IATA's Focus for 2011

IATA's Director General, Giovanni Bisignani, sums up the industry's position in 2010, and looks forward to a brighter 2011.

Airlines are back in profit. After losing $50 billion over the last decade, the $15.1 billion profit in 2010 is good news. But on revenues of $565 billion, this 2.7% margin is pathetic. We need 7–8% just to cover our cost of capital. Unfortunately, 2011 will be even more challenging. While revenues are expected to grow to $598 billion, profits are expected to fall to $9.1 billion for a razor-thin margin of 1.5%.

Enormous changes over the last decade have played a role in turning losses into profit. Labor productivity improved 63%. Fuel efficiency increased 20%. And sales and marketing unit costs were driven down by 19%. The $55 billion in cost savings achieved by IATA since 2004 in user charges, Simplifying the Business, and fuel savings also contributed.

The challenge is to use this window of profitability—albeit weak—to lay the foundations for a sustainable future. Looking ahead four decades, air transportation will serve 16 billion passengers and deliver 400 million tonnes of cargo. Vision 2050 will identify how to meet the expectations of these customers efficiently, sustainably, and profitably. We will benefit from the inspirational leadership of Singapore's Minister Mentor Lee Kuan Yew, the competitiveness expertise of Harvard University's Professor Michael Porter, and the strategic thinking of 30 global business and government leaders. I am confident that we will present some solid ideas on the future of our industry at the Cairo AGM.

In the meantime, the IATA Board of Governors has given us a challenging agenda that includes designing a security checkpoint of the future, expanding e-freight to 10% where possible, and saving a further $3 billion in charges, taxes, and fuel fees.

Building a sustainable future requires a common vision and commitment across all industry partners. Our work on climate change is a good example. Airlines, airports, ANSPs, and manufacturers share a commitment to improve fuel efficiency by 1.5% per year to 2020, to stabilize net emissions from 2020 with carbon neutral growth, and to cut emissions in half by 2050 compared to 2005. For our united approach, aviation was recognized by UN Secretary General Ban Ki-moon as being at the forefront of industries tackling climate change.

I look forward to another year of fruitful partnership in 2011 to build a future that is greener, more efficient, and much more profitable.

IATA Financial

IATA has built up a substantial portfolio of financial products and services to support its member airlines, airports, travel agents, and supplier community. This suite of related financial products and services are now conveniently consolidated under the new name IATA Financial.

IATA Financial's family of settlement, payment, and card services is designed to deliver simple, secure, and effective industry solutions with a view to reduce fraud, minimize risk, and save money.

Agostino Marcon, Director, IATA Financial, explains why IATA created the new entity: "By grouping these services under one umbrella, IATA can address the diverse financial needs of the air-transportation industry. With this consolidation, IATA Financial is focused, aligned, and comprehensive."

Settlement

This solution enables any aviation company to replace paper invoices with electronic invoices. The only electronic invoicing solution dedicated to the airline industry, it significantly reduces the cost of invoicing and simplifies the process.

The IATA Clearing House (ICH) is an electronic billing and settlement service between airlines and a limited number of airline suppliers (handling agents, fuel suppliers). It reduces administrative costs and simplifies processes.

Simplified Interline Settlement (SIS) facilitates interline billing and removes paper from the process. It aims to streamline accounting and reduce costs.

Complementing the Billing and Settlement Plan (BSP), the Travel Industry Exchange Settlement Solution (TIESS) facilitates electronic billing and settlement between airlines and non-accredited travel agents, and between other travel suppliers and both accredited and non-accredited travel agents at large.

Payment

Enhancement and Financing (E&F) services are used to invoice and collect airport and air-traffic control (ATC) charges through IATA's flexible financial systems. These services improve collection rates and lower administrative costs for the customer.

The IATA Currency Clearing Service (ICCS) offers airlines the ability to repatriate and convert foreign sales. With its favorable exchange rates, the ICCS helps to cut down on costs.

The Travel Agent Service Fee (TASF) is a service that allows travel agents to combine the payment of the ticket and the travel-agent fee into a single credit-card payment. This greatly improves customer service and reduces cost and administration for travel agents.

Card Services

CardAXS sends airline Visa and MasterCard payments from different countries to a single bank for settlement, reducing banking costs and streamlining accounting. It eliminates the need for banking relationships in multiple countries to process local Visa and MasterCard payments.

CardClear consolidates information on airline credit-card sales from all points of sale (travel agents, Internet, call centers), in all countries, into a single report. By simplifying accounting, it replaces multiple reports.

CardStats consolidates an airline's worldwide BSP credit-card transactions into a single report, giving quick, clear information on an airline's card sales.

CreditCard Optimisation Service (COPS) is a card-acceptance cost analysis and negotiation service. This service has reduced airline costs by $50 million.

Perseuss is an online platform where airlines store and share information on tickets bought with fraudulent credit cards. This shared platform helps airlines identify and stop future fraudulent purchases.

Learn more about IATA Financial.

AUGMENTIQ: A fresh take on security

AUGMENTIQ delivers analysis, intelligence, and strategic advice to organizations concerned about aviation security and border control. Across the industry, typical responses to either issue invariably require building a risk-assessment capability or deploying solutions to increase detection, intelligence analysis, or identity management. However, costs have run high—into billions of dollars every year—and continue to cut deep into the budgets and bottom lines of airlines, airports, and passengers around the world.

Security doesn't have to be cast as a necessary and costly annoyance. Instead, security can be viewed as the best available starting point to transform today's setup to do more and do it better: reduce risk, increase detection, improve checks, lower costs—and radically improve the passenger experience in the process.

Technology is evolving fast, and threats are ever-changing. Fortunately, many of the fundamental principles of aviation security remain well-proven and highly effective. Equipment and software will always need replacing or upgrading at some point. But critical to the industry's collective success is the need to make sure that the tools, principles, and best practices of aviation security are continually sharpened, evolved, and placed in the hands of well-trained, professional aviation security officers.

Throughout 2010, a number of clients invited AUGMENTIQ to analyze their business. The lessons learned changed the way it itself is run.

The major discovery was that the most successful clients by far are those that systematically invest in learning, training, and coaching programs. These are the organizations that routinely out-perform their competitors, adapt well to change, and make the most impressive improvements to bottom-line performance in the industry.

AUGMENTIQ's wish is to see the aviation industry properly equipped to respond quickly and decisively in times of change, all while reducing costs and improving profitability. Higher standards in aviation training—particularly in aviation security—will be central to making this wish a reality.

Matthew Finn www.augmentiq.com

Cargonaut B.V.: E-freight and the logistics chain of TSP transportation

All airfreight logistics-chain partners require up-to-date and easily accessible information about their shipments. In addition to eliminating the paper documents related to the air-cargo process, meeting this demand is what e-freight is all about.

Logistics-chain partners are well aware of the benefits of e-freight, including reduced costs, less paper, and higher efficiency. The problem, however, is that the entire supply chain must change its operational processes in order to reap these benefits. To implement change on this scale, cooperation and coordination are essential.

This year, the air-cargo industry is launching a new project in the Netherlands. Participants will join forces to build an open e-freight platform and introduce internationally accepted innovations. Cargonaut, one of the key stakeholders in this project, is happy to share its expertise as an information service provider.

One of Cargonaut's products, developed in conjunction with TRAXON Europe and the Cargo Community Network (CCN), offers freight forwarders and their logistics partners a tool to share information. Shipment information, such as air waybills, house-consolidation lists, and supporting documents—invoices, packing lists, and certificates of origin—become globally accessible at the right time and place. This product has already been used by Cyber Freight and Ziegler on several trade lanes.

Both of these solutions will help to implement e-freight and scale up the number of e-freight shipments.

Cargonaut B.V. www.cargonaut.com

Commport Aerospace Services Ltd.: The evolution of fuel management

The EU has also defined the method of calculating these amounts. Fuel mass, determined through density, is used to calculate the amount of carbon released. Historically, average values, supported by periodic densitometer checks, were used. Shown to be imprecise, these estimates risk increasing operating costs.

Not knowing—or guessing—the density can add up to significant costs for operators. Working closely with major airlines and IATA to address this issue, Commport Aerospace Services Ltd. (CASL) has proven that the required accuracy can be achieved for about US$0.06 a flight.

As part of the evolution of its electronic fuel-management system, CASL has worked with manufacturers to develop a low-cost yet highly accurate densitometer. This digital meter, which produces accurate density readings at the wing tip, determines the fuel density for each flight measured at the time of uplift. Recorded in the database, these measurements are subsequently made available for reporting.

For CASL, this solution is just one more element of the overall vision for efficient fuel management.

Alison Bartlet www.commportaerospace.com

KIU System Solutions: Business-management technology for airlines

Airlines are continually seeking new ways to distribute inventory so as to reduce costs without sacrificing markets or clients.

The situation in which low-cost carriers (LCC) recently found themselves illustrates the challenges presented by this growing trend. The LCCs, who had started developing their own online closed sales systems, were also forced to offer seats through global distributors. In contrast, traditional airlines began offering direct sales through their websites, while maintaining their more sophisticated distribution methods.

In response to this trend, KIU System Solutions offers airlines the technology to meet their business-management needs. The flexibility of the system developed by KIU allows both internal and external distribution methods to be combined.

KIU provides a third-party-free, low-cost business model for airlines operating in regional markets or within a specific niche. Moreover, the KIU tool can be used by travel agencies. For airlines requiring mass distribution, KIU also offers connectivity with global distributors worldwide.

KIU's solutions have been developed in compliance with IATA regulations and standardized processes to ensure proper cost control without compromising service features or quality.

Andrea Basso www.kiusys.com

MTU Aero Engines: Coatings for compressor protection

The very air can pose hidden dangers for aircraft.

Air carries natural contaminants, such as sand or other particles, which cause engines to wear faster than one might expect. Takeoffs and landings on sandy runways are not the only threat to power plants. The salt crystals and dust particles encountered during intercontinental high-altitude flights over the oceans can also take a toll on engine components. Erosion damage, however slight, will still raise fuel consumption by 1 or 2%. The alternative is the early and therefore costly replacement of affected components.

To guard against this type of wear and tear, MTU manufactures special protective coatings for sensitive engine blades. These coatings are based on the physical vapor deposition (PVD) technique MTU has developed and refined over the past 30 years.

The coating, whose multiple layers are so thin that they fall within the nanostructure range, dramatically enhances the action of conventional PVD technology. These multiple nanolayers combine the hardness of ceramic layers with the extremely high ductility of metallic layers. Ductility denotes a material's ability to change its form without suffering material separations. This property is extremely desirable in engine components subject to high rotational speeds and the accompanying vibrations.

This structural principle imbues the long-lasting coating with the strength to withstand the impact of solids in the air.

Service experience under extreme hot and sandy operating conditions has demonstrated that this highly effective erosion protection increases airfoil life by a factor of four.

Bernd Kriegl www.mtu.de/en

Navtech Inc.: An EFB solution to enhance safety and efficiency

Customer Amapola Flyg AB needed an Electronic Flight Bag (EFB) application to improve efficiency and address industry-related environmental issues. The company also requested that the application have low operating costs, be simple to use, and be highly flexible, so that the solution could be tailored to satisfy specific requirements.

Navtech's approach was to convert its existing electronic chart viewers into a reader application for Apple's iPad device.

Much like other EFB technologies, the new product reduces paper and clutter in the cockpit. However, it also decreases weight and fuel consumption. Its keyword search allows users to find pertinent information quickly. Plus, data can be updated through wireless transfer.

Approved by the Swedish CAA as a Class 2, Type B application, this solution also leverages the lightweight tablet format and is extremely portable. It utilizes many iPad functionalities, including swipe screens, playlist development, and pop-up menus to ease navigation.

As a result, pilots can access Navtech's 50,000-page charts library more easily. They can zoom in to see fine details and rotate, highlight, and write notes directly with a fingertip. With this tool, the workload on the flight deck will be reduced, thus increasing safety. Amapola Flyg AB is currently using the device in its fleet of Fokker 50 aircraft.

Andrea Murray www.navtech.aero

Power Stow A/S: Increasing efficiency when loading narrow-body aircraft

In the 1990s, the Danish health and safety authorities called for the introduction of equipment that could ease physical strain for airport-baggage loaders.

In response to this request, Power Stow developed a versatile belt-loader extension based on the concept of double conical rollers exposing a concave roller surface to guide passenger baggage of all shapes, sizes, and weights inside the aircraft.

Prior to the launch in 2005, testing was undertaken in cooperation with Novia, a handling company, at Copenhagen Airport. Through this partnership, the system was prototyped and tested operationally under the harsh conditions encountered every day on the job. The system is now in operation across Europe, the Far East, North America, and Oceania.

The use of the versatile belt-loader extension has resulted in a reduction in staff absenteeism due to easier, less stressful, and less physically demanding operations. Time studies conducted at Billund Airport, Denmark's second largest, on the loading of narrow-body aircraft have shown that the versatile belt-loader extension increases efficiency by 30%. For example, with the extension, Billund Airport operators were able to load 109 bags, at an average of 7.16 seconds per bag, into a 737-3 with just two operators: no doorman was required. This is a vast improvement over the rate of 78 bags, at an average of 10 seconds per bag, that operators achieved with a traditional belt loader.

Given that employing the versatile belt-loader extension does not require a doorman, the risk of injury is significantly reduced.

Power Stow A/S www.powerstow.com

SITA: Solving PRM challenges at airports

Slow resolution of issues related to Passengers with Reduced Mobility (PRM) can cause check-in delays. By ensuring smooth PRM coordination, airports and airlines can improve passenger flow as well as the travel experience of PRMs.

SITA solutions achieve this by addressing three areas:

First, by equipping staff with intelligent handheld devices, the handling of PRMs around airports can be greatly improved. SITA's mobile solutions for staff can increase revenues from PRM activities by 20% just by improving the recording and accuracy of billings for ad-hoc PRM requests. Average savings of 25% in PRM-process labor costs are also possible.

In addition, by ensuring accurate information is directed to the right person, at the right time, in the right place, PRM agents are able to provide a higher level of service to the airlines' passengers.

Second, dealing with various data formats and channels is a major challenge for airports. For example, notifications could come from airlines, airports, travel agents, or ground handlers in any type of format, such as mail, fax, type B, or telex. SITA's messaging solutions eliminate this complexity by converting all incoming messages into a single format.

London Heathrow receives PRM notifications from over 35 different airlines, processing about 3,000 messages daily. Efficiently handling this complexity was made possible by a solution SITA deployed in only a few weeks.

Third, integrating check-in equipment with IP Telephony systems allows for the faster check-in of PRMs by having the relevant PRM handlers a single button push away. The result is smoother passenger flow for everybody. PRMs receive prompt and efficient service, minimizing check-in and boarding delays.

Quentin Browell www.sita.aero

Swissport International: Lost-and-found self-service

Operational irregularities that can cause baggage mishandling, such as strikes or bad weather conditions, are very difficult to predict. Anticipating such events and the staff required to address them is a major challenge for the aviation industry. Faced with the necessity of reporting their missing bags at the airport, passengers may encounter additional stress and inconvenience, not to mention long waits.

Following the introduction of self-service solutions like web check-in and kiosks, Swissport is now offering the use of a self-service kiosk for passengers with missing luggage. This kiosk allows customers to declare their missing bags, describe the color and type, and provide their home and delivery address. Passengers can receive instant feedback if the bag has already been found and learn when delivery might be expected.

Two kiosks were placed at the Zurich and Geneva airports through 2010. More than 2,000 passengers used these self-service lost-and-found kiosks. The highest number of passengers declaring a missing bag at one kiosk on a single day was 64. The highest percentage of usage occurred in May and August 2010.

According to the feedback collected, passengers favored the self-service offer, as it allowed them to bypass lines during peak times. While no passengers were forced to use the device, an average of about 6–10% of all passengers used the device of their own volition. Usage figures increased during the weekends, with heavy interruptions due to snow and airport closures in December 2010.

Swissport plans to continue developing this self-service solution.

Swissport www.swissport.com

Simplifying the Business

Automated Baggage Rules to wrap up in 2011

Nicolas Bondarenco, Project Manager, Automated Baggage Rules (ABR), explains the latest addition to the family of Simplifying the Business (StB) projects.

Airlines used to apply simple baggage-allowance policies based on weight or the number of bags and then calculated excess charges accordingly. Today, more and more airlines are applying an array of baggage policies and charges. This adds complexity for travel agents, check-in agents, and interline partners, who are unable to assess carriers' baggage policies with ease. As a result, information to passengers is inconsistent. Moreover, standard interline rules that defined allowances and charges across more than one carrier expire on 31 March 2011.

The new degree of complexity requires a high level of automation, which is where the ABR project enters the picture. An automated baggage-rules solution will enable airlines to file their own baggage-allowance policies and charges to a centralized database developed by the Airline Tariff Publishing Company (ATPCO). This will reduce loss of revenue for airlines and lessen the complexity for travel agents, check-in agents, and interline partners, who will be able to assess carriers' baggage policies correctly and to deliver consistent information to passengers.

The IATA Board of Governors approved the ABR project in June 2010. The challenge is significant, since ABR aims to address a global problem in a very limited period of time. Partnering with ATPCO, IATA has been leading the first step by engaging the airlines to send their baggage rules to ATPCO. To date, 228 carriers in IATA's scope have submitted their data to ATPCO. ATPCO implemented the database solution in January 2011.

The challenge ahead is to embed the data into pricing and ticketing applications before the deadline of 1 April 2011, and then look to expand ABR to all systems. A clear link can be made to the sister project, IATA e-services, as the preferred method for collecting baggage fees and charges in the future will be through electronic miscellaneous documents (EMD).

Learn more about ABR.

Learn more about IATA e-services.

E-freight to focus on volumes

At the end of 2010, e-freight was live in 44 locations worldwide, with at least one live airport at each location: Australia, Austria, Belgium, Canada, Chile, China, Chinese Taipei, Colombia, Cyprus, Czech Republic, Denmark, Dubai, Egypt, Finland, France, Germany, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Kenya, Luxembourg, Malaysia, Malta, Mauritius, Mexico, Netherlands, New Zealand, Norway, Romania, Singapore, Slovakia, Slovenia, South Korea, Spain, South Africa, Sweden, Switzerland, Thailand, United Kingdom, and United States.

In 2011, e-freight has a new challenging target: Increase volumes to reach 10% market penetration on e-freight-live trade lanes. In parallel, IATA will continue to grow the e-freight route network by expanding the number of live e-freight airports. The final target is to have 100% e-freight by 2015.

Learn more about e-freight.

Stay up-to-date by visiting Simplifying the Business.

IATA Conferences and Events

IATA conferences, exhibitions, and industry meetings provide outstanding networking opportunities in addition to an association with the IATA brand,
a world-class global endorsement. These events cover areas as diverse as pricing, ground-handling, legal issues, fuel, and security, among others, which benefit airlines, airports, travel and cargo professionals, as well as service providers, and governments.

Featured events

• World Cargo Symposium 2011
  8–10 March 2011 — Istanbul, Turkey
  The upcoming fifth annual conference will concentrate on the value of air cargo by exploring the theme "Air Cargo: Connecting the World."

• CNS Partnership Conference
  1–3 May 2011 — Phoenix, Arizona, USA
  This year's conference will acknowledge air cargo's global value by bringing together industry executives to share their knowledge and experience and address the critical issues of the day.

• IATA 24th IGHC and Airline Ground Operations Meeting
  1–4 May 2011 — Kuala Lumpur, Malaysia
  This event features a program rich in information-sharing and networking opportunities, as well as interactive workshops.

• Aviation Fuel Forum
  10–12 May 2011 — Singapore
  The Forum is a unique platform enabling airline representatives, fuel suppliers, and Strategic Partners to discuss the industry's priorities and agree on actions that enhance efficiency and productivity.

• 128th Schedules Conference
  23–25 June 2011 — Gothenburg, Sweden
  The goal of the conference is for airlines and airports to obtain the slots that will give them the best possible schedule to offer their customers.


Watch for upcoming events!



• IATA Annual General Meeting
  5–7 June 2011
  Cairo, Egypt
  


• Revenue Accounting Meeting (RAM)
  September 2011
  Location TBD (Americas)
  

Visit IATA Events regularly for an updated list of all upcoming events.

Michael Huntington
Manager, IATA Conferences and Events
Tel: +1 450 715 1313

Since 1990, IATA Strategic Partners have been contributing to IATA and the air transportation industry through their involvement in the Strategic Partnerships program.

We are happy to introduce the following new Strategic Partners.
Access the company websites directly by clicking on their logos.

AUGMENTIQ		Cairo Airport Cargo Company		Flight Focus Pte. Ltd.
Gozen Security Services, Inc.		Hughes Aerospace Corporation		InterGlobe Technologies Pvt. Ltd.
		J.P. Morgan Chase
ISO Software Systeme GmbH		J.P. Morgan Chase Bank N.A. London Branch		Kaba Gallenschütz GmbH
		Kuwait Aviation Fuelling Company
KPMG		Kuwait Aviation Fuelling Company (KSC)		Libya Oil Aviation
		Morgan Stanley
Miami Technology Group, Inc. (MIATECH)		Morgan Stanley		Morpho Detection, Inc.
Mphasis, an HP company		Rational Business Corporation Private Limited		SkyNRG
Vietnam Air Petrol Company Ltd.

For a complete list of Strategic Partners, and to learn more about what they offer, please visit our online directory.