IATA Annual Review 2019

Annual Review
2019
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

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 ($) figures refer to US dollars (US$).
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

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
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

Chief Executive Officer
COPA AIRLINES
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

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.

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.
Industry story
Industry story
01 Industry story
Empowering industry
profitability despite
challenges
10 11

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
Ch om
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Ja dom
Br om
om
Ru dom
ex om
Sp m
Sp om
m
Tu n-U
do
do
Air travel was more accessible
il d
d
the consistently strong performance orders component of the global Additional pax in 2018 (million)
US
a
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ai
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ss
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st
for more people of its market Purchasing Managers Index. Having
do
M
Au
In
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

trips had halved, to just 21 months.
-5 -5
Chart 3
-10 -10
-15 -15
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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
pe
st
ry
ric
ic
ic
ifi
in Europe and in Latin America. For 2018. Airlines in Europe, Asia-Pacific,
Ea
st
Chart 10
ro
er
er
ac
Af
du
Eu
e
Am
Am
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-P
dl
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In
ia
freight, it was the Latin American and Latin America also yielded
20
id
tin
rth
As
M
La
No
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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20 7
18
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18
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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.
20 0
20 1
20 2
20 3
20 4
20 5
20 6
20 7
20 8
20 9
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20 2
20 3
20 4
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18
was initially stable. At the end of
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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

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
-2 -1.09
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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
industry all the more determined to all-accident rate of 1.11.

improve on its safety record each
successive year.
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
tS ho
considerations for implementing At the end of 2018, moreover, 14

te
en alt
2013–2017
nd we
technology. IATA is involved, authorities worldwide recognized

pe on
de m
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

ric t a
UAS users, specifically regarding the

Af as
There were 15
th E
0.22
or dle
irresponsible use of UAS in proximity

runway excursions,
id
pe
to airports and aircraft. IATA will also

ia
ro
As
N
Eu
0.00 expand its work on UAS integration

two of which
th
a
52
ic
or
er
into airspace in collaboration with

0.72
Am
UAS industry innovators. were fatal, with

th
or
N
0.32
0.00
0.37
0.19 0.76 1.06

0.29 0.51
c
ifi
a
c
ic
Pa
r
Af
a-
fatalities
i
ry
As
be d
st
ib an
du
an
ar a
In
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e er
th Am
tin
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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.

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

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

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

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.
Regulatory Competitiveness Benchmarking

Although the economic benefits of aviation The five
connectivity are well documented, the link to competitiveness
providing governments with policy guidance to benchmarks are Airline and IATA advocacy
maximize those benefits is less well understood. regarding slots and taxation
1 Passenger facilitation
IATA prepared a regulatory competitiveness
benchmarking tool in 2018 that is designed to 2 Cargo facilitation Slots
provide governments with an analysis of the More than 200 airports worldwide
3 Supply chain
principal areas of aviation competitiveness and are slot constrained, meaning
management
with the priorities they should focus on to improve that they have insufficient
capacity to meet demand at all 5
their air transport–related competitiveness. The 4 Infrastructure
hours of the day. This number is 3
first dozen reports, focused on European nations,
5 Smarter regulations set to rise substantially over the
are planned for release in 2019. 1
coming decades because airport
construction is failing to keep pace
with increased demand for aircraft
2
movements. Globally applied rules
Industry advocacy and faster and more efficiently than ever. for the use of what capacity there is
communication and pragmatic MC99 also ensures that airlines at constrained airports will therefore
political and regulatory discussions benefit from streamlined claims become increasingly important.
resulted in the EU and UK agreeing management and heightened 4
to maintain the bulk of the current processing regarding their liability IATA’s Worldwide Slots Guidelines is
air services agreement for a period for passengers, baggage, and cargo. the global standard for the policies,
of up to a year, even in the event of a principles, and procedures of airport
“no-deal” Brexit. In March 2019, the During 2018, countries including slot allocation and management. The
EU granted an extension to the UK’s Ghana, Nepal, Sri Lanka, Uganda, independence of the slot coordinator
Brexit process to enable a political and Vietnam ratified MC99. The total and the harmonized, consistent
consensus to be found. It is unclear number of parties to MC99 is now application of the WSG provides for
when or if Brexit will occur, but the 136, representing just over 97% of the certainty, sustainability, flexibility,
26
industry remains vigilant to ensure
that connectivity is maintained and
passenger traffic. The campaign
to promote MC99 ratification is
and transparency that the industry
requires and that passengers benefit Slots 27
disruption to passengers and cargo effectively complete, though efforts to from, including dependable services
minimized. encourage countries that have not yet and an expanding route network. 1. Africa and the Middle East 3. China 5. Europe
ratified MC99 to do so will continue. IATA worked with the authorities in IATA organized a session in March Europe remains the world’s most
Single African Air Comprehensive strategic review Iran in 2018 to introduce and train 2019 for airlines to discuss with significant region for congestion,
Transport Market Rebalancing the value chain of the WSG continued in 2018 in stakeholders in the principles of its the Civil Aviation Authority of China accounting for just over 50% of
In January 2018, the Single African Original Equipment Manufacturers conjunction with Airports Council Worldwide Slot Guidelines and to (CAAC) the CAAC’s slot allocation all Level 3 coordinated airports.
Air Transport Market (SAATM) was (OEMs) are crucial not only to the International (ACI) and the Worldwide develop regulations based on the WSG. regulation published on 1 April IATA has worked closely with the
launched as an initiative of the African supply but also the maintenance Airport Coordinators Association Progress has stalled, however, because 2018. The intent was to foster European Commission (EC) to see
Union to implement the principles of aviation equipment. But airlines (WWACG). The review also saw the of international sanctions on Iran. understanding of the new allocation EU Slot Regulation 95/93 applied by
of the Yamoussoukro Decision and believe that this market has been start of a trial of an earlier slot return policy and of capacity management all member states and to determine
create a single unified air transport tipped for much too long in the deadline to assess its feasibility and 2. India developments ahead of the opening interest in reviewing the EU Slot
market in Africa. The SAATM’s OEMs’ favor. In July 2018, following its benefits for slot planning. Further Inconsistencies in airport slot of Beijing’s new airport, Daxing Regulation.
development continued throughout 18 months of negotiations, IATA enhancements to the WSG will be coordination at airports in India where International, in October 2019.
2018, with industry support at the announced an agreement with made in 2019 and will include sections concession agreements have been The EC proposed in September 2018
technical and political levels. As a CFM, the engine manufacturing on slot performance monitoring and awarded have led IATA to work with 4. The Americas to end seasonal changes to European
result, the African Union incorporated partnership of GE Aviation and on airport capacity declaration (see the Indian Ministry of Civil Aviation Brazil followed its engagement with IATA daylight savings time from 2019
and circulated, for example, the Safran Aircraft Engines, that will map on opposite page). to encourage the harmonization of with the decision to align with the WSG onwards while leaving member states
entirety of IATA’s smarter regulation ensure beneficial competition in the airport slot coordination. IATA is also and eliminate the harmful links between free to decide whether to permanently
principles for use by regional aftermarket for the maintenance, Taxation working with the authorities in India punctuality and historic slots in Brazilian apply summer time or winter time
economic organizations in devising repair and overhaul of CFM’s and GE’s Excessive taxes on aviation affect to establish a single, centralized, Slot Regulation Resolution 338. beginning in summer 2019. This
the regulatory texts that underpin engines. The agreement includes the ability of air transport to meet independent slot coordinator tasked proposal would have significant
the SAATM. important new Conduct Policies that demand and impede economic with slot coordination for all Level 2 Colombia worked in 2018 toward negative impact on flight schedules
will assure airlines of greater freedom growth. Aviation taxes, moreover, and Level 3 airports. the full implementation of its slot and planning. IATA as a result
Montreal Convention 1999 to use non-CFM parts and to have should not be used to subsidize regulation. That regulation is fully requested the European Council and
Montreal Convention 1999 (MC99) maintenance work performed by other modes of transportation or aligned with the WSG and was issued Parliament and other stakeholders
is an example of smarter regulation. third-party shops. The agreement to make up budget deficits. IATA in 2017 to manage congestion issues to either reject the proposal or to
MC99 sets out rules on airline demonstrates what can be achieved and its members are running active at the country’s airports. extend the period for implementation

liability during international carriage through pursuing legal options and campaigns to this effect in numerous to permit the industry to adapt and to
that deliver significant benefits for all collaboration to achieve a win-win countries (see map on next page). Mexico recognizes the need to coordinate its approach.
stakeholders. It ensures protection outcome. IATA is encouraging other align with global standards. But
for passengers and is a prerequisite participants in the aftermarket for the industry continues to await the
to cargo transformation initiatives, aviation equipment and services country’s full implementation of the
such as electronic air waybill (e-AWB) to adopt policies similar to those WSG to benefit the management of
and e-freight, that deliver shipments embraced by CFM. congestion at its airports.
Solutions from

IATA Consulting
Unruly passengers
The unruly behavior of a minority of passengers IATA Consulting has comprehensive experience of the full
cannot be allowed to compromise flight safety array of aviation-sector business challenges. It draws on
9
or disturb the journeys of the majority of IATA’s more than 70 years of service to the airline industry
customers. The industry takes a zero-tolerance and thus is unrivaled in offering its clients the best solutions.
6 approach to disruptive incidents. IATA Consulting’s depth and breadth of aviation industry
knowledge enables it to help its clients maximize the value of
In 2017—the latest year of available their operating models, realize their growth ambitions, and gain
8 4 statistics—there were 8,731 unruly passenger insights that translate into sustainable competitive advantages.
3 incidents voluntarily reported to IATA. This
2 10 amounts to 1 incident per 1,053 flights. IATA Consulting’s projects in 2018:
145+
7 The industry strategy for dealing with
5 unruly passengers involves improving the
prevention and management of incidents.
15+ CAAs and
1 This includes enhancing the legal deterrent. governments
Montreal Protocol 2014 (MP14) provides Civil aviation restructuring
legal deterrent powers, but 22 nations must Tourism and benefits of
ratify MP14 before it can come into force. In
2018, countries including Ghana, Kazakhstan,
projects aviation studies
Capacity enhancement
90
Kuwait, Malaysia, Senegal, and Singapore
Taxation ratified the protocol. Turkey’s ratification in

March 2019, brings the total number of parties
30+ airlines
to MP14 to 19. Strategic planning
1. Bali 4. Japan 7. Philippines Safety enhancement
The Governor of Bali is Despite industry efforts to explain IATA held constructive discussions Irresponsible alcohol consumption remains Route analysis
28
considering the imposition
of a $10 levy per foreign tourist to
the negative consequences to the
Japanese government, a tourism
with the Philippines’ Tourism
Infrastructure and Enterprise Zone
one of the top three causes of unruly behavior.
In the UK, IATA partnered with Airports
countries NDC consulting services
29
40+
fund environmental and cultural
conservation. No official proposal has
tax of ¥1,000 ($9) per passenger
departing on international flights was
Authority to discuss a proposed
travel tax for non-Filipino travelers.
Council International (ACI) and the Travel Retail
Foundation on a campaign to discourage
50+ aviation
been issued, but the idea was widely introduced in January 2019. alcohol consumption at the airport and stakeholders
covered in the media. In an effort to 8. Spain onboard. The industry also defended its right (financial institutions
preempt the levy, IATA submitted a 5. Malaysia IATA was instrumental in obtaining to serve alcohol responsibly in the face of and ANSPs)
protest letter in January 2019. In November 2018, the government an important clarification from Spain calls for regulations to restrict this ability. A Pharmaceutical handling
2. Bangladesh
of Malaysia announced its intention to
introduce an air passenger departure
confirming that domestic segments
of international air transport were to
robust response, for example, was submitted
to the UK Home Office Consultation on Airside
airports Business planning
Without warning, the Bangladeshi levy on international passengers be exempt from VAT. This ruling is in Licensing at Airports in England and Wales.
government removed air transport effective 1 June 2019 of RM20 or effect as of July 2018. Traffic studies
from the list of value-added tax (VAT) RM40 depending on passenger Human trafficking Ground handling
exemptions in its 2018 budget and destination. IATA registered its concerns 9. Sweden The trade in people is an illegal industry worth Passenger terminal optimization
levied a 15% VAT on international with the Ministries of Finance, Transport On 12 December 2018, a coalition $32 billion a year that the United Nations Security enhancement
transport on a prospective basis and and Tourism, and Arts & Culture. The of Swedish Moderates and Christian Office of Drugs and Crime estimates involves
retroactive to 2009. IATA and the tax contravenes ICAO principles and Democrats adopted a budget the trafficking of almost 25 million human
local Board of Airline Representatives negatively affects passenger demand proposal abolishing Sweden’s beings annually. A significant number of
are challenging the government to and, consequently, Malaysia’s economy. aviation tax effective 1 July 2019. traffickers are suspected of taking advantage
reverse this decision. On 18 January 2019, however, of the global air transport network.
6. Netherlands the country’s newly appointed
3. Bermuda Airlines and IATA responded to government coalition stated that it The aviation industry is determined to play
A pre-budget report from the a public consultation on a green would maintain the ticket tax after all. its part in preventing this and to help law
Bermuda government suggested aviation tax in the Netherlands. IATA’s enforcement identify traffickers and their
imposing a goods and services protest letter to the Dutch Ministry 10. Thailand victims. At the 2018 IATA AGM, a resolution
tax (GST) of 5% on all air tickets. In of Finance notwithstanding, in The Thai government is considering was unanimously passed committing airlines
late January 2019, IATA argued in February the Netherlands presented a mandatory travel insurance levy to sharing best practice and to training staff
writing that the GST would contradict a paper on aviation taxation to the EU on foreign visitors. IATA is arguing, to spot instances of human trafficking. The
international taxation standards if Finance Council. The paper invited EU however, that this contravenes ICAO resolution also called for improved reporting

imposed on air services to and from members to consider a coordinated principles and that such a levy should protocols to be put in place by governments.
Bermuda and would negatively affect approach to aviation taxation within be collected by tour operators where Tutorials and guidance materials were
the local economy. The government’s the EU and was supported by Belgium tourists engage in high-risk activities. published, and awareness raising through the
2019–2020 budget statement of 22 and Sweden. In the event the EU-wide media and social media continued throughout
February made no mention of the tax does not happen, the Netherlands 2018, the focus, together with ACI, being on
GST on air tickets. has announced that it will introduce a International Human Trafficking day on 30 July.
ticket tax in 2021.
Infrastructure
Infrastructure
05
In Canada, concerns raised by airlines In 2018, two contrasting political
and consumer groups compelled decisions stood out in this respect.
the government not to pursue the The UK parliament voted for a national
Infrastructure
privatization of airports. airports strategy that paves the way
In France, the objectives and benefits for the long-overdue expansion of
of the proposed further privatization of Heathrow Airport, although significant
Protecting the
Group ADP for Paris airports is being opposition remains and cost concerns
questioned. have not been resolved. But in Mexico,
In India, the government continues disappointingly, the newly installed
to be challenged on selecting bids for government decided to cancel the
future of air
privatization based on the best deal for building of a new hub airport in Mexico
the government and without balanced City. This will prevent Mexico from
consideration of the impact on airlines becoming a competitive regional and
connectivity
and passengers. international gateway.
A number of countries are responding A common vision of the

to IATA and airline concerns to ensure airport of the future
that economic regulatory processes The lack of major airport expansion
are in place to safeguard the interests in 2018 highlights the importance of
A
of airlines and passengers. These maximizing the efficiency of existing
irlines require access to Too often, airport and ATM include Bahrain, Brazil, Kuwait, Nigeria, infrastructure. New Experience Travel
sufficient, high-quality, and infrastructure investment is determined and Saudi Arabia. Conversely, progress Technologies (NEXTT) is a joint initiative
cost-effective infrastructure without the necessary input from remains slow in ensuring fit-for-purpose of IATA, Airports Council International
to meet the rising demand airlines. Also problematic is political regulations for airport privatizations in (ACI), and other airport service providers
for air transport. This is essential if air decision-making that slows down Australia and Portugal. This has resulted to define how technology and additional
transport, the “business of freedom,” and increases the cost of developing in increased costs for all airport users, advanced processes can expand
is to continue to deliver its many social much-needed infrastructure for airlines including customers. capacity and raise the efficiency of
30 and economic benefits globally. and consumers. ground operations at an airport. 31
Political decisions
Infrastructure development, though, Developments in 2018 There are around 200 capacity- A NEXTT-related cost-benefit analysis
is not keeping pace with an expected Airport privatization or corporatization constrained airports worldwide. The was undertaken to understand the
doubling of demand by 2037, and is being pushed by many lack of runway and terminal capacity is impact of technology on aviation. The
a crisis is looming. The industry’s governments. The driver for this is a major concern that urgently needs to implementation of technology in airport
collaboration with infrastructure often a focus on short-term cash be addressed. Airlines need functional infrastructure was compared with a
partners is critical to maximize gains for government coffers rather facilities that balance capacity with scenario where airports respond to
customer service and to boost air than improved efficiency, better demand to facilitate growth and that soaring demand on infrastructure with
connectivity. customer service, and financing deliver adequate levels of service to physical rather than technological change.
for infrastructure investment. improve operational efficiency, now The results were clear. Technology,
In 2018, IATA campaigned to ensure Fortunately, a recognition of the risks and in the future. delivered in a coordinated, holistic way
that infrastructure investments are of privatization involving aviation in accordance with NEXTT, can deliver
aligned to market demand projections. infrastructure monopolies is gaining And capacity expansion must significant, long-term benefits. The
IATA made clear that the air transport traction, and an increasing number move faster. In Europe, for example, leading drivers of cost savings include
industry requires infrastructure that of proposed airport transfers to the Eurocontrol estimates a shortfall in improved data sharing, analytics and
private sector are being questioned. capacity for up to one million flights processing, and automation.
accommodates growth in demand; a year by 2035. Any infrastructure
drives cost-efficiency and lower investment, however, in Europe and NEXTT is planned as a three-year
charges at airports; elsewhere, must follow an airline- program. Its success will be defined
promotes sustainable airport agreed airport master plan that guides by the provision of a forward-looking,
governance; infrastructure design and construction aligned approach to investment in
aligns airport investment with airline and triggers appropriately timed ground infrastructure that promotes
capacity needs; investments based on demand. seamless interoperability, operational
secures a reliable supply of jet fuel improvements, and capacity growth.
at competitive and transparent prices;
shapes a common vision of the In 2018, airports and a wide array of
airport of the future; and stakeholders showed strong interest
A recognition

underpins modernized, efficient air in NEXTT. The initiative’s partners
traffic management (ATM) systems.
of the risks of generated awareness and buy-in
through a webinar series, social media
privatization involving campaigns, and other communications.
aviation infrastructure NEXTT implementation will help align
airport investment to suit the needs and
monopolies is gaining traction expectations of airlines and passengers.
Infrastructure
Infrastructure
IATA activities in 2018 following best practice public- It is critical to ensure that Cost-efficiency and fair charges
private partnership models focused infrastructure development
Sustainable airport on efficiency and service levels matches airline growth projections In 2018, IATA held numerous, effective campaigns against airport charges settlements
governance should there be no alternative to and operational requirements. worldwide, often working in concert with carriers and associations at local levels.
The provision of functional and privatization or corporatization; and Unnecessary infrastructure
efficient aviation infrastructure should ensuring governments put development results in additional
be considered a fundamental public regulatory safeguards in place that costs and inefficiencies that can
service and an essential economic protect the interests of airlines, reduce demand for air travel and
generator for any country. Airports passengers, and other airport users. weaken the case for investment.
do not naturally or usually have Consultation with airlines from
competition. When they are privatized Cost-efficiency and fair an early stage of infrastructure
or corporatized, the pressure to charges development is essential and should
maximize shareholder returns too Infrastructure charges must be be mandated by regulators to ensure
often outweighs the core objective set at levels that are fair, justified, that capital investments are cost- 4
of delivering user and consumer and reflective of a value service effective and that airport facilities
benefits. Effective regulation must proposition for airlines and are aligned with airlines’ needs.
prevent a privatized or corporatized passengers. Economic regulation
airport from becoming an out-of- that promotes transparency, In 2018, the ICAO Council
control monopoly. consultation, and productivity in unanimously adopted amendments
2
establishing an equitable charges to the Annex 14 Aerodromes, Design
Privatization or corporatization structure is the key to improving and Operations Manual to reduce
in various industry sectors, if airport cost-efficiency. Yet, despite runway and taxiway widths and to 3
structured appropriately and carefully ongoing work by IATA to ensure that remove long-standing restrictions
monitored, can deliver benefits, transparent consultation processes on large aircraft, enabling them
including improved customer service are in place for the establishment to operate at many airfields and 1
and increased efficiency, investment, of fair infrastructure charges, many thereby reducing the expense of
and innovation. However, no airport challenges remain. new facilities. The impact of these
32 privatization to date has met long- changes will save the industry 33
term expectations, primarily for lack Infrastructure providers often enjoy billions of dollars in construction
of regulatory controls and balances. monopoly or quasi-monopoly status. costs. (see map on p33).
Too often, the driver for privatization So governments and regulators
or corporatization is raising quick must maintain vigorous oversight of Jet fuel supplied reliably
cash for governments. charges and development activities. at competitive and
(See map opposite). transparent prices 1. Africa and the Middle East 3. Asia-Pacific
In June 2018, IATA member airlines Jet fuel costs accounted for Following a recent campaign in Following a year-long consultation
unanimously passed a resolution IATA also continued to engage in about 24% of airlines’ operating Tanzania, security charges there were process in Japan, airlines concluded
at the 74th IATA AGM calling on various national airport charges costs in 2018. The precise cost to lowered, resulting in a $16 million a new, five-year pricing agreement
governments to exercise caution in consultations in Europe. A reduction airlines varies because of a lack saving. In South Africa, IATA and local for Narita Airport. At India’s Chennai
their airport privatization planning. of $48 million in charges was secured of competition in fuel supply and association involvement in the airport Airport, meanwhile, reductions in
A campaign was subsequently at Denmark’s Copenhagen Airport unjustified duties, fees, and taxes on charges setting process resulted in a landing and parking charges and in
launched drawing attention to the in 2018. But attempts to reduce jet fuel in some parts of the world. significantly lower charges increase the user development fee yielded
increase of costs and the lack of significant increases in charges at than proposed by the airport operator. reductions of $135 million for
investment stemming from poorly the Netherland’s Amsterdam Airport It is important that airlines have access This will lead to a cost avoidance of 2018–19.
regulated privatized or corporatized Schiphol and at Sweden’s airports to a reliable supply of jet fuel priced around $150 million by 2023.
airports. IATA’s campaign focused on were unsuccessful. transparently and competitively. In 4. Europe
the positive aspects of governments 2018, jet fuel prices in some countries 2. The Americas At a pan-European level, IATA
retaining control of principal Aligning airport investment in Africa, the Americas, and Central In Chile, the long-standing issue of continues to advocate for the
infrastructure and setting out the with airline needs Asia were still significantly higher than high airport fees has been partly replacement of the Airport Charges
terms for privatized airports to Building more infrastructure is the global average. addressed, generating reductions of Directive with stronger regulation that
adhere to, including essential. Any major investment in $418 million over four years. ensures that effective pricing control
airport facilities, however, must be IATA, together with airlines and is applied to airports with significant
ensuring airlines, as major underpinned by a robust business industry partners, has continued its market power. IATA and Airlines
stakeholders, are consulted on case and thorough consultation efforts to help improve the efficiency for Europe (A4E) commissioned a
privatization or corporatization plans; with the airlines that fund the of fueling operations for airlines and study to develop a simple yet robust
confirming that the rationale for development of infrastructure. their service providers. One such methodology to identify airports

any privatization or corporatization endeavor is the digitization of the fuel with significant market power and is
is in the interests of the industry and management process. All messaging advocating this methodology with
users and customers; standards required for fully paperless European regulators.
exploring alternative business operation have been developed,
models that do not necessarily and the industry is focused on
involve the transfer of assets to widespread implementation.
private owners;
Infrastructure
Infrastructure
Airport investments Fuel campaigns There was also ongoing work Flow Management liaison desk into
Joint IATA and industry efforts on safety mitigation related to the Air Traffic Management Bureau
IATA’s work to align major infrastructure investments with to open up the jet fuel market for unmanned aircraft systems (UAS). headquarters in early 2019 to
airline needs resulted in some substantial benefits in 2018: competition continue in many IATA collaborated with international start work with the Operation
countries, including Australia, China, organizations, regulators, member Management Center.
Cuba, Kazakhstan, and Mexico. airlines, and other partners on
Those efforts also continue to the efficient integration of UAS In Europe, en route delays doubled in
ensure the reliability of supply in into airspace. This includes IATA’s 2018 compared with 2017, to more
such jurisdictions as Australia, New continuing work with ICAO and more than 19 million minutes. The principal
Zealand, Nigeria, and the United partners on UAS traffic management, causes for the increase were a lack
Kingdom. South Africa, meanwhile, which, in turn, involves engaging of controllers at strategic times and
5
decided in 2018 to implement a crisis the UAS industry to develop new places; an increase in controller
6
management plan and to conduct concepts for UAS operations. strike action, primarily in France; and
4 a consultative process on storage systemic delays from a lack of capacity.
capacity enhancement. Space operations, meanwhile, are IATA responded by pushing a four-point
anticipated only to increase. And the plan for mitigating the impact of delays.
Industry campaigns to remove or goal here, too, is to integrate these
prevent unjustified fees and taxes operations, which traditionally occur Longer term, the solution is to engage
on international jet fuel are ongoing. in segregated airspace, with civil air navigation service providers
In India, the regulating authority aviation operations. IATA and others (ANSPs) and governments in National
announced a reduction in the fuel are working to reduce the impact Airspace Strategies (NAS). In 2018, two
throughput charge at Chennai Airport, the launch and recovery of space ANSPs in Poland and Italy, respectively,
saving airlines an estimated $30 million vehicles has on civil airspace. published strategy documents to this
2 for 2018–19. The Indian government end. The governments of Bulgaria and
1 further announced a reduction in Regional ATM activities Spain committed in 2018 to developing
the excise duty on jet fuel for 2018, In Asia-Pacific and North Asia, IATA NAS, and the French government will
granting domestic operations savings continues to advocate at every publish its NAS strategy in the second
34 3 34 of around $75 million. opportunity for the timely and quarter of 2019. 35
widespread implementation of the
ATM Developments Asia-Pacific Seamless Air Traffic In the Middle East, geopolitical issues
In 2018, IATA, ICAO, and other Management (ATM) Plan. Failure to do and a lack of capacity to meet the
partners continued to drive so will significantly increase delays increase in traffic remain the key
1. Johannesburg Airport 3. Buenos Aires Airport 5. Stockholm Arlanda Airport operational improvements. and fuel burn and emissions in the challenges. IATA continues its work
The Airports Company South Operational capacity improvements Airport operator Swedavia removed Among them was a change to the region. IATA is working especially with ICAO, airlines, and stakeholders
Africa (ACSA)’s investment plan at Aeroparque Jorge Newbery US preclearance from its investment requirements related to reductions hard on expanding its cooperation in the region to ensure seamless
was prioritized based on airline Airport (AEP) resulted in passenger plan. This achieved a $50 million in the separation between aircraft with the Civil Aviation Administration operations in all situations. In Africa,
requirements. This will speed up the experience and level of service reduction in the airport capital over oceans. The change involved of China (CAAC). An example of IATA is continuing its work and
addition of much-needed capacity improvements without the need program and resolved airlines’ transitioning to a performance-based IATA’s success in this regard is the advocacy for a Seamless African
and defer unwarranted investments in for infrastructure investment. A concerns on minimum connection standard requiring new equipment, move of the IATA China Air Traffic Sky that drives enhancements in
a $3 billion capital program. detailed review of airside, landside, times and capacity utilization. authorizations from regulators, and the safety and efficiency of flight
and air traffic control operations additional training for pilots. operations using collaborative
2. Brasilia Airport resulted in 66 recommendations 6. Manchester Airport decision-making.
Revisions to the design plans of the to improve operations, capacity, IATA’s involvement in and
terminal expansion were secured, and passenger experience. It is implementation of a consultation
improving capacity utilization and projected that implementing all of the governance structure as part of
connection times and simplifying recommendations, targeted for 2020, Manchester Airport’s £1 billion
passenger flows through the flexible could increase operational capacity at investment plan resulted in substantial
and efficient introduction of “swing
gates” for international and domestic
AEP as much as 35%. improvements in the design and
phasing of terminal piers, parking
Solutions for airports
operations. 4. Munich Airport
The Munich Airport investment plan
stands, and passenger amenities—
without raising capital costs.
At the 2018
was improved to increase capacity AirportIS year-end,
utilization, simplify passenger flows, AirportIS was
and optimize design. This will ensure AirportIS offers the most comprehensive passenger,
in use at
OVER 100
that the $400 million investment schedule, and cargo traffic data available in the marketplace.

program is aligned to meet the
needs of airlines. It is a market leader in airport business intelligence and is
used by over 100 airports and airport consulting companies
globally for air service development activities.
The latest version of AirportIS is powered by the Direct airports and airport
Data Solution and provides users unparalleled data quality. consulting companies.
Environment
Environment
Carbon Offset and
06
Reduction Scheme for
International Aviation
CORSIA addresses any increase in
CO2 emissions from international
Environment aviation above 2020 levels. It is an

economic measure that completes
the industry’s long-standing,
Enacting
four-pillar sustainability strategy
alongside operational, technical, and
infrastructure improvements.
policies
It is forecast that CORSIA will mitigate
around 2.5 billion metric tons of
CO2 and generate over $40 billion
that make a
in climate finance between 2021
and 2035. Airlines asked for its
implementation and will pay the bill.
difference
As of 1 January 2019, all carriers are
required to report their CO2 emissions
on an annual basis, although only
flights between volunteering countries
are subject to offsetting requirements
in the initial stages of the scheme.
L
By the end of March 2019, 79 ICAO
ike all industrial sectors, air Aviation marked the 10th anniversary member nations had volunteered to
36 travel must be environmentally of its sustainability strategy in 2018. apply CORSIA. 37
sustainable. With demand for A core element of the strategy is the
air transport set to double over push for progress on operational, To assist with CORSIA monitoring,
the next 20 years, pressure on the technical, and infrastructure reporting, and verification
industry to minimize its environmental improvements and the promotion requirements, IATA developed the
footprint will only intensify. of ICAO’s global standard Carbon online reporting system FRED+.
Offsetting Reduction Scheme for FRED+ facilitates the task of
Air Transport, the “business of International Aviation (CORSIA). preparing emission reports, chiefly by
freedom,” has made the world a The strategy’s aim is to deliver on pairing airline operators directly with
better place by heightening its industry commitments to stabilize net their national authorities for the safe
accessibility for ever-more travelers emissions by 2020, and to a net 50% and secure transmission of emissions
and shippers. To ensure that the cut in 2005 carbon emissions by 2050. data. Coinciding with the start of
opportunities made possible by the CORSIA baseline period, FRED+
aviation continue to be available, Developments in 2018 went live on 1 January 2019 with all
the industry must be committed Fulfilling the latter commitment will its core system functionalities fully
to sustainable growth. The rise be difficult, but there is pressure for implemented and tested.
in anti-aviation media coverage the industry to attain even this tough
and grassroots nongovernmental target. The industry, therefore, will need CORSIA provides global standards
organization (NGO) activity in 2018 to explore all environmental mitigation for offsetting that have won the
made this abundantly clear. possibilities. To this purpose, the support of the entire industry and
widespread employment of sustainable many national governments. There
Fortunately, the industry has in aviation fuels (SAF), which also marked are, however, exceptions that seek to
place a robust strategy that ensures its 10th anniversary in 2018, is crucial. deviate from the agreed international
its continued delivery of benefits The aim is for one billion passengers to standards for CORSIA and to use
worldwide. That strategy enables travel on flights powered by a mix of jet carbon pricing to justify levies on air
increasing numbers of people to fuel and SAF by 2025. transport. The European Union (EU)
enjoy the social and economic and China, for example, have adopted
benefits of air connectivity. Beyond carbon reduction, other unilateral rules for monitoring and

sustainability efforts are equally reporting emissions, and there
vital. Noise mitigation and waste are proposals to reintroduce
management have long been environmental ticket taxes in the
industry priorities. Airlines are also Netherlands and Sweden.
committed to raising awareness of
and preventing the illegal trafficking
of animals and plants.
Environment
Environment
Such decisions could be perceived as the first flight using jet fuel derived In 2018, there were several examples CORSIA will and generate over
2.5 bn $40 bn
a disavowal of CORSIA as the agreed, from alcohol by Virgin Atlantic and of policy improvements regarding
multilateral approach on aviation LanzaTech; SAF. The UK’s Department for mitigate around
climate action. This is particularly the introduction of SAF into the Transport allowed aviation to
disconcerting given that the hydrant system at Brisbane Airport, participate in ground transport
governments behind such decisions using the isobutanol to jet fuel incentives. The EU, meanwhile,
were instrumental in reaching an pathway produced by Gevo; agreed to apply an enhanced
agreement on CORSIA at the 39th major new SAF investments, the incentive for aviation compared with in climate finance
ICAO Assembly—an agreement that two most notable being more than ground transport under its Renewable metric tons of CO2
recognizes CORSIA as the market- $600 million by Fulcrum BioEnergy Energy Directive II, beginning in 2020.
based measure for emissions from for a production facility in the United
2021-2035
international aviation. States and over $1 billion by Neste Additionally, IATA remained at the
to substantially increase the SAF front of sustainability developments
Sustainable aviation fuels potential of its Singapore refinery; and at ICAO. IATA also represents the
The 10th anniversary of the first a $9 million commitment from industry in two leading sustainability
airline flight using a blend of Japan Airlines to invest with organizations: the Round Table
sustainable aviation fuels (SAF) municipal waste to jet fuel producer on Sustainable Biomaterials and
occurred in 2018. In that decade, over Fulcrum BioEnergy. International Sustainability and
165,000 flights have flown with a SAF Carbon Certification (ISCC).
blend. SAF are sourced from a variety The main challenge for SAF usage is
of renewable or recycled feedstocks to ensure enough volume is produced Illegal wildlife trade
and can deliver up to an 80% to achieve a competitive end-user The trade in endangered animals and
reduction in carbon emissions over price. IATA continually engages plants is the fourth-largest illegal trade
the complete life cycle of the fuel. with governments to develop after drugs, weapons, and human
policy frameworks that reduce SAF trafficking. Although the responsibility
The aviation industry is increasing production risks and facilitate access for prosecuting traffickers lies with During 2018, a further 15 airlines Waste and environmental IATA Environmental
its efforts to encourage the to funding for SAF production. governments and their customs, signed the Buckingham Palace management Assessment
38 development and use of SAF. By the User-friendly SAF accounting border, and wildlife protection Declaration. That initiative from the Increasingly, attention is being drawn IATA leads the application of the 39
end of 2018, more than 40 airlines methods; a global, mutual recognition agencies, the aviation industry is United for Wildlife (UfW) foundation to better waste management by ISO 14001 international standard
had used SAF. Other significant of sustainability standards; and committed to playing its part in raising set up by the Royal Foundation business sectors globally. Plastic for environmental management
milestones in the production and the recognition of SAF within the the awareness of and in preventing includes a transport task force. To waste in the oceans has become systems to the airline sector through
uptake of SAF in 2018 included ICAO CORSIA scheme are equally the appalling trade in wildlife. date, some 60 airlines and other an issue of particular concern. the IATA Environmental Assessment
important policy enablers. aviation stakeholders have joined Airlines seek to improve their rates (IEnvA). IEnvA improves airlines’
Helping the industry in this regard IATA in signing the declaration. of recycling and to overall reduce environmental performance by
is the Joint Passenger Services waste, but they are prevented in helping them implement best
Conference (JPSC). In 2018, the IATA’s involvement in the ROUTES many cases by highly restrictive practice and comply with domestic
JPSC adopted a recommended Partnership, which entered its third laws and regulations regarding the and international standards and
practice (RP) on the carriage of year in 2019, continued in 2018 separation and removal of waste obligations.
prohibited wildlife in baggage. The with a variety of activities related that has any organic contamination.
JPSC also included guidance on the to combating the trade in wildlife. Such waste is usually burnt or sent to As of 1 March 2019, 18 airlines have
safe handling of escaped animals Among them was the integration deep landfill. For the same reasons, achieved IEnvA Stage 1 certification
in the cabin in its Cabin Safety Best of an independent certification the substitution of plastic utensils and another 5 are preparing for
Practice Guide. into the IATA Environmental with alternative materials does not Stage 1 assessment. A single airline
Assessment; the development improve their recycling rate. is in preparation for IEnvA Stage 2
The aviation industry’s of a reporting application for assessment and, once certified, will join
three emissions goals aviation staff; the application of
strengthened protocols, standards,
Changes to international laws and
regulations are needed to help
the existing 6 IEnvA Stage 2 airlines.
and procedures; and the raising of airlines reduce and deal with their
awareness of this issue through, onboard waste. IATA is working to
for example, passenger-focused establish best practice procedures.
video and an e-learning module and It is also undertaking to advocate
Improving fuel Capping net posters for baggage handlers. with authorities worldwide for the
relaxation of regulations and laws
efficiency emissions where appropriate to improve airlines’
an average of through carbon- Cutting net carbon waste reduction and recycling.
emissions in half by

1.5% annually neutral growth
to 2020 from 2020 2050 compared
(CNG2020) with 2005
Cargo
Cargo
07 Cargo
Unleashing
the power of
data in cargo
40
processes 41
A
ir cargo plays a significant Demand for air cargo, though, is also
role in ensuring aviation is affected by other elements. These
the “business of freedom”. include the end of the business
Enabling global trade restocking cycle; weak global
stimulates economic growth and economic activity; the contraction of
promotes a better quality of life the export order books of all major
for all people in every part of the exporting nations, with the exception
planet, irrespective of them ever of the United States; and wavering
boarding a plane. consumer confidence. And with
most if not all of these elements in
Developments in 2018 play, the macroeconomic outlook
The operating environment for has deteriorated such that global
air cargo, however, is increasingly GDP and trade forecasts have been
challenging. Demand for air cargo revised downward.
experienced a notable deceleration in
2018, growing 3.4% compared with its The greatest opportunities in air
extraordinary 9.7% growth in 2017. cargo are in e-commerce and special
needs cargo, such as time- and
This softening of demand has temperature-sensitive shipments.
continued into 2019, and IATA To capitalize, however, it is critical
predicts 2.0% growth in freight that air cargo modernizes its
tonne kilometers (FTK) for the year. processes significantly.

The rise of protectionist policies
looms large over the sector and,
indeed, over the global economy.
The prosperity that globalization
generates and to which air cargo
contributes is dependent on borders
that are open to people and trade.
Cargo
Cargo
2018 air cargo performance Global standards Compliance with the DGR is especially Digital data will, moreover, assist
Global standards will ease important in the case of lithium the efforts of IATA’s Cargo iQ quality
modernization efforts, guarantee batteries. Passenger awareness management group. Cargo iQ helps
the flow of commerce, and secure (see page 19) must be matched with airlines and freight forwarders monitor
the air cargo supply chain. Other shipper adherence to the regulations. and benchmark delivery performance
cargo initiatives that will benefit from But rogue shippers that ignore global against their service promise, define
global standards include quality standards and products compromise common processes and procedures,
5.4%
Global capacity management, trade facilitation, the safety of air transport.Governments and promote best practices. Its
Global demand
3.4%
enhanced safety measures, and must do more to enforce the rules. Smart Data portal provides analytics
special cargo handling. on shipment performance and
IATA and industry action allows members to compare their
The goal is to make trade simpler, performance with the performance
cheaper, and faster. Critical in this Modernization of others in the air cargo community.
regard are the universal ratification The needs of today’s shippers Such capabilities will be increasingly
and implementation of Montreal can only be met with the sector’s relevant as e-commerce grows and
Convention 1999 (MC99); the revised modernization. IATA initiatives as shippers demand ever-higher
Kyoto Convention; and the World underlie air cargo’s innovation, and service standards.
Trade Organization (WTO) Trade the industry came to a resolution on
Facilitation Agreement (TFA). the sector’s modernization at the Special cargo
73rd IATA AGM in 2017. IATA initiatives in special cargo
Meanwhile, the Pre-loading Advance operations continue to ensure
Cargo Information (PLACI) initiative The e-air waybill (e-AWB) is a airlines’ compliance with the latest
Region Market share Demand Capacity by the Technical Experts Group on cornerstone of the industry’s digital regulatory requirements and with
Air Cargo Security (TEGACS) will vision. Although progress has been shippers’ growing demands.
Total Market 100% 3.4% 5.4% help to secure the supply chain. IATA slower than hoped, the e-AWB has
supports PLACI’s implementation reached critical mass, standing at IATA’s Center of Excellence
in the United States and welcomes 61% penetration at the end of 2018. for Independent Validators in
42
Africa 1.7% 1.3% 1.0% the requirement for it in Europe from Resolutions and recommended Pharmaceutical Logistics (CEIV 43
2021. PLACI standards are laid out in practices continue to be amended Pharma) addresses issues related to
Asia-Pacific 35.4% 1.7% 5.0% the well-established World Customs to make the e-AWB the default on pharmaceutical transport, and IATA’s
Organization (WCO) safe Framework enabled trade lanes. Center of Excellence for Independent
Europe 23.3% 3.2% 4.3% of Standards to Secure and Facilitate Validators for Live Animals Logistics
Global Trade. Work is also ongoing to ensure (CEIV Live Animals) improves the
Latin America 2.6% 5.8% 3.4% Dangerous goods
that IATA’s Cargo-XML messaging
standard—which expedites
safety and welfare of animals
transported by air. And as of 2018,
Global standards are especially vital business between airlines and cargo they are joined by IATA’s Center for
Middle East 13.3% 3.9% 6.2% for the safe transport of dangerous stakeholders—achieves universal Excellence for Independent Validators
goods, including lithium batteries. adoption. The standard has already for Perishable Logistics (CEIV Fresh).
North America 23.7% 6.8% 6.8% ICAO’s technical standards and IATA’s been integrated in two important
Dangerous Goods Regulations (DGR) customs systems: the WCO’s Cargo CEIV Fresh advances the handling
provide the necessary guidelines. Targeting System (WCO CTS) and the and transporting by air of perishable
Automated System for Customs Data products. The specific time and
Key points in 2018 air cargo performance Properly labeled and packaged in
accordance with those guidelines,
(ASYCUDA) World, a system used by
90 countries.
temperature requirements for food
and plant products makes them a
dangerous goods can be shipped challenge for air cargo. The CEIV
safely. IATA’s DG AutoCheck product The common data language of Fresh program meets their exacting
even checks the shipper’s declaration Cargo-XML will enable the IATA requirements based on IATA’s
Air freight Freight capacity Weakness in the for compliance with the DGR. ONE Record program, which grants Perishable Cargo Regulations (PCR).
demand ended was up 5.4%, global economy Complementing ICAO’s technical
supply chain stakeholders direct
access to shipment data using In early 2019, the Airport Authority
2018 up 3.4%, outpacing annual and consumer standards, the DGR and DG modern web standards. The first Hong Kong (AAHK); Cathay Pacific;
despite softening demand growth, confidence AutoCheck is IATA’s e-Dangerous standards for end-to-end supply Cathay Pacific Services Limited
Goods Declaration (e-DGD). The chain data connectivity were (CPSL); and Hong Kong Air Cargo
late in the year. but yields remained affected growth. e-DGD leverages industry initiatives agreed to in March 2019. Terminals Limited (HACTL) took a
robust. to digitize data and to embrace community approach to being the first

data-sharing platform principles. It organizations to put the CEIV Fresh
enhances transparency, traceability, program to the test and to become
and data quality. CEIV Fresh certified.
Solutions for cargo
Cargo
Cargo
In 2018, CargoIS Dangerous Goods Regulations Center of Excellence for
Independent Validators in
140 k
The DGR are the global reference for shipping dangerous goods by air. Pharmaceutical Logistics
CargoIS offered market dynamics
across more than The DGR has been the only standard recognized by the global airline IATA’s in Pharmaceutical
CargoIS is the leading 140,000 airport-to- industry for almost 60 years. Logistics CEIV Pharma aims
source for air cargo business airport trade lanes; to improve the handling of
intelligence. It is the most complete, up-to-date, and user-friendly reference for pharmaceutical products by
dangerous goods handling in the industry. introducing a standardized
Its information spans the pharmaceutical-handling
entire supply chain: airlines, process at airports globally that
general sales agents (GSA), complies with pharmaceutical
OVER
freight forwarders, ground manufacturers’ requirements.
handlers, airports, and many
30 k
100,000
others.
reflected the business of
CargoIS gets its data more than 30,000 freight
from two sources: forwarders and more than
200 airlines and GSA;s;
CASS, the Cargo Accounts
Settlement Systems operated
by IATA and used by airlines to
settle with freight forwarders
and once the sole data source
for CargoIS, and units of the DGR are shipped
CEIV Pharma’s
contributing airlines, provided data sourced from worldwide every year, numbers for 2018
21 mn
CASS, meaning the more
demonstrating its widespread
through a new data source,
were as follows:
44 CargoIS Direct Data than 21 million records of 45
764
(CDD), that complements
CASS data.
airway bill information per
annum that are fed into adoption and industry compliance.
Cargo IS; and
CargoIS is the only air
cargo intelligence solution DG AutoCheck
combining the advantages
of actual transactional data DG AutoCheck is an acceptance validation tool. people trained
228
with voluntarily contributed
data, resulting in the best It automates the checking of dangerous goods against
data quality on the market. the DGR without slowing the check-in process.
32 bn
And now, with the CDD
source, subscribing airlines It provides the acceptance checker with an image of the
can access commodities offered data representing shipment for physical inspection.
$32 billion worth of entities certified
71
transported and benefit from
unrivaled market coverage. air freight charges. DG AutoCheck makes significant process, cost, and safety
improvements to the acceptance process for dangerous goods.
At year-end 2018, there were 21
CEIV Pharma Communities:
Before DG AutoCheck’s launch in 2018, it involved North America Liege
11
Miami Madrid
IATA Net Rates Dallas/ Ft. Worth Paris
Edmonton Rome
IATA Net Rates connects airlines and freight Anchorage Warsaw
forwarders to securely manage and distribute cargo and an industry
rates. Airlines can automate the creation, management working group of Europe Asia
OVER 25
and distribution of their rates, while forwarders are Amsterdam Hong Kong

able to access all airlines' rates in one system. Athens Singapore
signed test customers Barcelona Osaka
The platform supports the distribution of a variety Basel Taipeh
origin countries have of rate types, including market rates, contract rates companies Brussels Mumbai
and spot/ad-hoc rates. It is accessible via the web or Frankfurt Seoul
subscribed to CargoIS. can be integrated into customer’s rates management
from across the
systems using web services. supply chain.
Passenger experience
08 Passenger experience
Meeting increasing
demand with
improved service
P
assengers no longer of baggage. By the end of March 2019, IATA has developed a comprehensive
simply buy an air ticket; 48% of travelers had access to the open borders strategy that will help
they purchase a travel complete Fast Travel experience. governments maintain the integrity
experience. Improving of their national borders and that
that experience—from booking The Fast Travel experience, though, will eliminate the inefficiencies
and check-in, through security, to varies by region. Africa and North preventing the industry from
46 collecting luggage—is the focus of Asia have focused on mobile satisfying travel demand. Its four 47
an array of airline initiatives. boarding pass and self-tagging main components are as follows:
options. The more mature markets reviewing visa requirements and
Prominent among those initiatives of North America and Europe have removing unnecessary travel
is the automation of a growing emphasized end-to-end biometric restrictions, making travel facilitation
number of airport processes, self-service implementation. a part of bilateral and regional trade
improved baggage handling and negotiations, linking registered-
tracking, a single identity token for IATA’s focus in 2018 continued to be traveler programs, and using
all travel processes using biometric on removing obstacles that prevent advance passenger information (API)
identification, real-time flight airlines from implementing Fast Travel effectively and efficiently.
information sent directly to personal solutions. There is great incentive
devices; and seamless border control. to clear the way for Fast Travel. It is To further traveler convenience,
estimated that Fast Travel will reduce IATA launched One ID in 2018, an
These and other solutions will industry costs by $2.1 billion when initiative that aims at seamless and
also help the industry deal with a fully implemented. secure processing for passengers
doubling of demand over the next from airport door to flight gate. One
two decades. Delivering an ever- Travel facilitation ID introduces a collaborative identity
higher degree of personalized and IATA is calling on governments to management platform that covers
convenient experience that puts the intensify their efforts to spread the all processes and stakeholders in a
passenger in control will therefore economic and social benefits of passenger’s journey. The passenger’s
not only benefit travelers but also aviation. It is in particular seeking identity is validated early with
facilitate the most efficient use of the removal of onerous barriers to trusted digital biometric recognition
constrained airport infrastructure. the free movement of people across technology, and the validation data
borders. Barriers to travel range from is then made available to the relevant
Developments in 2018 visa restrictions to the inability of stakeholders on an authorized-to-
Fast Travel provides a seamless airport processes and infrastructure know basis. One ID removes the
experience for passengers from to deal with the growing numbers of need for passengers to present
terminal door to aircraft seat. The air travelers. different travel tokens to different

program offers passengers self- stakeholders.
service options at six points of
contact with airport functions:
self- or automated check-in, self-
tagging of baggage, self-checking
of documentation, self-rebooking of
flights, self-boarding, and self-recovery
2018 Global Passenger Survey Key Results
For travelers, NDC means greater IATA’s outreach on behalf of the Airlines, meanwhile, won’t have
25-54 TOP 3
transparency when shopping with a NDC to the overall travel community any further need of relying on the
travel agent, online travel seller, or continues apace through advisory time-consuming and expensive
o rt ch
sp o self-booking tool. They also have the groups representing the travel buyer reconciliation of different reference
year olds prefer things people option either to be recognized by and and travel management communities. numbers. This will help them
68%
os
th ei r pas
to receive customized offers from Engagement with the travel industry streamline their reservation
electronic want to
45%
the airline or to shop anonymously. also occurs at the annual Business management and financial processes,
e b i o metr
boarding pass notified about Travel agents, meanwhile, can access Travel Summit, an invitation-only event eliminate their dependency on
+55
an airline’s entire product portfolio, for the business travel value chain that industry-specific accounting
1
including ancillaries and promotional is in its fourth year. NDC is also widely solutions, and simplify their interlining
Flight fares, using NDC. represented at the annual Airline delivery and accounting processes.
ce
ic
i.d to repla year olds prefer
status
The NDC initiative advanced further
Industry Retailing Symposium (AIRS). Airlines also will be able to seamlessly
sell, account for, and track the
2
ONE Order
printed pass Bag info/
in 2018. By year-end, some 65 airlines
and 65 information technology (IT) IATA’s ONE Order program builds
delivery of flight and non-flight
products and services in a fashion
of air travellers
65%
wait time providers and aggregators, including on the digital transformation made similar to that of any retailer.
prefer self service all three global distribution systems, possible by NDC. In short, ONE Order
for delivery had attained NDC certification. replaces a paper-based framework The first ONE Order message schema
bag drop options
3
Involvement in NDC is ongoing in with digitized order management was released in September 2018
Wait 2019, with 144 companies certified processes. E-tickets, passenger following the conclusion of the ONE
as of 20 March. name records (PNR), and electronic Order trials that commenced at the
willing to share time at miscellaneous documents (EMD) end of 2017. To date, nine ONE Order
personal info to security/ Widespread NDC implementation have been digitized for some time. trials have been conducted.
by airlines, travel sellers, and IT But until ONE Order, they remained
speed up airport border providers has ushered in a change mired in the rigid booking, ticketing, And in January 2019, IATA launched
of focus for NDC. The emphasis delivery, and accounting methods the ONE Order certification
processes now is for a critical mass of NDC- designed for the paper era. registry. The registry ensures
48 based transactions from their still the transparency of ONE Order 49
small volumes. To spearhead this ONE Order instead generates a single deployments, validates the
effort, IATA established the NDC customer record holding all the data capabilities of the program’s
In 2018, four groups of experts Baggage tracking New Distribution Capability Leaderboard of 21 airlines seeking required for air travel order fulfillment. supporting IT providers, drives ONE
were formed to evaluate One ID’s Awareness is high within the The New Distribution Capability to rapidly grow their NDC volumes. Order’s innovation, monitors the
deliverables. Those groups applied industry that 84% of passengers (NDC) is transforming the way airline Each of these 21 airlines targets For travelers, that means simplicity. program’s progress, and bolsters
their expertise to examining the expect to have their bags tracked products are retailed by addressing having 20% of its sales powered They will no longer need to juggle ONE Order adoption.
initiative’s business case, operational and that IATA Resolution 753 limitations such as the following in the by an NDC application program different reference numbers and
processes, legal situation, and requires IATA members to track third-party distribution of products: interface by 2020. documents when checking in or The move to ONE Order is a large-scale
technological roadmap. They then passengers’ baggage at key points making changes to their itinerary. With transformation project encompassing
authored the One ID End State and in passengers’ journeys. To date, The inability of airlines to As the NDC strives for critical mass, a single reference number, travelers airlines’ internal processes and
Key Principles paper, which was 78% of IATA members track bags differentiate product offerings NDC Leaderboard airlines in the will be easily recognized by all service procedures and their organizational
published in December 2018. in some way, whether with optical The excessive time to market for vanguard, IATA is introducing changes providers. Disruptions and rebookings structure. It also impacts also
systems, barcodes, radio frequency new products and services to its NDC certification program to will be easier to manage as well. interactions between airlines and other
Baggage identification (RFID), or manually. The impediments to consumer support the industry through this industry partners including passenger
Airlines carry approximately five That so many IATA members are comparisons of the full value of an phase of NDC’s rapid volume growth. Travel agents, too, will benefit from service system suppliers, airline
billion bags annually. The majority tracking passenger baggage airline’s offerings rather than, as is The changes include recognizing ONE Order. They’ll be able to employ e-commerce platforms, travel agents,
of those bags arrive on time is laudable. But their use of so typically the case, only its base fares the ability to process service a single, identical process to book global distribution systems and others.
with their owners. Over the past many disparate tracking options messages, such as flight changes and flights and products for all airlines As such, it appears likely that there will
decade, baggage mishandling has undermines the common capability NDC’s success in overcoming such cancellations, using NDC. Additionally, regardless of an airline’s business be a transition period, during which
dropped around 70%. In 2018, that the industry requires. limitations is largely attributable to a new designation, NDC@Scale, model or technological capability. airlines will need to operate with both
however, the mishandling rate for the development and introduction is being introduced. NDC@Scale existing legacy processes as well as
baggage rose 2.2%, to an average For this reason, IATA is proposing of its XML Internet language as will recognize the ability to process the new standards.
of 5.69 mishandled bags per 1,000 to make RFID the standard method the standard for communications large volumes of NDC-supported
passengers emplaned. The cause of tracking baggage. This will set between airlines and travel agents. transactions and will grant special
of the increase was the heightened the direction for baggage handling The XML standard enables airlines recognition for the ability to meet
demand that the growing number of system design specifically and to display and sell ancillary products business travel needs through NDC.
passengers is placing on baggage infrastructure improvements in and services through travel agency

handling system capacity at airports
worldwide. With passenger volume
general to include RFID as a default
tracking technology.
and other third-party channels just as
they do on their own websites. This
For travelers, ONE
expected to double by 2037, more was difficult to impossible for airlines Order means simplicity.
attention than ever will need to be to do owing to limitations in the pre- They will no longer
paid to baggage operations to ensure Internet language that power
that passenger’s high expectations most travel agent systems. need to juggle different
for convenient travel are met. reference numbers.
Solutions for passengers
Airs@t Timatic
Airs@t Passenger Satisfaction Benchmark study is the Timatic is the industry’s definitive source for ensuring
industry reference for airline benchmarking. airlines’ compliance with passenger travel document
requirements.
It tracks passenger satisfaction on detailed travel
attributes giving airlines actionable insight on the entire Its flexibility allows it to be integrated into airlines’
travel experience: pre-flight , in-flight and post-flight. departure control systems and into kiosk and mobile
check-in procedures.
Airs@t uses scientifically proven and unbiased methodology
to collect a sample that would represent the actual population Timatic is updated at least three times daily throughout
of the respective airline’s passengers. Random selection of the year to ensure its application of the latest regulations.
the respondents and multiple control measures included in the
survey process help to ensure that collected data is of highest
relevance. The same methodology is followed for all airlines to Timatic’s highlights in
guarantee reliability of benchmark data. 2018 were as follows:
With unlimited potential for customer data analysis,
650
Airs@t acts as a support tool to complement the Customer
Insight activities at the airlines.
million
Airs@t at year-end 2018 included
50 passengers had their 51
documents checked
320
+80
airlines used Timatic
detailed travel
85
airlines employed
attributes automated document
5
verification powered by
Timatic AutoCheck
global routes
1,600
30 airlines
government and airline
sources gave information
+62,000

passengers
Financial services
Financial services
09 Financial services
52 Streamlining the 53
financial services
T
he landscape for payments from airlines to airlines, and from airlines
worldwide has undergone to suppliers. In 2018, IATA enhanced the
major changes, first with the IFSS’s management of credit risk, through
introduction of online payments the launches of the New Generation IATA
and, more recently, through the advent Settlement Systems (NewGen ISS) and
of mobile payments. New regulations to the introduction of Transparency in
keep pace with the evolving technologies Payment (TIP).
have an equal impact on the payments
landscape. The European Union (EU)’s Also in 2018, the IFSS, which operates on
Payment Services Directive 2 (PSD2) a cost-recovery basis in accordance with
Application Programming Interfaces rules agreed to by system participants,
(APIs) enable instantaneous payment processed $466 billion. The vision is
for consumers. to move from its largely conventional
processing of payments to digital payments
IATA is negotiating the altered payments that are 100% safe; 100% instant; and
terrain with significant investments to 100% frictionless—meaning zero cost—for
maintain the relevance of its payment all stakeholders. IATA will achieve this vision
and settlement services—making them by leveraging the latest technologies, such
safer, faster, and more cost-effective than as API and blockchain, and by working
ever. The backbone of those services, closely with its industry partners.

IATA Financial Settlement Services (IFSS),
facilitates payments to airlines from
travel agents and freight forwarders,
Financial services
Financial services
Direct Data Solutions
IATA settlement systems The IATA Clearing House (ICH) IATA’s Simplified Invoicing and
provides fast, secure, cost-effective Settlement (SIS) is a cost-effective
IATA’s Billing and Settlement Plan settlement services to 445 airlines, electronic invoicing platform that
(BSP) facilitates and simplifies the airline-associated companies, and removes all paper from the invoicing
selling, reporting, and remitting airline travel partner participants. and settlement of industry services. Direct Data Solutions (DDS)
procedures of IATA-accredited In 2018, the ICH processed $62.1 SIS is streamlining processes by is a game-changing, industry-
travel agents and improves the billion and had a financial settlement enabling the exchange of electronic sponsored program that provides
financial control and cash flow for success rate of 99.999%. data among airlines and between the travel industry with timely,
As of December 2018, the DDS
approximately 400 participating airlines and direct operating cost accurate, cost-effective access to encompassed the following:
airlines. The BSP processed $248.8 IATA Currency Clearance Services suppliers. The use of a single global airline market data.
1.91 bn 89,000+
billion in 2018 and at the close of the (ICCS) offers global cash messaging standard, the ISXML,
year boasted 136 operations in 181 management that enables airline simplifies business activity for the Participating carriers gain easy
countries and territories. Their overall treasurers to centrally control and industry and allows suppliers to use access to the most comprehensive
on-time settlement rate was 99.997%. repatriate their worldwide sales. one invoicing standard for all of their global data set, aggregated from
The ICCS is used by more than 320 airline customers. such multiple sources as ARC Air
One of the main benefits of the BSP
is that it generates significant cost
airlines and is available through over
200 IATA BSP and CASS operations In 2018, SIS had more than 2,483
Logistics, Inc.’s area settlement
plan (ASP) transactions, IATA’s TICKETS TRAVEL AGENTS
savings for its participants through worldwide. The ICCS was responsible participants, including 426 airlines, available BSP transactions, and
economies of scale. The greatest in 2018 for repatriating over $815 313 suppliers, and 1,744 other carriers’ contributions. with YoY increase of 7%
from indirect channels
2.19 bn 90
benefits, naturally, are delivered to the million from countries with severe entities enabled as receivers of SIS
largest users of the BSP, although no currency liquidity issues, such as e-invoices to maximize efficiency No matter what business
airline to date accounts for more than Zimbabwe; the nations of West Africa, on the invoice sender side. SIS intelligence you require - network
6% of total transaction volumes. The including Nigeria, and of Central processed over 1.6 million interline planning to fleet planning,
743 million transactions processed Africa; and Trinidad and Tobago. and supplier invoices and settled revenue management, sales
AIRLINE
PASSENGERS,
through all BSPs in 2018 resulted CASS operations globally also $74.82 billion in volume during the and marketing, or business and
in an average cost per transaction supported IATA members in markets year under review. product development -
of $0.07, with the cost of some where liquidity can be complex and the DDS delivers.
contributers
54 transactions as low as $0.04. IATA is repatriation delayed. Overall, the NewGen ISS with YoY increase of 7% 55
determined to lower this even further, ICCS processed $39.1 billion in 2018. Since its launch in 1971, IATA’s BSP
the aim being to reach zero cost has eased, secured, and made safe
per transaction in return for higher IATA’s Enhancement & Financing the distribution and settlement of
volumes of transactions from IATA (E&F) ensures that air navigation funds between travel agents and
members. service providers (ANSP) and airports airlines. Its rules, however, were The NewGen ISS was launched GoStandard Accreditation It includes Global Default Insurance,
have access to IATA’s globally trusted established in an era of paper ticket by IATA to ensure the continued corresponds most closely to the a financial security option for travel
IATA’s Cargo Account Settlement systems and processes for the stock, brick-and-mortar travel relevance and value of its BSP to accreditation specifications in agents that presents a cost-effective,
System (CASS) simplifies the billing generation of accurate billing data, agencies, limited payment methods, airline and travel agent customers. place at this time and is for agents flexible, and collateral-less alternative
and settling of accounts between standardized e-invoices that can be and extensive airline industry For airlines, the NewGen ISS means operating in a single country. to bank guarantees and other types
airlines and freight forwarders. It automatically validated, and secure regulation. The rules required updating faster settlement, safer funds GoLite accreditation is “entry- of security.
operates through CASSlink, an fund collection. The E&F also helps to address today’s business realities, processing through an enhanced level” accreditation and involves
advanced, global, web-enabled airlines avoid late payment penalties, including the increasingly complex risk management framework, and a tickets issued with IATA EasyPay or a The NewGen ISS is being
e-billing solution. In 2018, CASS reconciliation headaches, and risks of airlines and travel agents. lower cost of distribution. For travel customer card. progressively rolled out in all BSP
processed $37.2 billion and had an disputes by standardizing the billing agents, the NewGen ISS offers more markets and has been implemented in
on-time settlement rate of 99.996%. process and providing a single point products and services, greater It features a modern risk some 50 areas to date. The intent is to
CASS featured 92 operations serving of contact for questions or conflicts. flexibility, and new and more cost- management framework that implement it in markets representing
235 airlines, general sales and service In 2018, the E&F processed $4 billion. effective solutions. ensures enhanced security for its 90% of total BSP cash remittances in
agents (GSSA), and ground handling participants, including a remittance 2019 and 100% in 2020.
companies at year-end 2018. The NewGen ISS is built on four pillars holding capacity (RHC) for cash sales
that enable it to best serve the needs outstanding to the BSP. IATA is also introducing an initiative
of airlines and travel agents: called Transparency in Payments
It encompasses IATA EasyPay, a (TIP). TIP is focused on providing
It offers three levels of travel agent new, voluntary e-wallet solution for airlines with increased transparency
accreditation and the ability for travel agents’ issuance of airline and consent regarding travel agents
The IFSS processed

agents to select the level that best tickets in the BSP. IATA EasyPay using their own cards for funds
$466 billion.
suits them and to move between provides agents with a fail-safe settlement. As it stands, airlines only
levels as their businesses evolve. way to continue selling even if they see the payment settlement costs

GoGlobal Accreditation is a reach their RHC and grants airlines after the fact, if at all. No method
“one-stop shop” for agents with a low cost per transaction and fast of settlement is barred by TIP,
operations in multiple BSP markets. settlement. It is also designed for but agents can only use methods
Multicountry agents will be able GoLite travel agents. consented to by an airline.
to accredit all of their locations
worldwide under a single passenger
sales agency agreement.
Partnerships and Training
About IATA
About IATA
About IATA IATA Strategic Partnerships
IATA Strategic Partnerships is

In 2018, IATA Training
100k 350
trained more than offered over
a community of more than 400
Montreal Middle East & Asia-Pacific partners worldwide who share ideas
Head Office North Africa 80 Pasir Panjang Road and collaborate to improve aviation
#20-81 Mapletree Business City practices and technologies. people from 1,000-plus courses and more than
800 Place Victoria Business Park
organizations in 150-plus countries; 40 diploma programs; and
P.O. Box 113 Building No. 8 Singapore 117372
Montréal, Québec H4Z 1M1 King Abdullah Street
20+
IATA Training
450
worked with
Canada Al Shaab Roundabout Europe
Tel: +1 514 874 0202 Amman 1194 Torre Europa IATA Training puts participants from
Fax: +1 514 874 9632 Jordan 95 Paseo de Castellana around the world through realistic
resellers and partnering regional training
Madrid 28046 business scenarios and gaming
institutions, including partners,
Geneva Executive Office China & North Asia Spain situations to promote industry
standards; to help aviation-related
270+
33, Route de l’Aéroport 3rd Floor,
businesses operate safely, efficiently,
P.O. Box 416 China Digital Harbor The Americas
CH - 1215 Geneva 15 Airport No. 1 Wangjing North Road and sustainably; and to foster career
703 Waterford Way
paths in support of the more than 62
Switzerland Chaoyang District Suite 600 authorized training centers, and
million jobs related to aviation.
Tel: +41 22 770 2525 People’s Republic of China Miami, Florida 33126
170+
Fax: +41 22 798 3553 United States of America It carries ISO 9001:2015
certification in recognition of its
high quality and its solid quality
Offices based in Gender split
57 53% 47%
management system. accredited training schools.
56 57
countries male female

Employees from
99
nations

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IATA Annual Review 2019

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Annual Review

08 Director General and CEO’s message

24 Regulation and taxation