IATA Optimistic about Profits, Critical of 'Over-Regulation'

Business | June 7, 2010, Monday // 12:50|  views

The International Air Transport Association launched "Vision 2050".

The International Air Transport Association (IATA) launched an ambitious “Vision 2050”, a document outlining the association's strategy and outlook for the following four decades.

The upbeat document comes in the wake of the air traffic crisis caused earlier this spring by the eruption of the Icelandic volcano Eyjafjallajökull.

Vision 2050 specifies four “cornerstones of change”: increased profitability, better infrastructure, new fuels and a closer relation with customers.

Airlines are expected to post a profit of USD 2.5 B in 2010 – the industry’s first profit since 2007, announced Giovanni Bisignani, IATA’s Director General. Industry revenues are forecast to reach USD 545 B in 2010, up from the USD 483 B in 2009, but still below the USD 564 B of 2008.

The association, which also revealed data from a revised 2010 forecast, stated that passenger traffic is expected to grow by 7.1% in 2010, while cargo traffic – by 18.5%.

Europe will be the only region in the red with a USD 2.8 B loss, according to IATA's report (a downgrading from the USD 2.2 B loss previously forecast in March, although an improvement on the USD 4.3 billion lost in 2009). This loss is partially attributed to low GDP growth, the volcanic ash crisis, and a series of labor strikes and strike threats.

IATA's Vision 2050 subtly mentioned “over-regulation” as a problem in goverments' attitude to air service and expressed dissatisfaction over the bilateral system regulating international traffic. “The restrictions of the bilateral system are a dam that holds us back. It is time for that dam to burst,” said Bisignani.

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Tags: IATA, air traffic, air crisis, Giovanni Bisignani, profits


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