International Air Transport Association (Iata) CEO Tony Tyler on Monday said the organisation expected the performance of the global airline industry in 2013 to remain largely consistent with the previous year, but added that the latest forecast saw the industry’s net profit margin improving slightly by 1.3% to an $8.4-billion profit on $659-billion in revenues.
In 2012, airlines returned an estimated net profit of $6.7-billion on revenues of some $637-billion – a 1% margin.
Addressing delegates at an Iata Legal Symposium in Berlin, Tyler said that, while these indicators would not impress long-term investors, in a market characterised by high fuel prices, low gross domestic product growth and economic uncertainty, the industry’s performance represented a major achievement by airlines.
He added that an increasing industry challenge was evolving passenger rights regulations, which an Iata chief economist listed as among the greatest threats to airlines’ bottom line.
“Of course, airlines have a responsibility to get passengers safely from point A to point B. And when things go wrong, as they sometimes do, passengers should know what they can expect, which is why it is critical for regulations to be clear and fair,” Tyler commented.
He said it was vital for policy to maintain a balance between protecting the best interests of the travelling public and the costs imposed on the airline.
The Montreal Convention of 1999 established the basic principles of an airline’s liability to its customers and had been adopted by 103 States as the global standard.
However, Tyler noted that governments around the world – for various reasons – had started developing their own rules and regulations.
“The potential costs to the industry are huge, and this problem is not confined to Europe. Within the last three years, passenger rights legislation has come into force in Brazil, India, Pakistan, Venezuela, Thailand, Turkey, Israel and the Philippines,” he said.
He warned that even more countries across Africa, Asia and Latin America were expected to follow suit.
Iata would focus on engaging governments around the proliferation of regulations in this area as one of its strategic priorities for 2013.
“We can help influence positive results from governments if we approach them with a united position,” Tyler said.