorough and timely
                                                                                                                 one accident. Turboprops, however,
                                                                                                                 flew just 18% of the sectors in 2018        IATA supports the investigation of
                                                                                                                                                                                                           control–inflight     safety prohibitions. In response, IATA
                                                                                                                                                                                                                                launched a campaign to help airlines
                                                                     investigations of both accidents.           and yet accounted for 45%, or 5 of 11,      such incidents and the development               (LOC-I) and       communicate to passengers the right
                                                                     Safety is a top priority in aviation,       of the fatal accidents globally.            of measures to safeguard against              controlled flight    and wrong way to pack PEDs before
                                                                     and what is learned from every                                                          unlawful interference by UAS,                                      they arrive at the airport.
                                                                     accident investigation is vital to the      Detailed information on the industry’s      such as the infringement of                  into terrain (CFIT)
18                                                                   efforts to further safety.                  safety performance can be found in          restricted or sensitive airspace           accidents accounted     IATA Operational Safety Audit                  19
                                                                                                                 the IATA 2018 Safety Report.                in the area surrounding airports.                                  The IATA Operational Safety Audit
                                                                                                                                                             Any measures should support                    for more than       (IOSA) is a global standard for aviation
                                                                                                                                                             continuous monitoring and should            80% of fatalities,     safety. IOSA is mandatory for IATA
                                                                                                                                                             only be implemented following a risk                               membership, but fully 34% of the
                                                                                                                                                             assessment.                                  even though they      airlines on the IOSA registry are non-
                           Jet hull loss rates by region of operator (per million departures)                                                                                                                represented        IATA members who appreciate the
                                                                                                                                                             In 2018, IATA issued a technical                                   value of IOSA.
                                                                                                                                                                                                          less than 10% of
                                                                                                                                                        )
                                                                                                                                                      IS     bulletin highlighting key
                                                                                                                                                        (C
                             2018
                                                                                                                                                                                                            the accidents.
                                                                                                                                                 ta f
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                                                                                                                                                             considerations for implementing                                    At the end of 2018, moreover, 14
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                             2013–2017
                                                                                                                                           nd we

                                                                                                                                                             technology. IATA is involved,                                      authorities worldwide recognized
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                                                                                                                                                             meanwhile, in discussions within                                   IOSA as the complement to the
                                                                                                                                    In om

                                                                                                                                                             ICAO panels on runway incursions                                   national safety oversight programs
                                                                                                                                       C

                                                                                                                           1.19                              by, and the irresponsible use of, UAS
                                                                                                                                                             near airports.
                                                                                                                                                                                                                                of 63 countries. European Union (EU)
                                                                                                                                                                                                                                regulations, for instance, accept IOSA
                                                                                                                           1.00                                                                                                 as a means of safety compliance
                                                                                                                                                             In 2019, IATA is intensifying its focus                            in the Third Country Operator
                                                                                     0.00                                                 0.00               on raising safety awareness among                                  authorization process.
                                                                                                                  a nd

                                            0.10                                     0.14                                                 0.00
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                                                                                                                                                             UAS users, specifically regarding the
                                                                                                             Af as

                                                                                                                                                                                                           There were 15
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                                                                                                                                                             to airports and aircraft. IATA will also
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                                                                                               0.00                                                          expand its work on UAS integration
                                                                                                                                                                                                            two of which
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                                                                                               0.72
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                                                                                                                                                             UAS industry innovators.                     were fatal, with
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                                                                                                                                    0.32
                                                                                               0.00
                                                                                                                                    0.37
                                      0.19                   0.76                              1.06
 IATA Annual Review 2019

                                                                                                                                                                                                                                                                             IATA Annual Review 2019
                                      0.29                   0.51
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4,776
Safety

                                                                                                                                                                                                                                                                                           Safety
                           ISAGO audits vs findings                       (As of December 2018)                                                          Ultimately, IATA’s Turbulence Aware         All GADM data contributors have            International Airline
                             Audits     Findings
                                                                                                                                                         platform will provide an open solution      access to aggregated and de-               Training Fund
                                                                                                                                                         that enables any operator to share          identified reports and analyses,           In 2018, the International Airline
                                                                                                                                                         its data through a global turbulence        including                                  Training Fund (IATF) contributed
                                                                                                                                                         data repository. Every participating                                                   to developing the skills and
                                                                                                                                                         carrier will have access to every              industry accident and incident data     strengthening the capabilities of
                                                                                                                                                         other carrier’s real-time turbulence        and analysis and operational reports       3,435 aviation industry professionals
                                                                                                                                                         data, and greater preflight and             (pilot and flight attendant reports) in    from developing nations. Of the 160
                                                                                                                                                         in-flight situational awareness will        the Safety Trends Evaluation Analysis      training events delivered by the IATF
                                                                                                                                                         be achieved. Additional benefits            & Data Exchange System (STEADES);          during the year, 110 emphasized
                                                                                                                                                         will include a decline in turbulence-          aircraft ground damage reports          aviation safety, particularly in Africa.

                                                                                         983
                                                                   911
                                        903

                                                                                                                                                         related injuries and improved               and analyses in the Ground Damage

                                                                                                                 774
                                                                                                                                                         operational efficiencies, including         Database (GDDB);                           In addition, under the auspices of
                                                      253

                                                                              252
                            215

                                                                                                                                  245
                                                                                                                                                         reduced fuel burn, through more                de-identified flight information        the IATF, five new airlines benefited

                                                                                                         221
                                                                                                                                                         accurate flight planning.                   from over four million flights in the      from the IOSA Implementation
                                                                                                                                                                                                     Flight Data eXchange (FDX) and,            Training Initiative (IOSA-ITI). IOSA-
                                                                                                                                                         Global Aviation Data                           with the imminent introduction          ITI beneficiary Congo Airways,
                                                                                                                                                         Management                                  of the Incident Data Exchange              moreover, was admitted to the IOSA
                                      2014                   2015                     2016                    2017                       2018            Because the number of accidents             (IDX), enhanced data analytics and         registry and became an IATA member.
                                                                                                                                                         is in decline, techniques to improve        benchmarking capabilities with             New programs launched by the IATF
                                                                                                                                                         aviation safety are increasingly            aggregated, de-identified global           in 2018 support
                           IOSA is not a guarantee against an        IATA Safety Audit for                    Auditors record their findings in          shifting to data-driven analyses of         safety information.
                           accident. Its efficacy is, however,       Ground Operations                        a new style that results in a more         trends and of the interaction between                                                    IOSA renewals by African carriers,
                           evident when comparing aggregate          The first audits in accordance with      informative audit report than in the       the links in the air transport chain. The   In addition, IATA has been working           carriers preparing for the IATA
                           safety performance levels. In 2018,       the new IATA Safety Audit for Ground     past. And those reports are then           goal is to expose potential risks and       with more than 100 aviation safety         Standard Safety Assessment,
                           the all-accident rate for airlines on     Operations (ISAGO) model occurred        made available to airlines, which          determine risk mitigation strategies.       professionals on the IATA Safety             network development in Africa, and
                           the IOSA registry was more than           in 2018. The new model introduced a      use the information to complement                                                      Incident Taxonomy (ISIT). ISIT will          developing the leadership potential
20                         two times lower than that of non-         number of significant changes:           their oversight obligations and risk       This is the focus of IATA’s Global          support the IDX and provide the            of women in African aviation.                  21
                           IOSA airlines, at 0.98 versus 2.16,                                                management of outsourced ground            Aviation Data Management (GADM)             ability to better identify global safety
                           and more than two and a half times           Moving to a corps of independent,     operations.                                program. GADM is one of the                 risks to a more granular degree than
                           better over the five years from 2014      professionally trained and certified                                                world’s most diverse aviation safety        previously possible.
                           to 2018.                                  auditors and away from a pool of         Turbulence                                 information exchange programs.
                                                                     voluntary auditors                       Turbulence is a well-known safety          It captures data from more than
                           The IOSA program is undergoing a             Restructuring the cost model to       hazard; passenger and cabin crew           470 industry participants, through
                           digital transformation that will enable   ensure a more even distribution of       injuries related to in-flight turbulence   accident and incident reports, ground
                           IOSA-registered airlines to monitor       program expenses between ground          are climbing. So, in 2018, IATA            damage occurrences, and flight
                           each other’s safety performance and       service providers (GSP) and airlines     addressed this safety hazard with          data. The result is a comprehensive,
                           to benchmark their performance on            Applying a new auditing               the introduction of Turbulence             cross-database analysis in support
                           a collaboration platform. In the long     methodology focused on standards         Aware, a global platform for sharing       of a proactive, data-driven approach
                           run, the digital transformation will      implementation and the alignment         automatically generated turbulence         to advanced trend analysis and
                           also help to focus auditing on areas      of the ground operations processes       reports in real time. A number of          predictive risk mitigation.
                           with the highest safety risks.            between a GSP’s headquarters and         airlines are conducting trials of
                                                                     its network of ground operations         Turbulence Aware in 2019, and
                                                                                                              IATA plans to launch the platform
                                                                     Some 245 audits of GSP were              globally in 2020.
                                                                     conducted by independent auditors
                                                                     trained and qualified by IATA as         IATA Turbulence Aware consolidates,
                                                                     members of the IATA Charter of           standardizes, and accesses in real
                                                                     Professional Auditors. Stakeholder       time objective turbulence data                                                                                             IATA’s Turbulence Aware
                                                                     feedback confirmed that the new          collected from multiple airlines
                                                                                                                                                                                                                                         platform will provide
                                                                     approach produced a higher-quality       worldwide. The platform’s purpose
                                                                     and more-thorough assessment of          is to grant airline pilots and airline                                                                                     an open solution to the industry
                                                                     a GSP’s management, oversight,           operational center personnel a                                                                                             that enables any operator to
                                                                     and provision of ground services.        detailed, real-time awareness of
                                                                     The independent auditors raised an       turbulence. This IATA initiative is                                                                                        share its data through a global
                                                                                                                                                                                                                                         turbulence data repository.
 IATA Annual Review 2019

                                                                                                                                                                                                                                                                                             IATA Annual Review 2019
                                                                     average of about 20 findings per audit   leading the air transport industry’s
                                                                     (see chart above).                       shift to data-driven turbulence
                                                                                                              mitigation.
Security

                                                                                                                                                                                                                           Security
                                           S
                                                     ecurity is a government             Global Aviation and Security Plan           The 40th ICAO Assembly in                  Progress in security is welcome.
                                                     responsibility. But it is the       Global aviation security efforts took an    2019 provides an opportunity               Happily, 2018 saw the increased
                                                     partnering of government            enormous step forward in November           to emphasize the importance                implementation of One-Stop Security.
                                                     and the industry that ensures       2017 when a majority of national            of bringing governments and                An agreement between Singapore
                                           that air transport is not only the            governments agreed to GASeP under           the industry together on the               and the European Union, for instance,
                                           safest and most secure but also an            the auspices of ICAO. GASeP identifies      sharing of information regarding           helps passengers avoid a redundant
                                           accessible and convenient form of             five priorities:                            threats, vulnerabilities, and risks.       check when they transfer flights at
                                           long-distance travel.                                                                     In parallel, IATA is working with          European airports that have elected
                                                                                             Enhance risk awareness and              ICAO and countries in a further            to take advantage of the One-Stop
                                           Even greater collaboration is needed,         response                                    attempt at developing an online            Security program.
                                           however, if the “business of freedom” is          Develop security culture and human      security application that facilitates
                                           to thrive. This will enable risk-mitigation   capability                                  the exchange of critical security          Technology makes the case for One-
                                           measures that maximize the protection             Improve technological resources and     occurrence data. This sophisticated,       Stop Security especially compelling.
                                           of passengers and crew while                  foster innovation                           highly secure tool will provide            IATA is working with the World Travel
                                           minimizing disruption to passengers               Improve oversight and quality           the early detection of changes to          and Tourism Council on decentralized
                                           and economies.                                assurance                                   security environments in different         digital identity platforms using
                                                                                           	Increase cooperation and support        parts of the world. That, in turn, will    biometric and blockchain
                                           Aviation security policy cannot rely                                                      enable the industry to deal with           technologies. These technologies will
                                           on a one-size-fits-all approach. The          Owing to GASeP, nations have—for the        emerging threats and the impact of         make identity verification possible at
                                           industry must learn from evolving             first time—a framework for aligning         changes on security procedures.            all touch points along a passenger’s
                                           threats and anticipate the impact of          national aviation security efforts to                                                  journey. The partners believe that this
                                           the fast-growing levels of passenger          address and mitigate threats. In a          The plan is to make this online            will make security more efficient and
                                           and cargo traffic. IATA supports global       short period, GASeP has been the            security application available to all      travel more convenient (see One ID
                                           standards, but an outcome-based               catalyst for a wave of improvements in      IATA members and registered IATA           page 46).
                                           approach is essential, as every location      aviation security.                          Operational Safety Audit (IOSA)
                                           has a unique mix of challenges.                                                           carriers by late 2019. So doing            Cybersecurity
                                                                                         Many nations, however, have not fully       will enhance their collaborative           The aviation industry demands
22                                         Developments in 2018                          implemented the ICAO Annex 17               relationships with governments on          the highest safety standards and                23
                                           In 2018, aviation security continued          baseline requirements that underlie         threat and vulnerability information,      precautions for aircraft systems.
                                           to stay ahead of evolving threats. As         GASeP. IATA will support a resolution       and that will help all aviation            Modern aircraft are interconnected.
                                           UN Security Council Resolution 2309           at the 40th ICAO Assembly in 2019           stakeholders—public and private—           Discrepancies; errors; or, worse,
                                           makes clear, governments have the             that underscores the responsibility         prevent, detect, and respond to            nefarious threats, such as a computer
                                           primary responsibility for aviation           of countries to meet global                 threats in a timely and effective          virus or malware, can travel from
                                           security. But a secure industry can           standards in their national                 manner.                                    system to system by way of basic
                                           best be achieved when governments             aviation security programs.                                                            electronic communication. As

                           03
                                           and the industry work together as                                                         Sustainable risk-based                     the computerization and digital
                                           equal partners. Governments have              There is, moreover, an urgent need for      solutions                                  footprint of aircraft increase, there
                                           access to information that drives             developed countries to provide more         The investment in aviation security        is an even-greater need to protect
                                           security measures. Airlines and               comprehensive assistance to their           since 9/11 has without doubt made          communication, data, and other

                                Security   airports have the operational know-
                                           how to ensure that these measures
                                           can be implemented to achieve the
                                                                                         developing counterparts to ensure
                                                                                         that the baseline security measures
                                                                                         are applied. Provided the principles
                                                                                                                                     aviation more secure. Efficiency,
                                                                                                                                     though, has suffered. In IATA’s Global
                                                                                                                                     Passenger Survey, passengers
                                                                                                                                                                                critical information against intentional
                                                                                                                                                                                manipulations.

                           Establishing
                                           twin goals of increased security and          of GASeP continue to resonate with          consistently point to airport security     IATA is working alongside airlines,
                                           minimal disruption.                           stakeholders, the industry will move        and border control as the worst part       industry stakeholders, and other
                                                                                         ahead of the threat trajectory.             of traveling. Their biggest frustrations   sectors to do just that. On behalf of
                                           This was the lesson that was relearned                                                    are having to remove personal items,       these partners, IATA will deliver a

                           a risk-based,
                                           in 2017 when, with little advance             Information sharing                         such as laptops and PEDs, from cabin       strategy in early 2020 that will provide
                                           notice or input from industry, the            Information sharing among                   bags and the lack of consistency in        guidelines for a comprehensive
                                           United States and the United Kingdom          governments and particularly between        screening procedures at airports.          approach to cybersecurity for
                                           banned the carriage of large portable         governments and the air transport                                                      the air transport industry.

                           outcome-
                                           electronic devices (PEDs) in aircraft         industry remains a challenge.
                                           cabins on some flights originating            There has been some improvement
                                           in the Middle East. Passengers were           since the shooting down of MH 17

                           focused
                                           confused, and airlines struggled to           exposed gaps in the sharing of threat
                                           comply. A subsequent threat from              information. But many airlines still
 IATA Annual Review 2019

                                                                                                                                                                                                                              IATA Annual Review 2019
                                           weaponized powders witnessed a far            are forced to rely on commercially
                                           smoother introduction of measures.            sourced intelligence. The information-
                                                                                                                                                               The investment

                           approach
                                           Dialogue and collaboration among              sharing standard in Annex 17 is a
                                           all stakeholders ensured that these           step in the right direction. Yet it falls                        in aviation security since
                                           measures aligned with the Global              short of the degree of multilateral
                                           Aviation Security Plan (GASeP).               risk information sharing required for                             9/11 has without doubt
                                                                                         genuinely secure air travel.                                    made aviation more secure
Regulation and taxation

                                                                                                                                                                 Regulation and taxation
                              04                         Regulation
                                                         and taxation
                              Encouraging the                                                                          Numerous actions were undertaken
                                                                                                                       in 2018. Industry advocacy

                              right framework
                                                                                                                       dissuaded the government of Mexico
                                                                                                                       from applying domestic aviation
                                                                                                                       consumer laws to international
                                                                                                                       carriers. Malaysia was induced to
                                                                                                                       abandon a proposal to cap ticket
                                                                                                                       fares. And further regulations were

                              A
                                                                                                                       opposed in South Africa; in the Arab
                                         ir transport cannot               Specific regulatory improvements            Civil Aviation Commission (ACAC)
                                         generate global prosperity        were wide ranging. They spanned the         region of the Middle East;, and, as
                                         and thereby fulfill its role as   reduction of administrative burdens         a result of the FAA Reauthorization
                                         the "business of freedom"         through better European Union (EU)          Bill, in the United States. In all such
                              without an efficient and enabling            agency collaboration in EU countries,       cases, IATA partnered with local
                              regulatory system and, specifically,         the adoption of global standards            industry and stakeholders to lobby
                              fair and reasonable taxation.                for electronic communications               for smarter regulation principles to
                              Regulation should be developed and           in Brazil, and the introduction of          be used to inform decision-making. It
                              implemented using smart principles,          globally harmonized ground-handling         is particularly vital that governments,
                              and excessive or poorly targeted             regulations in India.                       regulators, and the flying public
                              taxation should be avoided.                                                              understand the balance between
 24                                                                        IATA’s launch of a regulatory               protecting consumer rights and                        25
                              IATA’s smarter regulations deliver           competitiveness benchmarking                providing sustainable air services.
                              clearly defined, measurable policy           toolkit will help to rank the
                              objectives in the least burdensome           “smartness” of nations’ approaches          Aviation’s growth
                              way. A policy framework based                to regulation across a number               IATA’s 20 Year Passenger Forecast
                              on smarter regulation principles             of policy areas. This will, in turn,        predicts a doubling of passenger
                              positions a country for sustainable          inform industry priorities in 2019          demand over the next two decades.
                              aviation growth.                             and beyond (see "Regulatory                 Harder to predict are the challenges
                                                                           Competitiveness Benchmarking"               of that growth and of the then
                              Developments in 2018                         next page).                                 global political environment. IATA,
                              Throughout 2018, the industry                                                            therefore, produced its Future of
                              engaged in coordinated advocacy              Consumer protection                         the Airline Industry 2035 report to
                              that resulted in adherence to                Airlines have always worked hard to         assist airlines and policy makers
                              smarter regulation principles in             retain customers in an ultracompetitive     with strategy development. The
                              several countries. The Malaysian             marketplace. In an age of social media      report has been used by a number
                              Aviation Commission introduced an            and citizen journalism, any incidents       of carriers and governments (New
                              airports quality service framework           where standards of customer care            Zealand's, for example) in framing
                              that ensures more transparent and            are perceived to fall short can rapidly     policy and strategy.
                              objective policy setting and airline         go viral. Airlines, therefore, are highly
                              involvement in decision-making. And          incentivized to offer good customer         Brexit
                              in Brazil, the government introduced         service and, if problems occur, to try      Throughout 2018, the industry
                              guidelines for regulatory quality.           to put them right.                          warned the UK government and EU
                              ICAO, meanwhile, agreed to work                                                          authorities of the implications for air
                              with IATA on implementing good               Airlines have agreed to core                transport of a “no-deal” exit of the
                              regulatory practices worldwide under         principles for passenger rights.            UK from the European Union. The
                              the auspices of its "No Country Left         When the circumstances of a flight          concern was that failure of the British
                              Behind" initiative.                          delay or cancellation are within an         parliament to accept an interim Brexit
                                                                           airline’s control, airlines agree that      agreement would result in cancelled
    IATA Annual Review 2019

                                                                                                                                                                           IATA Annual Review 2019
                                                                           passengers have the right to care           flights and chaos for the industry and
                                                                           and assistance in the case of delays        passengers.
                                                                           and rerouting and to refunds or other
                                                                           monetary compensation in the case
                                                                           of cancellations.
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