Tony Tyler became the sixth person to steer the International Air Transport Association when he took at the role of director general and chief executive 2011. With over three decades of airline industry experience, Tyler is a sturdy advocate for a secure, secure, efficient and sustainable global air transport industry. Here he talks to Breaking Travel News concerning the latest developments within the industry.
Breaking Travel News: IATA recently issued a chain of sturdy data suggesting airline performance was improving in a challenging environment. Are you able to bring us brand new with where you suspect the industry stands at this time
Tony Tyler: Robust is within the eye of the beholder. Last year airlines returned an estimated net profit of $6.7 billion.
Now, that could sound large, but that was on revenues of a few $637 billion, which translates to a one per cent net profit margin.
Not many would call that robust. But in view of the negative factors at work – high fuel prices, low global GDP growth and critical economic uncertainty – having generated any profit in any respect was a substantial achievement.
Turning to 2013, we predict much the identical. Our latest forecast sees the industry net profit margin improving to at least one.3 per cent. Europe will remain within the doldrums. Other parts of the area will see some modest improvements.
But continuing economic uncertainty coupled with high oil prices will continue to make the operating environment tough.
BTN: Which region excites you most when you think about the way forward for aviation Do you are feeling the center East will continue to dominate growth, or will Asia gather momentum
TT: Asia remains the emerging giant. Of the 831 million new passengers we foresee taking to the skies within the next five years, over 380 million of them might be in Asia-Pacific.
So in absolute terms, the region increases its already leading share of worldwide traffic.
The Middle East was the phenomenal growth story of the past several years, although its market share remains small in comparison to the Europe, North America or Asia.
There is lots taking place within the Americas.
Latin America has experienced rapid demand growth.
It has a rising middle class, some very dynamic airlines and a growing recognition at the portion of some governments that unless major steps are taken to enhance infrastructure, they won’t fully reap the giant benefits of connectivity that aviation can generate.
North America is the main mature marketplace for aviation. Its progress on consolidation remains watched with much interest.
And I see renewed optimism in Africa.
New business models are emerging. The commitment to safety is strengthening. And international business interests continue to fuel traffic growth. It still faces enormous hurdles.
But there’s a lot of fine work being done.
That is some distance of exclaiming that I see reasons for excitement in all parts of the arena. i’m hooked in to aviation and the force for good that it’s.
One of my key objectives at IATA is to get all of our stakeholders, particularly governments, to know the giant economic and social benefits of aviation. That aviation supports some 57 million jobs and $2.2 trillion in economic activity is widely known.
But we have to help policy makers remember the fact that there may be rather more below those top line numbers.
Aviation-enabled connectivity is an enormous economic driver in all parts of the sector.
Without it, modern life would look very different. The more governments understand this, the more win-win policy decisions we will expect to emerge.
BTN: Do you are feeling there’s any prospect of a Single European Sky being enacted within the near future How far along the trail do Functional Airspace Blocks take us
TT: Unfortunately for European travellers and businesses, the one European Sky remains rather more of an idea than a reality.
We haven’t seen nearly as much progress as is needed if aviation is for you to play a larger role in driving economic growth for the continent.
That’s why IATA, in conjunction with the Association of European Airlines and the eu Regions Airline Association, recently published a report ‘A Blueprint for the one European Sky’.
This outlined a probable future of SES, including rationalisation of air traffic control centres not to greater than 40 Europe-wide (down from the present 63), and reducing the numbers of back-office staff to levels toward those seen within the Country.
Steps like these would a minimum of take us a way towards delivering the unit cost reduction targets of SES.
The Functional Airspace Blocks that have been presupposed to encourage airspace efficiency and value reduction haven’t delivered to date.
There is an urgent have to have a look at an overall master plan for SES in an effort to take us to the goals on cost, safety, capacity and environment.
BTN: With a sequence of mega-mergers already completed over the last few years, do you are feeling consolidation will remain the order of the day within the aviation sector
TT: As airlines look to grow the networks and services they are able to offer their customers and attain economies of scale, consolidation is a natural decision in any market that has reached a mature stage of development.
It is very important that airlines be permitted to merge where it makes business sense to take action.
This isn’t any different than some other industry, and actually, the airline industry remains fragmented when compared with many consumer-facing sectors.
That said, true cross-border consolidation has proven extremely difficult to succeed in as a result of the regulatory structure that governs international aviation.
We have seen some exceptions, along with in Latin America, where a more modern approach by regulators has enabled a lot of cross-border deals including those of LAN and TAM and Avianca and TACA.
Changes within the structure of the industry don’t seem to be confined to the Americas.
There has also been consolidation in European markets through merger and bankruptcy in both the network and point-to-point sectors.
And we’re seeing the expansion of multi-national carriers through franchising inside the point-to-point sector in Asia Pacific and in Africa.
BTN: Are you able to bring us latest with the implementation of a brand new Distribution Capability
There was lots of confusion and dare I say misinformation about NDC. First thing to shed light on is that NDC is an IATA-led industry initiative to define a brand new messaging standard between airlines and travel agents.
IATA has a protracted and successful history of developing standards. Recent examples include standards for e-ticketing and e-freight, to illustrate.
And simply to be avoid any misinterpretation, NDC is an industry standard and therefore isn’t something or a fabricated from itself.
Developing the NDC standard might be good for travel agents. Why As it is meant in order for travel agents – who make up 60 per cent of the ticket-buying market – can market the entire range of airline products which might be found on an airline’s own website.
Although the worldwide distribution systems have tried to provide agents greater flexibility, the legacy GDS model has made this extremely difficult, that’s why you spot airlines ready to offer such a lot of more travel options all alone sites, whereas the travel agent typically has a far narrower product offering from which to sell.
Developing the NDC standard can be good for travellers.
We believe adoption of NDC will end in better-informed customers as airlines and third parties may be able to display additional information on flight options and services than is currently available during the indirect channel.
It also will enable comparison shopping among airlines, similar to today, but with the entire scope of the airline’s product offer, not only the bottom airfare. Adoption of NDC will permit travel shoppers to receive targeted, personalised offers irrespective of distribution channel.
However, and despite reports on the contrary, no customer must provide personalised information to receive a fare quote – no different than the location today
We are developing the common-or-garden with loads of collaboration and input from all participants within the travel value chain including travel agents, agent associations, airlines, GDSs and other technology providers.
In terms of the status of this system, we’re within the second year of the five-year roadmap.
Following a call by the Passenger Distribution Group (the IATA airline steering group for NDC) we’re negotiating with ATPCO for using Open Axis schemas as a basis of IATA’s NDC standard. Concurrent with this development, we’ve got just sent out an invitation at the NDC pilots.