Thank you for joining this call as we are about to begin the 40th Assembly of the International Civil Aviation Organization, ICAO.
As you know, ICAO is the United Nations body that sets the standards that have enabled international aviation to develop over the last 75 years. IATA has had a strong partnership with ICAO over that period. Although the ICAO Assembly is a meeting of governments, IATA as a permanent observer, is contributing some 22 working papers to this Assembly’s agenda.
You will hopefully have seen our just published press release, so I am sure that you have a good idea of some of our key objectives. I won’t go over each in detail, but before we open the line for questions, I would like to highlight a few key points.
The first is to provide some context to the current state of the air transport industry.
Slowing demand and rising costs are putting pressure on the industry’s financial performance. We expect airlines to post earnings of $28 billion this year—down from $30 billion in 2018. That translates to a net profit margin of 3.2%.
On the cost side, the uncertainty in global oil markets is obviously something that we are keeping an eye on.
Demand is softening. The big story is cargo. Demand contracted by 3.2% in July this year compared to July 2018. This is the impact of trade tensions. As we have said repeatedly, nobody wins a trade war. We all prosper with borders that are open to people and to trade.
Aviation is a major contributor to the global economy—supporting $2.7 trillion in economic activity and 65.5 million jobs globally. And the importance of aviation to development is reflected in aviation’s direct links to 15 of the UN’s 17 Sustainable Development Goals.
Aviation is the business of freedom. It drives economies and improves peoples’ lives. But as with any human activity there is an environmental cost. Aviation contributes 2% of global carbon emissions. This contribution is in the public spotlight and will be a major focus of this ICAO Assembly.
Today the average journey by air emits 50% less carbon than it did in 1990. That’s because airlines have been working hard to improve environmental performance. But with efficiency gains, flying is becoming more accessible. The industry is growing, and so is our carbon footprint—although at a slower pace than the industry’s expansion.
The aviation industry set a target to stop the growth in emissions from 2020. To achieve that, we needed a global economic measure to supplement what we are able to achieve through technology.
That is why the last ICAO Assembly’s agreement, in 2016, on the Carbon Offsetting and Reduction Scheme for International Aviation or CORSIA was so important.
Combined with the other measures that we are taking, CORSIA will enable us to cap aviation’s emissions from a 2020 baseline. That is an important commitment that we must keep. And a key message to governments at this Assembly urges them to make CORSIA deliver as intended.
Success means an effective global scheme that is the single market-based measure to help manage aviation’s carbon footprint. And that success is in danger of being undermined by states that are piling so-called green taxes on travelers. These may improve government budgets in the short term, but they do nothing to improve aviation’s environmental performance.
The aviation industry is serious about sustainability. And supporting our efforts requires governments to be equally focused on meaningful measures.
This past week has seen inspiring public expressions of hope for a sustainable future—particularly from young people. In some parts of the world we are hearing calls to dramatically reduce or even to stop flying.
Flying is not the enemy. Connecting people globally is a great achievement that makes our world a better place. The enemy is carbon. And long before this week’s demonstrations we have been working to cut carbon.
As I mentioned earlier, the average passenger journey today emits half the carbon it did in 1990. That’s proof of our commitment. And we will do even more.
Our long-term goal is to cut total emissions to half 2005 levels by 2050.
There is amazing work being done on radical new aircraft and engine designs, including electric aircraft, and technology is available to optimize air traffic management.
Right now, the biggest and most immediate opportunity is sustainable aviation fuels, which could cut aviation’s carbon footprint by up to 80%.
The industry has invested in sustainable aviation fuels. Thousands of flights have been safely powered by them. But they are still too expensive and in short supply. That’s why we need governments to take critical policy measures that will promote sustainable aviation fuels.
Bringing the right policy support to an industry with a history of technical innovation is the key to achieving the sustainable future that we all want.
While environment will be a main focus for the Assembly, it is not the only issue. Among the many agenda items, we will also be asking governments to work with industry towards:
- The safe integration of drones into airspace management with consistent global standards
- The establishment of a globally-consistent approach to passengers with disabilities,
- Reducing the vulnerability of global navigation satellite systems to harmful interference.
- Improving the handling of unruly passengers by ratifying the Montreal Protocol 2014
And, with our partners at Airports Council International, we are driving our joint One ID initiative. By using modern identity management technology and biometric identification, we can streamline the airport experience.
Today passengers are asked to show various documents multiple times before they get to their plane. The technology exists to enable passengers to move from curb to gate using a single paperless biometric token. To take advantage of that technology, we are asking governments to agree to the global standards that could make this a reality.
On that very optimistic note, I will end my remarks and open the line to your questions.