Buenos Aires - The International Air Transport Association (IATA) highlighted opportunities for greater cooperation to meet unprecedented challenges in Argentina’s air transport sector.

”The global situation of the air transport sector is a disaster,” said Giovanni Bisignani, IATA’s Director General and CEO in a speech to JURCA, the association of airlines operating in Argentina. “With industry revenues forecast to fall by 15%, the situation is far more severe than after September 11 when the shock to industry revenues was a 7% fall. Total industry revenues are expected to fall from US$528 billion last year to US$448 billion in 2009. The industry has never faced a bigger financial challenge,” said Bisignani.

IATA estimates that airlines lost US$10.4 billion in 2008 and will lose a further US$9.0 billion in 2009. Global passenger demand was down 7.2% in June, compared to the same month in 2008. In the same month, the number of premium travelers fell 21.3% compared to previous year levels. Both of these represent slight improvements on May figures which were -9.3% for passenger demand and -23.6% for premium travelers. Deep discounting to stimulate demand has amplified the impact of revenues which are falling by as much as 30% in international markets.

Bisignani noted that June cargo figures were down 16.5%, relatively stable with the -17.4% recorded in May and a slight improvement on the performance for December 2008 to March 2009 when cargo demand hovered below -20%.

“We may have reached the bottom in terms of demand. But we have yet to see significant signs of recovery. The industry is in survival mode. Conserving cash, reducing costs and managing capacity are critical,” said Bisignani.

Bisignani also noted that Latin American carriers are outperforming the market with passenger demand down by 4.7% and cargo by 14.2%. The region is still being impacted by weakened confidence in travel as a result of H1N1 fears and heavy discounting is taking its toll on both revenues and profits for the region’s carriers.

“Argentina faces these challenges while the economy is still paying for the debt crisis of 2001. Over 8% of Argentina’s economy and 1.7 million Argentine jobs depend on air transport. I am pleased to see that the government has made a competitive air transport sector an important pillar of national economic policy,” said Bisignani, noting successful meetings with President Christina Fernandez de Kirchner, Minister of Federal Planning Julio De Vido, Secretary of Transportation Juan Pablo Schiavi, and President and CEO of AA2000 Ernesto Gutierrez.

In 2008, IATA worked with local authorities to improve the competitiveness of Argentina’s airports with a 30% discount on airline charges. ANAC, the regulator has also been changed to a civilian organization. “These are major steps in the right direction and create opportunities to further improve the competitiveness of Argentina’s aviation sector. Working together is the key to success in further enhancing Argentina’s competitiveness in air transport,” said Bisignani.

Following the decision to stabilize air services by re-nationalizing Aerolineas Argentinas, IATA agreed to work as a consultant with the Government of Argentina. “We will help in efforts to put Aerolineas Argentinas back on its feet by re-building competitiveness so that it can compete in an open market,” said Bisignani.

“Times have never been tougher for air transport. IATA is here as a partner with global perspective and experience. Argentina is a great example of what can be achieved by working together. The discount agreement between ORSNA, AA2000 and the airlines has addressed major infrastructure problems. We are pleased to broaden our cooperation to act as a consultant to the Government of Argentina. By addressing issues transparently with the cooperation of industry and government, I am confident that we can build a stronger Argentine aviation sector that is greener, safer and profitable,” said Bisignani.

View Giovanni Bisignani's full speech

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.

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