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No time to be shy

By Giovanni Bisignani, IATA's Director General and CEO 

The global economy is showing the first signs of a return to growth. But these green shoots of recovery have yet to appear in the industry bottom line. We now expect to end 2009 with $11 billion of red ink.

The dimension of this crisis is larger and will be longer lasting than the post-9/11 period. Combined losses for 2001-2 were $24.3 billion. For 2008-9, we will likely see losses of $27.8 billion. More worrying is the $80 billion in revenue that will disappear from the industry top line. It will be at least two or three years before revenues recover.

Auto manufacturers, banks and insurance companies sought survival through government bailouts. But airlines went about putting their house in order by cutting costs, conserving cash and adjusting capacity to match disappearing demand.

The quiet determination of our industry to solve our problems ourselves allowed many governments to ignore those problems that are their responsibility.
Aviation’s mission to connect the globe is critical to modern life.

We must not underestimate our importance. Our success or failure matters to at least 32 million jobs and $3.5 trillion in economic activity. This crisis is a rallying call for aviation to get much more vocal about putting its issues on the agenda of governments.

The solutions we need generate broad economic benefits. Allowing airlines to grow into global businesses with access to global capital and the ability to consolidate across borders has no cost to governments. But the $490 billion economic stimulus that this would create could provide tax revenues to governments and provide employment for up to
24 million people.

Effective air traffic management solutions improve environmental performance and competitiveness. Optimizing routes comes with minimal cost to governments but generates enormous efficiencies for airlines. Since 2004, IATA’s route-shortening program has saved billions of dollars in costs and 34 million tonnes of CO2. Where more significant investments are required, the payback in skilled jobs is impressive. Even the initial stage of US NextGen would provide employment for 77,000 people.

With governments meeting in Copenhagen in December, environment is the challenge for the coming months. Our targets are ambitious: carbon-neutral growth from 2020 and cutting our emissions in half by 2050. What do we ask of governments?

That they treat us as a global sector, improve infrastructure and provide the fiscal and legal framework for the development of sustainable biofuels. Biofuels have the potential to reduce the industry’s carbon footprint by up to 80%. Moreover, source crops such as carmelina, jatropha and algae have the potential to stimulate economies in the harshest of climates and landscapes.

Even in this crisis, aviation has a great story to tell. And we must not be shy about asking governments for critical change to strengthen this industry and the global economy.

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