By Thomas Reynaert, IATA Senior Vice President, External Affairs
The global air transport system operates on the basis of standards and procedures created by disparate aviation organizations working together. And there is no stronger example of that than IATA’s longstanding partnership with the International Civil Aviation Organization (ICAO) which oversees the Chicago Convention (1944) and its Annexes containing the Standards and Recommended Practices that permit international transportation by air.
IATA and ICAO have had a symbiotic relationship throughout their respective histories. Both organizations were founded at the end of the Second World War to promote global air travel. Both organizations have been dedicated to the ‘democratization’ of safe and efficient air transport. IATA’s role is to closely follow ICAO’s standards and policy setting activity. In return, we give our members a voice so that the ICAO and its 193 member States understand industry requirements for safety and efficiency. It is a partnership, a mutual relationship, and a shared ambition for the safe and sustainable growth of aviation.
That ambition depends on durable global standards and policies. Together, ICAO and IATA have built the standards and operational best practices that have made global aviation the incredible network it is today. ICAO’s work is vital, and its Seventh Air Transport Conference, starting on 16 November, offers an opportunity to strengthen our industry, at a time when aviation faces intense financial, environmental, and geopolitical pressures.
Air transport is being stress-tested as never before. Fuel prices have doubled, supply chain problems are delaying more efficient aircraft, and conflict-related diversions mean longer flights burning more fuel.
Our June outlook projected global airline profits of about $23 billion, roughly half the 2025 level. A net margin of just 2.0% leaves airlines retaining around $4.50 per passenger. With such thin margins, higher fares may be unavoidable, undermining the benefits of aviation and the accessibility to air travel which people cherish.
IATA’s eight AT Conference papers – two of them in partnership with Airports Council International – address these challenges. And two priorities deserve particular attention: sustainability and taxation.
Airlines remain committed to decarbonization, but production of sustainable aviation fuel (SAF) is disappointingly low. Recent jet fuel supply uncertainty also highlights SAF’s potential contribution to energy security. Although widespread shortages are unlikely, limited buffers leave some locations vulnerable to disruption.
Working Paper 30 (pdf) calls for coordinated policies supporting SAF, lower-carbon aviation fuels, and other cleaner energies. A transparent, competitive global SAF market needs harmonized sustainability criteria and certification requirements. Purchase-based accounting, supported by a solidly founded registry such as CADO's SAF Registry, is also essential to making SAF accessible across global markets.
We must also protect CORSIA, the only globally agreed market-based measure addressing international aviation emissions. Working Paper 31 (pdf) urges states to authorize sufficient eligible emissions units to meet demand. The mechanisms and guidance exist; the necessary authorizations must follow. Extending the EU Emissions Trading System beyond Europe would undermine this global approach. Europe should align with CORSIA, not compete with it. Climate change is global, aviation is global, and our response must be global too.
Working Paper 65 (pdf) addresses the proposed United Nations Framework Convention on International Tax Cooperation. It must remain consistent with ICAO’s established residency-based approach to airline taxation.
Taxing airlines where they are headquartered has served governments and industry well, avoiding double taxation. Moving to source-based taxation would add administrative complexity and costs without making flying more affordable. Governments anticipating additional revenue from foreign airlines must consider what their own carriers would pay elsewhere.
In a fragmenting world, ICAO brings governments and industry together not simply to debate priorities, but to agree global standards and policies. That is multilateralism with practical purpose. The Air Transport Conference should aim to reinforce aviation’s ability to connect people, support economic development, and build resilience. That is how, together, we can expand connectivity’s benefits for everyone.
