Growth in the passenger transportation segment is outpacing that of air cargo volumes, which expanded just 2.2 percent in 2015 compared to 5 percent in 2014, according to Tony Tyler, director general of the International Air Transport Association.
The global air cargo industry is expected to generate $50 billion in revenue, down from the peak of $67 billion in 2011, Tony Tyler, director general of the International Air Tansport Association, said at a roundtable discussion in Hong Kong on Monday, according to a copy of his prepared remarks.
Better technology, including electronic air waybills, and processes are needed to improve efficiency and attract more shippers to air transport, he said. Tyler, who is retiring from IATA this summer, praised Hong Kong carrier Cathay Pacific for its adoption of e-air waybills. The airline uses no paper for any of its operations in Hong Kong and is a leader globally with 60 percent of its customer documentation handled electronically.
Cargo volumes measured in freight tonne kilometers (FTKs) expanded 2.2 percent in 2015 compared to 5 percent in 2014. Revenue is falling along with growth.
Overall, the airline industry is forecast to make $36 billion in 2016, up 5 percent from last year, despite an economic slowdown in many parts of the world, said Tyler.
IATA, for example, released data showing that premium business travel is down due to the softness in global trade, which limits the need for people to manage business in other countries.
Airlines are beginning to generate returns similar to other industries after years of struggling to stay in the black. For the second year in a row, airlines are expected to deliver a positive return on capital, Tyler said.
Profits have been aided by lower oil prices and better capacity management, the trade association’s chief said. Airlines now regularly fill more than 80 percent of their seats and newer generation aircraft are up to 20 percent more fuel-efficient. Industry consolidation, joint ventures and alliances are also helping airlines be more efficient.
Although the airline industry is healthier than at any other time this century, carriers still make less than $10 per passenger carried, Tyler noted. Those profits can be wiped out if governments raise airport, infrastructure or security fees, he cautioned.
Also, profits are not evenly distributed. The majority of industry profits ($19.2 billion – or $21 per passenger) are being generated in North America. Asian carriers make about $5 per passenger, according to Tyler.
Tyler said China needs a better new air traffic management system to cope with traffic growth of about 11 percent per year, which is leading to delays at mainland airports. System-wide, about two thirds of flights in China arrived on time in 2015, 10 points worse than in 2010 – and that’s with a 30 minute buffer instead of the global standard of 15 minutes, he said.
With government and industry collaboration, on-time performance at major airports improved to about 75 percent in the last quarter of 2015, but seasonal factors may have played a role.
IATA: Airline industry shows mixed financial progress
