Message by Tony Tyler, Director General & CEO
As we enter the fourth quarter of the year it seems clear that 2013 will see industry profits growing—although not as quickly as previously projected. We now expect airlines to generate a combined net profit of some $11.7 billion this year; growing to $16.4 billion in 2014. As absolute numbers these are impressive results; however even with the strengthened profits next year will still only yield a 2.2% net margin.
The slump in the air cargo industry is weighing heavily on profitability. Cargo revenues peaked at $67 billion in 2011. This year we expect no more than $59 billion. Shippers are finding cheaper options than air cargo to feed their supply chains and to deliver products to market. To meet this and other challenges, we need to improve air cargo’s competitiveness. It is a clarion call for two of our top cargo initiatives—e-freight to bolster efficiency and Cargo 2000 to ensure quality.
Major progress was achieved on many fronts at the 38th ICAO Assembly which concluded earlier this month. The biggest news was an historic agreement by governments to develop a global market based measure to help manage aviation’s carbon emissions by the next Assembly in 2016. With a few minor exceptions, the Assembly’s resolution aligns well with our own AGM resolution.
Turning the ICAO resolution into a real mechanism by 2016 will require states to work together as trusting and committed partners. Unfortunately, the 16 October announcement that the EC intends to revive plans to include international aviation in its emissions trading scheme (albeit limited to the portion of those flights within its borders) puts that at risk. We are encouraging Europe to examine thoroughly the potential consequences of pressing ahead in consultations that include international stakeholders.
Rest assured that on these and other issues your association is committed to delivering value to your business.