annual report 2008 International Air Transport Association

IATA Board of Governors 06 Environment 32 Director General’s Message 08 Cost-efficiency 38 The State of the Industry 10 Industry and Financial 42 Services Simplifying the Business 16 Aviation Solutions 48 Safety 22 IATA Membership 50 Security 26 IATA Worldwide 52 Regulatory and Public Policy 30

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IATA Board of Governors as at 1 May 2008

Khalid Abdullah Almolhem Enrique Cueto Liu Shaoyong SAUDI ARABIAN AIRLINES LAN AIRLINES CHINA SOUTHERN AIRLINES

Richard Anderson Geoff Dixon Samer A. Majali DELTA AIR LINES QANTAS ROYAL JORDANIAN

Gerard Arpey Christoph Franz Wolfgang Mayrhuber AMERICAN AIRLINES SWISS LUFTHANSA

Sanjay Bhuckory Peter Hartman Titus Naikuni AIR MAURITIUS KLM KENYA AIRWAYS

Montie Brewer Pedro Heilbron Valery M. Okulov AIR CANADA COPA AIRLINES AEROFLOT

David Bronczek Idris Jala Fernando Pinto FEDEX EXPRESS MALAYSIA AIRLINES TAP PORTUGAL

Chew Choon Seng Temel Kotil SINGAPORE AIRLINES TURKISH AIRLINES

Fernando Conte IBERIA 7

Jean-Cyril Spinetta AIR FRANCE

Douglas Steenland NORTHWEST AIRLINES

Glenn F. Tilton UNITED AIRLINES

Tony Tyler CATHAY PACIFIC

Willie Walsh BRITISH AIRWAYS 8

Director General’s Message Airlines returned a global profit of US$5.6 billion in 2007. This is less than a 2% margin on revenues exceeding US$490 billion. But for airlines, it was a good year. An average price of oil at US$73 per barrel for 2007 resulted in an industry fuel bill of US$136 billion—fully 29% of operating costs.

Only a few years ago survival with Industry profitability in 2008 will be hit costs have been cut by US$3 billion. the price of fuel at these levels was hard. This is the lion’s share of the US$6.5 impossible. A strong economy combined billion cost savings that we will achieve Change is the only way forward. IATA with enormous efficiency gains to help with Simplifying the Business. is taking a leadership role in re-shaping airlines improve the bottom line—even the industry. Our biggest successes are We are now starting the next phase. as fuel costs skyrocketed. Labour efficiency and safety—where airlines have IATA’s Fast Travel initiative will tie productivity improved 64% since 2001. the greatest freedom to manoeuvre. together the technology elements of bar Non-fuel unit costs dropped by 18%. coded boarding passes, e-ticketing and Simplifying the Business is a winner. The widening impact of the US credit common use self-service kiosks into a On 31 May 2008 we made paper tickets crunch is making a tough business even new process for travel. Our Baggage- a part of our history. E-ticketing is a tougher. The industry cycle peaked in management Improvement Programme reality from the smallest and most remote 2007—with just one year of profit—and (BIP) will improve this important function airports to our biggest hubs. Passengers the price of fuel is still rising. at airports around the world. enjoy the convenience while industry IATA is also changing the freight world. Successful e-freight projects are operating in six locations around the world—Canada, Hong Kong, The Netherlands, Singapore, Sweden and the United Kingdom. In 2008 a further 8 locations will join the programme. IATA’s safety programmes are delivering results. As an industry, we carried 2.25 billion people safely last year. The 2007 industry accident rate for Western-built jets was 0.75 hull losses 9

per million flights. IATA carriers did better demonstrating that cost pressures are cyclical business. But we could do a with 0.68 hull losses per million flights. unrelenting. IATA continues to fight for lot better at managing the cycles if we efficiency with individual airports and had access to some basic commercial Our commitment to safety is strong and air navigation service providers. But it is freedoms that other businesses take for IATA’s focus is on constant improvement. a government responsibility to protect granted. Airlines need the freedom to The IATA Operational Safety Audit consumers from monopolies abusing serve markets where they exist, the ability (IOSA) is a condition of membership. their market power. Effective economic to access global capital markets and to By the end of this year all carriers must regulation is the only long-term solution merge or consolidate where it makes be on the IOSA registry, or they are to bring commercial discipline to our business sense—even across borders. out of IATA. All of the membership has monopoly suppliers. been audited. Our Partnership for Safety After six decades of the bilateral system, programmes are providing assistance IATA is leading industry action on it is time for airlines to become a normal where help is needed most to keep all of the environment. The IATA four-pillar business. The US-EU agreement on our members on board. strategy to address climate change is Open Skies has created important new delivering results. In 2007 IATA’s fuel commercial opportunities in our largest Change is needed everywhere. That savings campaign saved 10.5 million market. And we can see pockets of includes our industry partners and tonnes of CO and US$2.1 billion in liberalisation in all parts of the world. But governments. 2 costs. More importantly, IATA’s strategy nobody has yet effectively addressed Progress on security has been is now an industry commitment. In April the issue of ownership that is tied to the disappointing. The common approach 2008, airlines, manufacturers, airports, antiquated bilateral system. This must to liquids and gels has not transferred and air navigation service providers change. into mutual recognition of standards signed a declaration supporting IATA is challenging governments across borders. Costs have increased investment in technology, effective flight around the world to deliver on their to US$5.9 billion annually. Our operations, efficient infrastructure and responsibilities—to ensure the highest passengers continue to be hassled positive economic measures. levels of safety and security, to set a level because governments are not talking We are challenging governments to playing field that encourages efficiency with each other. In some cases they are match our efforts to achieve carbon across the value chain and to deliver not even coordinating internally. IATA is neutral growth on the way to a carbon- effective global policy on the global issue ramping up its security activities to more free future. It is their responsibility to take of climate change. After that, we are effectively challenge governments to leadership by supporting basic research, sending a message—loud and clear— deliver convenience and effectiveness ensuring that air traffic management that governments must get out of the with technology. is efficient, and developing a global way and let us get on with business. The IATA cost campaign achieved emissions trading scheme that is fair and We are a great industry built by turning record savings in 2007—US$3.7 voluntary. dreams into reality. Today, airlines billion. But this was offset by Finally, as the financial situation of the are the heart of a value chain that cost increases of US$2.9 billion, industry changes rapidly around us, one supports 32 million jobs and US$3.5 further fundamental change is becoming trillion in economic activity. By working absolutely obvious. together—side-by-side with our member airlines—I am confident that we will meet Liberalisation is critical. The industry our challenges to build an even brighter suffers a constant cycle of boom and future. bust. This time the “recovery” ended with very little money in the bank and US$190 billion in debt. Airlines will always be a

Giovanni Bisignani Director General & CEO 10

The State of the Industry

Most passenger markets grew Strong long-haul business Air cargo markets continued robustly in 2007 boosted by travel was a key source of to grow by less than world strong economic growth revenue growth trade In most markets, 2007 was a good year Business travel continued to expand Air freight has been disappointingly weak for growth in the passenger segment at a robust pace until the end of 2007, in the past two years, 2006 and 2007, in following three years of better-than- which has been particularly important spite of booming world economic growth average traffic growth. The industry is in boosting the revenues and profits and trade. For airlines in regions such as closely linked to the economic cycle, and of network airlines. The number of the Asia-Pacific, where freight has been since the past four years have seen the passengers travelling in business and a significant proportion of revenues, this strongest world economic growth for first class grew faster than the number weakness has weighed on profitability. 30 years the strength of air travel is not flying economy in long-haul markets, As in business travel, there was also a surprising. The outlook is unfortunately whereas passenger numbers for premium slowdown in air freight growth in the not so positive, as the US economy travel shrank sharply in short-haul second half of 2007. heads into, or close to, recession. European markets and grew only slowly The weakness in the growth of air freight in short-haul markets elsewhere. The International scheduled passenger traffic relative to the strong growth of trade in strength of long-haul business travel growth stabilised during 2007 at 7.2%, manufactured goods was partly the result meant that premium revenues continued from 7.6% the previous year. Demand of key customer industries, such as the to expand at a considerably faster was boosted by stronger economic semiconductor industry, experiencing pace than overall premium passenger growth in Asia and Europe. The US sluggish growth in shipments as their numbers. domestic passenger market shrank, but end customers use up inventories of that was a result of restructuring, which previously supplied components. But reduced capacity in domestic markets in some markets, there was also a loss and shifted some of it to international of market share to alternative transport markets. Elsewhere, domestic modes, such as containerised ocean passenger markets in India and China and road freight. For much of 2006 expanded quickly under the influence of and 2007, the cost of residual fuel oil liberalisation and rapid economic growth. for ships rose by much less than for jet Total revenue passenger kilometres fuel. As a result, ocean freight rates fell increased 5.3% in 2007, which is close relative to air freight rates, reducing the to the trend growth rate experienced in competitiveness of airlines. That gap the past 20 years. in fuel costs, however, closed in the second half of 2007, which may assist air freight in regaining some market share on markets where it has previously been lost.

Passenger traffic growth vs. GDP Business vs. economy on long-haul Air freight growth vs. world trade in growth 1997–2007 and short-haul markets in 2007 manufactures 1997–2007 11

Capacity growth constrained Rise in load factors and yields Another year of above- by production bottlenecks strengthened unit revenues trend growth in revenues and profits focus Key to the improvement in airline Restrained capacity growth set against Airline revenues expanded well above profitability in 2007 was that scheduled strong growth in passenger demand average, at 7.1% in 2007, for the fourth capacity grew at a slower pace than led to a sharp rise in load factors, consecutive year, allowing much of the traffic—5.2% versus the 5.6% expansion particularly in the US domestic market, unprecedented rise in fuel costs to be in passenger and cargo tonne kilometres. where restructuring led to a reduction absorbed. The combination, though, of This successful improvement in utilisation in capacity. Load factors in domestic exceptional economic growth and rising partly reflects the constraints on new markets worldwide have caught up with load factors looks unlikely to be repeated aircraft deliveries that resulted from the utilisation of aircraft in international over the next 12 months. production bottlenecks at Boeing markets, at 76.3% versus 76.6%, and Airbus. It also is the result of an respectively. Airlines have managed intensified focus on profitability rather to raise their average passenger load than market share, driven by spreading factors more than 7 percentage points market liberalisation and the imperative of since 2001 thus using their assets more responding to soaring fuel costs. productively. Yields also rose, around 1.7%, reflecting tighter supply-demand conditions. However, allowing for general inflation and for the fall in the US dollar, this indicates that pricing power in air travel markets remains weak.

Growth in capacity vs. passenger Load factors and unit revenues Revenue growth vs. GDP growth traffic 1997–2007 1997–2007 1997–2007 12

Fuel prices hit record highs as Record fuel bill boosts fuel Shortages raising the price OPEC tightens its grip on oil efficiency and orders for of labour markets new aircraft Fuel costs, which have absorbed much Airlines had some success in using The extended economic boom was good of the boom in revenues in the past fuel hedges to manage fuel cost risk in news for revenues, but it has driven few years, showed no signs of falling 2007. Fuel hedging levels were around up costs. Fuel-efficient aircraft are in back during 2007. Oil prices started 60%. Outside the United States, some short supply, and lease rates have risen. the year close to US$50 a barrel and airlines benefited from the fall in the US Unemployment is at a 20-year low in the rose erratically through the year to dollar. The industry’s fuel bill nevertheless OECD and some developing nations. hit US$100 a barrel. Jet fuel prices surged amid rising fuel prices, to Pilots and engineers are in short supply, continued to move within a premium of US$136 billion, or 29% of operating and wage inflation is rising as a result. US$17 to US$20 a barrel above crude costs. In response, airlines have been Slower economic growth may stem oil, averaging US$90 a barrel. This improving operations and ordering input price inflation, but for 2008 at least represented a 10% rise over the previous new aircraft to raise fuel efficiency. further efficiencies will be key to any year and was more than three times the Improvements in technology and reduction in non-fuel unit costs. level of five years earlier. operations lowered the amount of fuel used to fly a passenger kilometre 2.2% Early in May 2008, oil prices hit yet during 2007. higher levels, of US$120 a barrel Brent, and jet fuel rose to over US$140 a barrel, despite increasing gloom about the US economy. Whereas the US economy appears to be sliding towards recession, Asian economies continue to expand, heightening Asian energy demand while OPEC successfully Fuel bill in billions of US dollars and restrains supply, forcing oil prices higher. as percentage of operating costs 1997–2007

Jet fuel and crude oil price Fuel efficiency and new aircraft orders OECD unemployment rate and wage 2002–2007 1997–2007 inflation 13

Efficiency improvements reach Profitability rises substantially Return on capital remains new highs during 2007 far too low

Improved efficiency has been a In many ways, the improvement in Despite improving profitability, post-tax significant success for the airline industry. profitability seen in 2007 has been operating profits delivered only a 4.2% From 2001 to 2007, labour efficiency remarkable. Three years ago, few return on invested capital for the industry has improved 64% and fuel efficiency analysts would have predicted profits in 2007 compared with its cost of capital has risen 19%. This has produced an with jet fuel prices averaging US$90 of 7%-8%. For an industry with almost 18% decline in non-fuel unit costs and a barrel. Strong revenues, restrained US$600 billion of invested capital, this played a major role in the improvement capacity growth, and efficiency return is still far too low for long-run of profitability in spite of the rise in fuel improvements have been the keys to this financial sustainability. costs. success. Improvement has been marked in the United States, where operating profitability recovered to just under 6% of revenues in 2007. Europe also saw further improvement, to 4%. On average, airlines in the Asia-Pacific region did not do so well, with a margin just under 1% on pure airline business. Some airlines in the region, however, were among the world’s best performers. Asia-Pacific airlines, moreover, generated significant profit from their non-airline assets in 2007, which significantly boosted corporate-wide results.

Labour, aircraft efficiency and non-fuel Regional operating profit margins unit costs 1997–2007 14

Outlook for 2008 clouded by US economy weakening and Robust Asian and Middle the perfect storm damaging trading partners Eastern markets provide some offset The revenues of the airline industry are The collapse in the US housing market The economic cycle, however, is closely linked to the economic cycle. late in 2007, and the sub-prime crisis different today than in 2001. Europe Aircraft ordered at the peak of the it generated, continues to reverberate may prove unable to decouple from the cycle are due to be delivered while the throughout the global financial system. US downturn. Fortunately, China and industry’s costs are dominated by the The rescue of Bear Stearns in the United other nations in Asia and in the Middle price of jet fuel. All three are moving in States and of Northern Rock in the East look set to be able to continue the wrong direction for profitability in United Kingdom is perhaps the tip of their investment and liberalisation-driven 2008. the iceberg in the damage that has been expansion. While forecasts for economic done to lending institutions’ balance growth in the US have been reduced

sheets. As a result of the problems, sharply over the past year, the outlook credit conditions have tightened sharply for growth in China, the Middle East, and in the US and in Europe, making Latin America has improved. This should credit hard to obtain for borrowers provide travel and cargo markets of with less than investment-grade credit strength to offset some of the impact of ratings. Consumers have also been hit. the US downturn. Consumer confidence in the US slumped in December and by March was at its lowest level since the recession of 2001.

US consumer confidence vs. jet fuel US interest rates vs. tightening bank Forecasts for economic growth prices 2000–2008 credit conditions 1997–2008 in 2008 15

New aircraft deliveries and Fuel prices expected to Profitability will fall sharply in liberalisation will put downward remain high 2008 pressure on yields Adding to the downward pressures on A new record in oil markets was set in Even with significant further efficiency revenue growth from the US recession early May 2008 when spot prices for improvements by airlines, there will be will be the acceleration in aircraft Brent crude oil rose above US$120 little chance of offsetting the damage deliveries in 2008 and 2009. More a barrel. Futures markets predict that to profitability from the headwinds of aircraft will be parked or scrapped as crude oil prices will remain above US recession and record fuel prices. a result of high fuel prices. And unless US$100 a barrel for the next 12-18 A significant decline in global airline more than a quarter of deliveries are months, although most forecasters profitability, or even losses, look replacement, excess capacity will expect a greater decline. Although the inevitable in 2008. develop in some markets, putting US economy has weakened, growing oil downward pressure on yields. Increased demand from China and elsewhere has liberalisation across the Atlantic and collided with oil supply problems and in Asia and the Middle East will create with firm OPEC control of its cartel. Oil many new opportunities. Unfortunately, and jet fuel prices are thus set to remain at a time of cyclical weakness it will high throughout the year ahead as a also intensify competition and squeeze result. profitability.

Aircraft deliveries vs. traffic growth Brent crude oil price 1990–2008 16

Simplifying the Business The conversion to 100% electronic ticketing (ET) on 1 June 2008 marks the dawn of a new era of air travel characterised by improved efficiency, added convenience, and more options for passengers.

IATA’s Simplifying the Business programme continues to lead the way with initiatives that improve service and strip out costs. The self-service-oriented Fast Travel programme and Baggage- management Improvement Programme will feature prominently in the next phase of Simplifying the Business.

We started Simplifying the Business in 2004 to save US$6.5 billion in costs and make travel more convenient. The first target was 100% ET and many thought this was impossible. Now paper tickets belong in a museum! Giovanni Bisignani 17

E-ticketing

Attaining 100% electronic ticketing in ET penetration globally reached 92% These were used by over 200 four years is a historic milestone that at the end of 2007, up from 74% at the airlines. For airlines needing additional illustrates the value of a coordinated beginning of the year. support, IATA maintained its ET Buddy industry approach. When the project programme, which provides expert As of 1 June 2008, airlines and launched in June 2004, only 19% of consultation free of charge and now passengers are reaping the benefits tickets issued globally were electronic. benefits 63 airlines. of 100% ET. Service is improving. Passengers are no longer required Despite this IATA support, it became to collect original tickets from travel clear that airlines would not reach agencies. Last-minute itinerary changes a sufficiently high level of ET and are easy to make and the potential for particularly Interline ET capability by the lost tickets is gone forever. Airline yield end of 2007. As a result, a five-month, management is also improving. Ticketing one-time extension was granted at the costs are dropping. And the elimination AGM in Vancouver in June 2007 that of paper tickets will save US$3 billion proved adequate for the industry to annually. deliver 100% ET.

Formula for success Next steps The success of ET is the result of a clear Although paper tickets have been mandate from the Board of Governors purged from IATA’s billing and settlement and Annual General Meeting (AGM), plans (BSP), some issues must still a definitive target, and a coordinated be addressed. Increasing Interline ET industry approach supported by a agreements and ensuring all passenger dedicated IATA programme team of 150 types, including infants, can be easily members. In 2007, IATA also supported ticketed are but two examples. IATA Interline ET by automating the lengthy will continue to encourage and to help process of mapping interline ticketing airlines overcome these last remaining business requirements with the General hurdles. Business Requirement (GBR) Generator With paper tickets removed, IATA will online tool and by providing Interline ET press forward with plans to eliminate all Matchmaker services. other miscellaneous paper documents and the costly processes that support them. Accordingly, IATA will define a strategy to achieve a 100% paperless environment, including finalising standards to support electronic miscellaneous transactions.

ET penetration in BSP by home region (Mar 2008) - 94% 18

IATA e-freight

Air cargo is at the heart of the global IATA is also cultivating wider industry for the passenger, from booking to economy. About 35% of the value of engagement by assessing 46 further check-in to boarding. goods traded internationally is shipped locations for the potential implementation IATA continues to promote its industry by air. With revenues exceeding US$50 of e-freight. The aim is to implement standard for 2-D bar codes through billion, or 12% of overall industry e-freight where feasible by the end of workshops, an implementation guide, revenues, air cargo is an integral part 2010. To this end, the goal for 2008 is ongoing engagement, and site visits. of an airline industry that is changing to complete all standards and to add 8 The ATB2 standard (defining magnetic fast. Simplifying air cargo processes locations to the existing 6 by the end of stripes for boarding passes) now has and freeing them of paper will improve the year. As of April 2008, 25 airlines a sunset date of 2010. IATA’s standard service, cut shipment times, improve and 13 forwarders participated in MIP by also makes BCBP available on the ET transparency, speed processing through providing detailed performance reports. Itinerary Receipt. customs, and save an estimated US$1.2 billion annually. In June 2006, the IATA Board set an interim target of year-end 2008 for E-freight relies on involvement and Bar-coded boarding passes airlines to issue BCBP to speed up the support throughout the cargo supply transition to BCBP and a 2010 deadline chain, including government. IATA has (BCBP) for full BCBP implementation. There were laid a solid foundation for simplification BCBP complement e-ticketing by fully 101 BCBP-capable airlines at the with broad and effective industry and enabling a variety of passenger services. end of 2007, exceeding the target of 80. government participation. Processes Self-printed BCBP allow passengers to As of the end of April 2008, there were and standards have been developed, bypass airport queues. Passengers can 120 BCBP-capable airlines. and in 2007 IATA launched e-freight in check-in and print their boarding passes six locations that had the right business, on-line at home or at the office. Thanks As the 2010 deadline for 100% BCBP technical, and legal environments to the greater data storage capacity of approaches, IATA will shift focus to to operate e-freight pilot projects: the IATA two-dimensional (2-D) standard ensure that the equipment at airports Canada, Hong Kong SAR, the United bar code versus non-standard, one- can handle BCPB and will engage Kingdom, the Netherlands, Sweden, and dimensional (1-D) bar codes, passengers approximately 2,500 airports to ensure Singapore. In each location, the customs can travel with just one boarding that their equipment is BCBP capable. organisations; key cargo carriers (Air document, even for multi-segment IATA launched the BCBP Matchmaker Canada, Cathay Pacific, British Airways, itineraries. in February 2008 to support airport KLM, Martinair, SAS, and Singapore engagement, to facilitate communication Airlines, respectively); and freight BCBP also cut costs by replacing between airlines and airports, and to forwarders signed up to demonstrate the expensive magnetic-stripe boarding report on progress. benefits and to develop standards for passes. In total, the BCBP project will other countries to follow. provide annual industry savings of over US$500 million. For e-freight to work, timely, quality BCBP airline capability electronic data interchange (EDI) is More importantly, IATA’s creation of necessary. Currently, 60% of electronic a BCBP standard for use in mobile data passed between freight forwarders devices in 2007 will allow passengers and airlines is not accurate or is missing. to use their mobile phones to receive IATA’s Message Improvement Programme their boarding passes. Mobile BCBP (MIP) was launched in 2007 to improve introduce a fully paperless experience the accuracy and reach of electronic data for the air waybill and house manifest. IATA will coordinate efforts under the Cargo 2000 initiative to develop common industry processes and standards for e-freight and MIP. 19

Common-use self-service check-in (CUSS)

When given the choice, many passengers prefer to take control of their travel experience. CUSS enables passengers to check-in on any number of airlines using one kiosk. The ability to check-in faster and at any time is among the most highly rated self-service advantages according to passengers polled in IATA’s 2008 Corporate Air Travel Survey. With CUSS, airlines benefit from economies of scale by sharing and cost-effectively deploying kiosks at small airports. CUSS saves an average of US$2.50 per check-in from a traditional check-in desk and has the potential to save the industry US$1 billion. As more airports realise the benefits of CUSS, IATA is engaging airlines and airports to raise awareness of this tool through regular workshops, consultations, and on-line tools. IATA plans to accelerate the implementation of CUSS technology and to facilitate the launch of CUSS at a total of 130 airports by end of 2008. At the end of April 2008, 91 airports were operating CUSS.

CUSS implementations 20

Radio frequency identification (RFID)

RFID can be used as a way to improve a IATA delivered an RFID transition plan IATA will conduct a trial using RFID for range of airline business processes while in 2007 that detailed the benefits that in-flight services in 2008 to validate cutting costs. IATA has developed a could be derived by implementing RFID savings estimates of US$80 million per standard for RFID baggage tags and has for baggage management over a six- year. It also will continue to support the recommended practices and business year period. The US$200 million saving industry through recommended practices cases for the use of RFID in baggage identified was insufficient to drive an and working groups. and in-flight equipment management. industry-wide mandate. RFID instead becomes an integral part of a broader baggage improvement programme. Additionally, IATA has identified opportunities for the RFID management of aircraft parts and unit loading devices (ULDs) and reduction of aircraft turnaround times by up to 7% by speeding the loading process, reducing documentation, and providing more- accurate flight status information. 21

Baggage-management improvement programme (BIP) Fast travel

Results of research conducted during from 1.5 days in 2006 to 1.64 days in With 100% ET delivered, the stage has the RFID project showed the technology 2007. Baggage mishandling costs the been set for the next phase of Simplifying will rectify only 20% of baggage industry over US$3.8 billion each year. the Business. Fast Travel responds mishandlings. To more effectively stem That amount will grow to at least US$4.5 to increasing passenger demands for the surge in baggage mishandling billion by 2011. Importantly, customer self-service by building on the platform rates caused by growing volumes and service and the industry’s reputation are provided by CUSS, BCBP, and 100% heightened security measures, IATA suffering. ET. The vision is to offer full service to launched BIP in December 2007. passengers through a range of self- BIP will provide volunteer stakeholders service options, from reservations to Some 42 million pieces of luggage did with a toolkit of 40 solutions designed arrival. not arrive with passengers during 2007. to address the prime causes of baggage Further, the time required for a passenger mishandling. These include tools that IATA has identified six key areas of focus: to recover a mishandled bag increased help airlines and airports integrate >>Check-in: using the Internet, CUSS systems; conduct training; improve and mobile phones baggage tag read rates; ensure baggage message availability; and increase >>Bags ready-to-go: taking advantage passenger awareness of the value of of baggage self-tagging and common checking baggage in early, attaching bag drop-off points proper labels, and distributing weight >>Document scanning: creating evenly within a bag. Because every a self-service option for routine airport is different, IATA Baggage Go documentation validation Teams will visit targeted airports to spread best practice solutions matched >>Flight re-booking: helping passengers to local needs. organise onward travel and issue new boarding passes In 2008, IATA will launch BIP at six airports and among six airlines. >>Self-boarding: supporting cost- effective passenger self-boarding on a global basis. >>Bag recovery: facilitating self-service baggage mishandling reports.

In 2008, IATA will set up two pilot projects for each area with the ultimate objective of developing industry-wide standards and processes. 22

Safety Air transport is the safest way to travel with 0.75 accidents per million flights in 2007. However, continued vigilance and the implementation of global industry safety programmes are needed to improve safety and further reduce accident rates.

IATA Operational Safety Audit Although the accident rate rose slightly The IATA Operational Safety Audit IOSA is also a condition of IATA in 2007, to 0.75 from a rate of 0.65 (IOSA) is an important element of IATA’s membership, with aggressive targets and in 2006, fatalities and the fatality rate Six-Point Safety Programme. That strict deadlines. IATA’s member airlines continued to decline. In North America programme offers a systematic approach are committed to IOSA, with all but three and Europe, accident rates dropped, but to safety that includes specific actions meeting the year-end 2007 deadline to accidents in Brazil, Indonesia, and Africa on safety auditing, infrastructure safety, undergo the audit. Those airlines that pushed up the global average. Runway data management and analysis, safety did not meet the deadline had their excursions, ground damage, and gear-up management systems, flying operations, memberships revoked. By the end of landings were among the top reasons and cargo safety. 2008, all member airlines will either be for accidents. IATA members surpassed on the registry or out of IATA. IATA’s goal IOSA is an internationally recognised the industry with an accident rate of only is not to reduce its membership but to audit that is open to all airlines and that 0.68 Western-built jet hull losses per improve safety. And effective 1 January assesses the operational management million flights in 2007. 2008, IATA covers the fees related to and control systems of an airline. renewal audits for its member airlines. As a globally accepted standard, IOSA raises the bar on airline operational safety IOSA programme status as of management. end-April 2008 23

IOSA delivers cost savings and efficiency Regulatory authorities are also using jurisdictions. These include the Arab gains to airlines while enhancing IOSA to enhance or complement their Civil Aviation Commission (ACAC) in safety. With IOSA, airlines are able oversight functions since IOSA standards conjunction with all of its member states to share information through the IOSA are harmonised with International Civil and Brazil, Chile, Costa Rica, Egypt, Audit Report, eliminating the need for Aviation Organization (ICAO) annexes Madagascar, Mexico, Panama, and duplicative audits. Since IOSA’s launch and industry best practices. Regulatory Turkey. in 2003, some 800 IOSA Audit Report authorities obtain valuable information requests have been completed, leading from IOSA Audit Reports to evaluate to over US$47 million in savings. IOSA local or foreign airlines wishing to fly Audit Reports also facilitate business within their jurisdictions. arrangements, such as code sharing. Some countries are already actively Every aspect of IOSA is continually using IOSA audit data, and others evaluated and monitored, from the have mandated IOSA for airlines in organisations conducting the audits to their jurisdictions and flying into their the quality control of the final IOSA Audit Report and the management of IOSA In the last 10 years we cut the processes overall. This has resulted in accident rate almost in half. But the renewal of IOSA’s quality registration our goal is always to do better: under the provisions of ISO 9001:2000. zero accidents and zero fatalities. Making IOSA a condition of IATA membership is a strong commitment by the industry to raise the bar on safety even higher. Giovanni Bisignani 24

Partnership for Safety

Regional differences in safety levels These are accompanied by a uniform conducting workshops around the world continue to be a cause for concern. set of standards tailored to the specific to build in-depth knowledge of safety While safety improved in Russia, Nigeria, activities of any ground handler. As a and quality management. North America, and Europe in 2007, result, the ISAGO audit can be applied accidents in Brazil, Indonesia, and Africa consistently to any type of ground drove up regional hull loss rates. handling company worldwide. IATA Training and Qualification IATA has responded with targeted Following the drafting of the standards, programmes to help close regional 13 trial audits were completed to assess Initiative (ITQI) gaps. Partnership for Safety (PfS) was the auditability of ISAGO standards. Global traffic growth brings challenges introduced in 2005 to help airlines in In parallel, the IATA Training and including the availability of qualified developing nations prepare for IOSA. Development Institute (ITDI) developed personnel, including pilots, engineers, Since the launch of PfS, over 200 airlines training for auditors and a course to help and air traffic controllers. There will be have received assistance in the form ground handlers prepare for the audit. 17,650 new aircraft in the global fleet by of awareness seminars, individual gap IATA is establishing a pool of airlines 2018. To fly those aircraft, the industry audits, and specialised training courses. and auditors committed to launching will need 207,000 more pilots, or As a result, these airlines were able to ISAGO in 2008. The target for the 18,800 pilots per year. This exceeds the meet the IATA deadline to conduct IOSA year is to audit eight ground handling current capacity to train 15,200 pilots a by the end of 2007. companies at the headquarters level, year, which, in turn, creates a potential To build on that success, IATA has which will serve to validate the safety shortage of 39,600 pilots in 2018. To developed and fully funded PfS Plus, practices and policies for their networks close the gap, it’s clear the industry which will help airlines in developing of airport operations. Following each needs to re-think pilot training and regions close the findings from their headquarters’ audit, up to 60 of a qualification and create global standards initial IOSA audits and prepare for ground handler’s airport stations will for training concepts and regulation. It their renewal audits by maintaining be audited to demonstrate compliance must also make aviation more attractive ongoing IOSA compliance. PfS Plus with station-oriented standards and to to potential candidates. will also focus on Indonesia and Brazil. show connectivity with headquarters’ IATA has addressed these issues with In Indonesia, the programme provisions operations. the IATA Training and Qualification will be offered to all Indonesian carriers Initiative (ITQI). The Multi-Crew Pilot to enable them to prepare for and to License (MPL) is integral to ITQI. It is a undergo the audit. In Brazil, the emphasis fully integrated, competency-based, and will be on infrastructure, procedures, and Safety Management Systems quality-driven concept with an emphasis training improvements to promote safety A Safety Management System (SMS) on the pilot’s role in a multi-crew enhancement. improves safety using a regimented environment. In 2007, IATA established a approach to design and implement global MPL task force. That task force is organisational processes and procedures developing a plan for globally harmonised training, is supporting the implementation IATA Safety Audit for Ground to better identify safety hazards and control risks. of MPL in China and Japan, and is Operations (ISAGO) conducting a gap analysis of the existing SMS is an IOSA requirement. And, as Airline Transport Pilot Licence (ATPL) It is estimated that ground damage to of 2009, it will be an ICAO requirement academic standards. aircraft or other equipment costs the for airline operators, maintenance airline industry about US$4 billion every organisations, air navigation service IATA is also joining forces with ICAO and year, not to mention the additional cost providers (ANSP), and certified the US-based Flight Safety Foundation and duress caused by physical injuries aerodromes. IATA is working with (FSF) to deliver a global solution or fatalities. At the end of 2006, IATA these groups and with ICAO and its that aims at enhancing quality while began work on the IATA Safety Audit for member states to help them develop increasing capacity. Ground Operations (ISAGO) to tackle and implement SMS. A safety assurance the problem. Like IOSA, ISAGO aims to process, to ensure quality, is a key improve both safety and audit efficiency. component of a functional SMS. IATA is During 2007, IATA developed the first set of harmonised audit standards applicable to all ground handling companies. 25

Infrastructure safety Safety Information Centre

Airline safety is linked with the global In December 2007, IATA launched a aviation infrastructure. This includes the project to help airlines better understand design of airports, airspace, and air traffic and manage operational safety risks: the management (ATM) systems. Safety Information Centre. This centre offers a platform for sharing the analysis IATA is collaborating with ANSPs, of safety data, including incident reports, airports, and regulators to address flight data, and IOSA data, to name only ATM safety issues related to a variety a few sources. of subjects, including runway safety. In 2007, 25% of all accidents involved a runway excursion. IATA has joined forces with member airlines, FSF, and other stakeholders to develop an electronic toolkit that will address issues linked to runway safety. That includes measures to mitigate the consequences of excursions and a standard for aircraft braking action measurement and reporting.

We are a global industry. Flying must be safe everywhere. No exceptions. Giovanni Bisignani 26

Security

Advance Passenger Information (API)

Security is a top priority, along- In 2007, IATA initiatives protected the Globally, an increasing number of side safety and the environment. industry’s bottom line by working to governments are demanding that airlines Passengers deserve smarter reduce aircraft security delays, eliminate provide them with Advance Passenger and faster aviation security duplicate transmission of passenger Information (API) for security, border data, change regulatory fine structures, control, and customs purposes. The measures. IATA’s global align regional passenger data collection cost of changing industry data networks team works in collaboration requirements, and standardise security and reservation systems to meet varying with regulators, airlines, and programmes. requirements is significant for airlines, manufacturers to make this a particularly when nations propose IATA promotes a risk-based approach solutions outside international guidelines. reality. At the same time, IATA to security to ensure that resources are IATA estimates that a typical airline will strives to ensure that security used in the most effective and efficient spend US$50,000 for each data element procedures and technologies manner. To that end, IATA promotes changed in an API message mandated international cooperation and encourages are cost effective. by a regulator. the mutual acceptance of security screening among competent regulators. IATA works extensively with members, IATA also advocates a layered aviation service providers, and government security system in which the most agencies in a concerted effort to effective countermeasure is the ability standardise passenger data exchange of a nation to fully utilise intelligence programmes. During 2007, IATA’s resources and security forces. efforts led to beneficial changes in a number of countries, including the United States, the countries of CARICOM (10 Caribbean states with a common programme), Costa Rica, Hungary, Peru, Romania, and others. IATA now has available for members a user- friendly API and passenger name record (PNR) reference database covering all known and anticipated passenger data exchange programmes. 27

Passenger Name Record Cabin baggage restrictions APIS Quick Query final rule (PNR) in the United Kingdom in the United States

Governments continue to press the During the same time period, the Air carriers flying to the United States industry for greater access to airline United Kingdom introduced limitations will have to comply with the US Customs Passenger Name Record (reservation) on both cabin bag size and numbers. and Border Protection’s (CBP) new rule data while doing little to address IATA members operating from the on Pre-Departure Advance Passenger incompatibility in passenger privacy laws, UK were affected, as passengers Information System (APIS), including data transmission standards, and data avoided transferring flights in the APIS Quick Query (AQQ), by the end of access. IATA is working closely with the UK. IATA met with the UK Secretary 2008. The key to the AQQ system is the industry, with individual nations, and with of State for Transport to press for a near real-time processing of passenger ICAO to agree on a common approach solution. This meeting, along with new information and immediate issuance of to PNR. During 2007, IATA helped technology proposals from BAA, led to a board/no-board decision. IATA has facilitate the EU-US PNR agreement a governmental review of the cabin bag been in the forefront in bringing together signed in July 2007 and joined with numbers restriction. As a consequence, the CBP and the industry to reduce the stakeholders in calling for negotiations an airport-by-airport removal of the financial and process impacts of the new between the European Union and other numbers restriction went into effect regulation. For example, the lifting of countries seeking access to PNR data. January 2008. severe restrictions on the ability to issue boarding passes will reduce check-in delays and the number of passengers denied boarding at transfer points. Cabin baggage restrictions Mutual acceptability IATA also successfully argued for in the European Union IATA continued to press regions and allowing final data submission up to the Following the London liquid bomb plot national governments to conclude point of departure instead of 30 minutes of August 2006, the European Union security agreements recognising each before the flight, avoiding millions of introduced a regulation restricting the other’s level of security. This strong dollars of costs to airlines in delays, carriage of liquids and gels on board signal pushed the European Union re-routing, and re-accommodation. aircraft that included a clause restricting and Singapore to sign the first bilateral cabin bag size. If implemented, the size agreement on liquids, aerosols, and gels restriction would have inconvenienced (LAGs) in December 2007. In Central passengers arriving and transferring America, IATA helped seven countries at EU airports. Led by IATA, EU develop a harmonised common security stakeholders objected to the cabin bag programme. Although these moves size clause, and the restriction was represent step-by-step progress towards officially withdrawn in April 2008. one-stop security, nations continue to drag their feet on implementing a pragmatic approach.

We are more secure than we were in 2001 but the annual bill is now US$5.9 billion. I see more hassle than value for this cost. Instead of becoming smarter, faster and simpler, too often we make it more difficult and more complicated. Giovanni Bisignani 28

Simplifying Passenger Travel Security Management Systems (SPT) (SeMS)

The IATA-led Simplifying Passenger IATA’s SeMS provides airlines with a Travel (SPT) interest group provides the risk-based framework to create a security industry with a vision and technology culture that runs in parallel with an trials aimed at making passenger travel airline’s safety culture. Today, some 117 more convenient and secure. In 2007, airlines have implemented SeMS. the SPT interest group delivered the To speed worldwide acceptance and innovative Ideal Process Flow (IPF) 2.0 implementation, IATA continues to that leverages the use of real-time data press regulators to make SeMS part of exchange and biometrics for better national aviation security policy. In 2007, passenger identification. Mexico, Costa Rica and Turkey mandated A “proof of concept” trial at Heathrow, IOSA and the SeMS core elements. called miSense, was conducted by the Brazil and Panama did so in the early UK members of the SPT interest group part of 2008. Additionally, Transport and tested the IPF concepts of self- Canada announced its intention to service check-in, expedited security, develop legislation detailing the SeMS automated boarding, and border control requirements for Canadian transport using pre-collected passenger data and operators. biometrics. The trial results showed high levels of acceptance both by passengers and staff and proved the feasibility of the technology to support the IPF. Cargo security: Secure Freight The SPT interest group is now IATA plans to enhance supply chain encouraging similar trials worldwide. integrity with its Secure Freight programme. Launched in 2007, this long-term initiative aims to secure cargo supply chains by defining, auditing, and Aircraft security registering secure operators that act in compliance with a quality assurance Protecting critical aviation infrastructure system. from terror and hijacking threats continues to be IATA’s core security During 2007, a number of building focus. In 2007, IATA performed security blocks were put in place. IATA and surveys at 10 major international the International Federation of Freight airports. Additionally, in coordination with Forwarders Associations (FIATA) formed member airlines IATA provided over 140 an Air Cargo Security Industry Forum recommendations to the Transportation of 26 trade associations to influence Security Administration (TSA) to stream- regulators with a common message line the foreign air carrier security prog- and unified voice. IATA is developing ramme. These recommendations will be internationally recognised security reviewed in 2008. accreditation standards with a security audit similar to ISAGO for supply chain operators. The target is to pilot this audit with a shipper and a forwarder by the end of 2008. IATA will also lead efforts to create a global registry of secure supply chain operators, including known shipper details, to be used by regulators and the supply chain to verify customers’ security accreditation. IATA will pilot the audit with at least two supply chain operators during 2008. 29 30

Regulatory and Public Policy

Economic regulation – generally a quiet year Growing congestion Air transport supports 32 There were several dark clouds on the The gap between demand for air million jobs and US$3.5 trillion regulatory horizon at the beginning of transport and available infrastructure in economic activity. Still, it 2007. The US government attempted continued to grow in 2007 and continues to be shackled to micromanage the treatment of reached critical levels at New York’s passengers with disabilities by non-US JFK airport. This prompted action from by shortsighted government carriers. The European Commission the US government at the highest policies and 60-year-old was reviewing its compensation policy levels and resulted in a thorough policy rules that threaten its financial in case of long delays, denied boarding, review. IATA successfully defended sustainability. and cancellation and its slot allocation the adoption of worldwide scheduling regulation. Only continued and effective guidelines to manage existing capacity dialogue prevented regulators from at US gateways. However, the prospect introducing new regulations that are of ill-conceived and diverse market impractical and costly to implement, so it mechanisms being imposed on the was generally a quiet year. industry looms on the horizon. This includes the potential of primary auctions for new capacity in the United States.

The flags on the tails of our aircraft are sinking the industry. Airlines need commercial freedoms to serve markets where they exist and to merge or consolidate where it makes business sense. Giovanni Bisignani 31

Liberalisation Key trends for 2008

IATA continued to press for the The agreement opens up the The two main regulators, the US and the liberalisation of the industry as a way to transatlantic market between the EU EU, will now enter a quieter phase due improve financial sustainability. Airlines and the US and expands certain traffic to the US presidential elections in 2008 need the ability to pursue business rights. It also creates an open trade zone and the appointment of a new European opportunities where they arise and to encompassing the EU’s internal markets, Commission in 2009. But during this merge or consolidate where it makes the US’s internal markets, and flights quiet period, negotiators will try to pave sense as in any other business sector. between the two. Finally, it establishes the way for further liberalisation under The rules governing aviation, however, a pledge for the two sides to keep the Phase II talks of the open skies are hopelessly out of date with business negotiating towards greater openness agreement between the US and the reality. Ironically, the 60-year-old bilateral and to harmonise rules in a number of EU. IATA will monitor developments and system is the only accord that yielded areas, most importantly competition law. provide economic analysis to support the some progress with the signing in March This is a modest step forward. In 2008, case for progress. 2008 of the open skies agreement the two sides enter a second stage of The main problem is strategic. between the United States and the negotiations. IATA demands progress on The bilateral system of air services European Union. Together, the EU and the ownership and control front. agreements has come under criticism as US comprise 60% of the global aviation On the multilateral front, the World Trade being ill-adapted to the needs of modern market. Organization (WTO) started its review of commercial airlines. Further liberalisation the Air Transport Annex to the General under it is occurring in a haphazard way. Agreement on Trade in Services. WTO Latin America has seen the most creative member states may have limited appetite initiatives to circumvent the system, with for pursuing the liberalisation of traffic the establishment of virtually multinational rights in that forum but might try to open network carriers operating from different ancillary services further, such as airport countries under one brand and a management services. single code. Similar cases exist in Asia, although arguably not so developed. For their part, the US and the EU have pushed the bilateral open skies to a new dimension, at least in terms of size, numbers, and complexity. However, this responds mostly to the particular needs of a very specific, and unique, trading bloc that hardly fits in the Chicago system. When it comes to regulatory influence, market size seems to matter. In that respect, Asia will soon become the largest air transport market in the world. Yet so far it has failed to structure a vision of its own. As a matter of priority, IATA is investigating what set of rules, if any, could replace, reform, or supplement the bilateral system of air services agreements that governs the business aspects of international civil aviation. The goal is to ensure that the industry that facilitated globalisation, can also participate in its benefits. 32

Environment Environment is a core promise we make to passengers, along with safety and security. IATA’s vision for carbon-neutral growth in the medium term and a zero-carbon future is being backed up with a solid strategy that is yielding tangible results.

In 2007, IATA’s fuel programmes saved IATA has developed a four-pillar strategy not exist today, some of the building

10.5 million tonnes of CO2 emissions— to achieve its vision: invest in new blocks are in place in the way of new equivalent to US$2.1 billion. technology, operate aircraft effectively, materials and designs, alternative energy build and use efficient infrastructure, and sources, and advanced IT solutions. Aviation is responsible for 2% of provide positive economic incentives. In CO emissions. Even with annual In April 2008, IATA led manufacturers, 2 the long term, we are being even more traffic growth of 5%, CO emissions airports, and air navigation service 2 ambitious—aiming for a zero-carbon are increasing at only about half that providers in signing a declaration on future rate—some 3%— because of efficiencies aviation and the environment. This implemented across the industry. These IATA’s 50-year vision is for the industry to declaration turned the IATA’s four include a US$2.8 trillion investment be able to build and operate a plane with pillar strategy into an industry-wide in fleet modernisation by airlines by no net carbon emissions. In mid-2007, commitment. 2026, infrastructure improvements, and aircraft manufacturers, engine makers, operational advances. No other industry fuel suppliers, and airlines came together has a better record of improvement. to explore how to make this vision a Over the past 40 years, air transport has reality. Although complete solutions do become 75% less noisy and 70% more fuel efficient. However, a growing carbon footprint is unacceptable for any industry. 33

Our vision is to achieve carbon neutral growth on the way to a carbon-free future. Giovanni Bisignani 34

Four-pillar strategy IATA’s strategy and target to improve fuel efficiency 25% by 2020, compared with 2005, was endorsed by all 179 contracting states of the International Civil Aviation Organization attending its triennial assembly in 2007. In April 2008, at the Aviation and Environment Summit, IATA joined associations representing airports and ANSPs as well as the CEOs of major manufacturers in signing a declaration turning IATA’s four-pillar strategy into an industry commitment.

1. Technology 2. Operations Technology is the key to achieving IATA’s The IATA 2007 Report on Alternative More-efficient aircraft operations can

long-term vision of zero carbon emissions Fuels explores some of the options save fuel and CO2 emissions up to 6% and will account for at least 75% of available and the steps needed to according to the Intergovernmental efficiency improvements. The accelerated increase the use of alternative fuels. Panel on Climate Change (IPCC). IATA development of alternative fuels and IATA has set a target for 10% of airlines’ is compiling industry best practices, more-advanced technology for airframes, fuel use to come from alternative fuels publishing guidance material, conducting engines, and air traffic management is by 2017. A number of airlines and airline visits, and establishing training absolutely essential. IATA is developing manufacturers are already carrying programmes to improve fuel conservation a technology roadmap and a database out innovative research into the use measures. IATA’s Green Teams (formerly of aircraft upgrades and fleet renewal to of biofuels. IATA’s goal is to support Go-Teams) work with airlines around indicate what is available. initiatives looking into alternative fuel the world to identify environmental sources that have a net benefit in efficiencies through gap analyses. In the short term, the focus is on aircraft reducing CO . In 2007, they identified operational upgrades, including aerodynamic 2 measures that saved 6.7 million tonnes improvements, weight reduction of CO and US$1.3 billion. The 75 gap programmes, and engine upgrades 2 analyses conducted to date typically that can result in improvements of 5% saved between 2% to 13% of an airline’s to 10%. In the medium term, next- fuel budget. generation aircraft and new engine designs can result in another 10% to In 2008, IATA Green Teams will expand 15% in improvements. Over the longer the coverage of their gap analyses to term, though, greener aircraft will be include ground operations, take-off and required to achieve a further 10% to approach techniques, flight-planning 15% in greater efficiency. tools and procedures, aircraft upgrades, and fleet renewal. 35

3. Infrastructure 4. Economic instruments By addressing airspace and airport Reorganising air traffic over the Bay of IATA believes that positive economic inefficiencies, governments and Bengal is saving 50,000 tonnes of CO2 incentives should be used to boost the infrastructure providers can eliminate up a year. Modernised approach procedures research, development, and deployment to 12% of CO2 emissions from aviation planned at Japanese airports will save of new technologies rather than negative according to the IPCC. Implementation 160,000 tonnes of CO2. measures, such as taxes and charges of the Single European Sky (SES) and designed to suppress demand. Punitive However, there are several areas the US NextGen Air Transport System taxes do not improve environmental that continue to bleed CO through is a top priority for the progressive 2 performance. inefficiencies. The efficiency gains harmonisation of global airspace from implementing SES would lead to In 2006 and 2007, the industry saw management. Flexible airspace access a 12 million tonne annual reduction in several proposals for “environmental must also become a reality in other CO . Sorting out the tangle of air traffic taxes” that were thinly veiled attempts to regions, especially in Asia, where traffic 2 procedures for the Pear River Delta’s five pad public coffers, such as the increase growth is particularly strong. airports would yield savings of 250,000 in the UK Air Passenger Duty.

The optimisation of routes and terminal tonnes of CO2. areas are the main focus. In 2007, 395 Reduced Vertical Separation Minima routes and operations at 80 airports (RSVM) provides another opportunity to were optimised, saving 3.8 million reduce CO by increasing the number of tonnes of CO and US$831 million. 2 2 aircraft that can safely fly in a particular volume of airspace. IATA is working with governments and advising them how to implement RVSM. RVSM was successfully implemented in Algeria in October 2007, saving 120,000 tonnes

of CO2. It was successfully implemented in China in November 2007, for a saving

of 1.1 million tonnes of CO2. The focus for 2008 will be the implementation of RVSM in Russia, Central Asia, and Africa. 36

European Emissions Trading Scheme Carbon offsets IATA communications

If properly designed, emissions Over the past few years, a growing IATA stepped up its communications trading might be a useful element of a number of airlines have introduced efforts in 2007 to address negative

comprehensive approach to reduce CO2, voluntary carbon-offsetting schemes for perceptions about the role of aviation in along with new technology, more-efficient their passengers. As of 1 April 2008, climate change. infrastructure, and improved operations. some 25 airlines had introduced such But it needs to be global in scope for a schemes. But passenger use is low, and global industry tackling a global problem. the parameters, costs, and supported Phase One: projects vary widely from one programme During phase one of its In 2007, the European Union states to another, especially with respect to the communications campaign, IATA decided to ignore the ICAO resolution calculation of emissions for particular targeted airline passengers through requiring mutual consent for the routes and the price charged per tonne in-flight entertainment. Seven print implementation of emissions trading of carbon. The variations are so extensive advertisements are running in airline schemes. Instead, they pressed ahead that they threaten the credibility of these magazines to complement a short, one- with plans for a unilateral scheme that programmes. minute video. The adverts have also includes European and non-European appeared in print media, such as the carriers and routes. IATA has developed a set of standards, International Herald Tribune and Financial metrics, and guidelines for the set-up This will have significant negative Times. and administration of carbon-offset consequences. Extraterritorial programmes to support members Phase Two: implications could mean years of legal that wish to introduce such schemes. Phase two targets even more passengers deliberations, which will do nothing to These guidelines incorporate the with the installation of eye-catching mitigate climate change. Traffic will shift recommendations for emissions information stands at major airports. The to airports on the periphery of Europe. calculation methodology being developed pilot stand was at Geneva airport from And the competitiveness of EU airlines by ICAO’s Committee on Aviation December 2007 to March 2008. IATA could suffer. Environmental Protection (CAEP) in plans to place stands at a further nine Recent discussions with the EU indicate conjunction with IATA. airports across Europe during 2008, a new openness to engage with ICAO including Istanbul, the host city of IATA’s and IATA on a global approach. IATA will Annual General Meeting. be pursuing this further during 2008. Cargo and the environment IATA produced a three-minute video, IATA is working with other industry Destination Zero, that tells the story bodies and other transport modes, of aviation’s amazing technological including sea freight, to limit supply advances since the dawn of flight. chain CO emissions. As part of that 2 The video also looks at what might be effort, IATA, in conjunction with the possible in the future to achieve carbon- University of Hong Kong, has conducted free flight. research to quantify CO2 emissions from the transport of cargo by air. In 2007, IATA used this research successfully to challenge a large retail chain that misled the public with its food miles labelling. In 2008, IATA will benchmark best practice

for reducing CO2 emissions in the supply chain.

IATA, meanwhile, is playing a crucial role in a cross-industry campaign coordinated by the Air Transport Action Group (ATAG). Activities in 2007 included the launch of the ww.enviro.aero website and a sustained media campaign, including rebutting inaccurate or misleading comments in the media. 37

Aviation emissions – the facts

>>IATA’s target of a 25% improvement in fuel efficiency between 2005-2020 will

save around 345 million tonnes of CO2 emissions. Aviation is a small part of >>Each kilogramme of fuel saved reduces the big problem of climate

CO2 emissions by 3.16 kg. Fuel change. We take our efficiency improved by19% during responsibility to reduce 2001-2007. emissions seriously. >>Based on the IPCC Fourth Our future depends on our Assessment Report, it is estimated ability to limit our carbon that the commercial aviation industry footprint. emitted around 670 million tonnes of Giovanni Bisignani CO2 in 2007 and that our emissions are growing by some 20 million tonnes each year. This is far less than the emissions from road transport, shipping, deforestation, or energy production. Aviation is and will remain a small part of the big problem of climate change. 38

Cost-efficiency

Airports In 2007, the IATA external A memorandum of understanding The Chinese government published cost campaign continued to (MOU) signed with Incheon International a new airport charges regulation that drive considerable savings for Airport Corporation will secure savings follows IATA recommendations in a member airlines in airport and in charges of US$483 million between number of areas as the first step in a 2007 and 2010, of which US$75 million gradual reform process. The regulation, air navigation charges, fuel is real cost reductions. The savings will which went into effect 1 March fees, and taxation. Total savings be largely the result of a 10% reduction 2008, provides for the withdrawal were US$3.7 billion, including in landing fees for 2008–2010 and an of discriminatory charges leading to US$1.1 billion in real cost agreement to freeze all other charges at lower international charges and higher reductions and US$2.6 billion 2006 levels until 2010. domestic charges. However, many issues still need to be addressed. The in potential cost increases that In 2007, the Greater Toronto Airport Chinese authorities and IATA have were avoided. Authority (GTAA) announced reductions signed a cooperation agreement to move in landing charges of 3.1% and in progressively to best practice airport terminal charges of 4.7% for 2008, a management, regulation, and charges as welcome change from a traditionally a cornerstone of Chinese aviation. expensive airport. These decreases result from cost cuts, efficiency improvements, Savings in airport charges were more and increased traffic. Crown rents, than offset by increases of US$1,454 however, remain the major cost problem million. Major contributors to this problem at Toronto, and IATA continues to press were airports in Australia (Brisbane and Canadian politicians to address this Melbourne); Belgium; and the United issue. Kingdom (Heathrow and Gatwick) and new security charges in Malaysia and the As a result of a concerted IATA campaign Philippines. in Brazil, the Brazilian government has provided funding of just over US$1 IATA has blasted as a failure the decision Savings were offset by US$2.9 billion billion to airport operator INFRAERO of the UK Civil Aviation Authority (CAA) in government tax increases and airport to offset the costs of infrastructure to allow costs at London airports to and air navigation price hikes. Pressure investments. This results in real savings rise a massive 86% between 2008 for new aviation taxes is higher than ever, for airlines, since the cost would and 2013. For Heathrow, the CAA has with the UK government announcing otherwise have been recouped by higher allowed charges per passenger to rise a proposed change from the UK Air charges. 23.5% from 1 April 2008, followed by increases of 7.5% plus inflation for each Passenger Duty to an aircraft-based In Argentina, after two years of of the following four years. In the case of aviation duty that would increase revenue discussions with the Argentinean Gatwick, a similar 21% hike from 1 April by around US$1 billion. government, the Argentinean congress, 2008 will be followed by increases of ORSNA, and AA2000, IATA reached These figures demonstrate that a strong 2% plus inflation for each of the following an agreement with the airport imbalance remains in the aviation value four years. IATA will continue to fight for concessionaire AA2000 that includes chain and ongoing abuse by monopoly proper economic regulation of the BAA a 30% reduction in direct charges to providers. Although there are some airports by the CAA. excellent airport and air navigation airlines. service providers (ANSPs) that compete The industry outcry has drawn the each year for the IATA Eagle Awards, too attention of the Parliamentary Transport many out-of-control monopolies rake in Committee and the Competition exorbitant profits when left unchecked. Commission and led to the government’s In addition to damaging competitiveness, independent review of the CAA by Sir this lack of cost control is in stark Joseph Pilling. contrast to what airlines have achieved since 2001: a 64% improvement in labour productivity and an 18% reduction in non-fuel unit costs.

1 passenger related 39

The bureaucrats have proved to be impotent in defending the interests of travellers against monopolies. The UK regulator is a phantom. Giovanni Bisignani 40

EC airport charges directive Air navigation service providers In 2007, in response to lobbying by IATA, In dealing with ANSPs in 2007, US$372 Real cost savings and cost efficiencies the European Commission published million in real reductions generated by in European air traffic management its proposed directive on airport IATA was outweighed by cost increases will only be achieved by implementing charges. Although it was a significant of US$464 million. the long-delayed Single European improvement on earlier drafts, it is weak Sky. The lack of progress results in The most significant region for air on cost-efficiency targets and the robust continuing inefficiency, fragmentation, navigation charges is Europe, through economic regulation of airports. IATA’s and delays, which cost the industry 12 the EUROCONTROL Agency and its lobbying campaign, conducted jointly million tonnes of CO and US$4 billion member states. Cost reductions of 2 with the Association of European Airlines a year. IATA welcomed the report and US$232 million from some countries (AEA), continues to focus on three areas: recommendations of the EC High- were offset by cost increases from to strengthen the role of the independent Level Group and continues to press others, of US$242 million. Although regulator, to include cost-efficiency for the speedy implementation of those IATA efforts also led to cost avoidance of targets, and to improve the transparency recommendations through a new SES US$133 million. The average weighted requirements for airports. Package 2, due to be released in the first charge for 2008 has been reduced half of 2008. 0.3% compared with 2007, but total chargeable costs have increased 9.2%, Nav Canada, meanwhile, has announced to US$9.7 billion. Only two of the 30 a 4% reduction in navigation service member states have reduced their costs charges. This represents cost reductions for 2008, while 14 have reduced their of US$60 million. unit rate charges. Improvements are almost entirely due to the forecast 10.5% increase in traffic, with expected cost- control and cost-efficiency improvements still to be delivered. 41

Working together to improve Taxation cost efficiency The aviation industry continues to IATA continues to fight for effective and governments to protect the interests be regarded by many politicians and cost-efficient infrastructure. of airlines, passengers, and national governments as a source of additional economies by ensuring that monopoly Airline needs are clear: revenue. So IATA continues to fight providers are subject to robust and proposals for aviation taxes that are often >>Adequate capacity to ensure that independent economic regulation. described as being for environmental, markets are well served; IATA strives for transparency and proper social, or development purposes when, >>Service levels that meet customer consultation with its industry partners in in reality, they are largely revenue- expectations; and achieving long-term pricing and business generation opportunities. agreements. These efforts are furthered >>Prices that reflect efficiency. In 2007, IATA secured savings in taxes by written materials that forcibly put of US$642 million, of which US$217 forward the industry’s case supported by million was in real cost reductions. studies, facts, figures, and analyses. The privatisation of airports is often seen The most significant decreases were as an opportunity to deliver on these in Canada (decrease of Goods and three essential criteria. But an airport is Services Tax and Harmonised Sales important for what it delivers, not for who Tax); Denmark (expiration of Transport owns it. Providing the right incentives is Tax); and Guatemala (Transport Tax the most critical part of the privatisation ruled unlawful). Avoidance of a new process. The industry has seen many environmental tax in Belgium saved the privatisations fail because governments industry US$412 million. did not provide appropriate guidance to Again, tax increases were much higher the new owners. IATA continues to urge than savings, at US$925 million. The major culprits were Egypt, with US$416 million (new tax on departing passengers); the United States, with US$223 million (increase of domestic segment flight tax and international departure/arrival tax); and the Republic of I don’t care who owns the airport. Korea, with US$89 million (introduction That is for politicians to decide. of Aid Tax). An airport is important for what it delivers. We need efficiency. Giovanni Bisignani 42

Industry and Financial Services

Billing and Settlement Plans Cargo Accounts Settlement IATA Currency Clearance (BSPs) System (CASS) Service (ICCS)

IATA’s BSP acts as an interface between CASS improves airline administrative ICCS helps airlines to centrally manage travel agents and airlines, providing an efficiency by simplifying the billing their worldwide cash funds and convert efficient and cost-effective system that process. In 2007, 14 CASS operations currencies at optimal market exchange simplifies the selling, reporting, and were added to the global network, rates. ICCS continued its strong growth remitting procedures of IATA-accredited bringing the total number to 72. in 2007, clearing a record US$26.5 passenger sales agents. By the end of Numerous records were set during the billion. More than 210 airlines use the 2007, there were 81 BSPs in operation year, including air waybills processed (17 service to manage funds collected in 82 covering more than 160 countries and million); value settled (US$23 billion); countries. territories, including new operations in and collection success rate (99.994%). ICCS is a key component of airlines’ Albania, Nepal, and Papua New Guinea. The consolidation of CASS data treasury tools for the efficient repatriation IATA cut costs 36% during 2007 while processing continued in 2007, with of their overseas sales funds. In 2007, a handling record volumes: gross sales six operations migrating to the global new facility for the accelerated transfer totalled US$220 billion, up 14.6% platform, CASSlink. CASS Courier, and straight-through processing of Euro over 2006. And IATA BSP processed Domestic, and Import operations have funds was successfully launched. 458 million transactions, an increase also migrated to the CASSlink system. of 13.3% over 2006. Bad debt on Since the introduction of CASSlink four increased sales in 2007 was only years ago, unit costs have been reduced 0.024% of gross sales. 50%. There are now 25,000 agent locations connected to the system. A global air waybill (AWB) management system that simplifies the AWB number allocation and control process was introduced during 2007 in eight countries. Since its launch, the global system has attracted more than 100 airline users.

We handled more of our members’ money than ever before…US$315 billion. That is more than the GDP of Greece. Giovanni Bisignani 43 44 45

IATA’s Currency Coordination Activities IATA InvoiceWorks

IATA helps airlines repatriate funds from and eliminates the need for retroactive IATA InvoiceWorks provides an Internet- highly or restrictively regulated markets adjustments to airline revenues. based electronic invoicing service for and countries. In 2007, US$269 million the air transport industry. Through IATA During 2007, further efficiency was of members’ funds was blocked or InvoiceWorks, members cut costs obtained by consolidating the two delayed, up 6% over 2006. Of this total, associated with sending, receiving, and existing neutral proration engines US$123 million is in Venezuela and processing invoices up to 75%. into one that will now generate all includes funds for which repatriation interline-billing values based on industry Over 270 airlines and more than 5,500 applications were submitted in November standards and bilateral agreements. industry suppliers are already linked and and December 2007. enjoy the financial benefits of electronic The position on repatriations from invoicing through IATA InvoiceWorks. Bangladesh, Eritrea, Ghana, Guinea, Iran, During 2007, the number of invoices Libya, Nigeria, Pakistan, Seychelles, and Simplified Interline Settlement processed through IATA InvoiceWorks Syria substantially improved during the (SIS) grew to 650,000, an increase of 38%. year, but deteriorated in Algeria, Ethiopia, Malawi, and Mozambique. IATA, together Web-enabled, weekly ICH settlements with airline treasury departments, and 100% ET provide an opportunity is driving action plans to ease the to simplify and integrate the full interline IATA’s ATC and Airport repatriation of funds from these markets. billing-to-settlement cycle. SIS aims Enhancement and Financing to deliver just that by automating and (E&F) Service integrating all interline billing activity, eliminating paper from the process The E&F Service helps ANSPs lower IATA Clearing House (ICH) through electronic invoicing, and the costs and improve the efficiency enabling automatic reconciliation of associated with the invoicing and In 2007, the ICH completed a interline billings with ICH claims. collection of user charges by using fundamental transformation of the IATA’s financial systems. The service SIS will save IATA member airlines interline settlement process. After 60 also helps airports and ANSPs secure between US$500 million and US$750 years of monthly cycles, the industry cost-effective financing for investment in million per year by eliminating duplication moved to the weekly settlement of civil aviation infrastructure. By the end of and legacy, paper-based processes. It interline transactions to improve risk and 2007, IATA’s E&F Service had processed will also deliver environmental benefits cash management for all participants. more than US$950 million in over 40 by avoiding the need to transport 200 countries, including China and India. Additionally, the period between an tonnes of paper invoices and supporting interline transaction and its settlement data each year. has been shortened from an average of 45 days to 12 days—a reduction of 33 days, or 73%. The average amounts outstanding also IATA Card Services have been reduced, about 70%. IATA CardClear global card processing The value of industry billings through and IATA CardAXS credit card the ICH increased 12% in 2007, to settlement provide the centralised US$44.3 billion. This shows substantial settlement of airlines’ global credit card growth in all types of interline business sales. Worldwide, credit card sales except cargo, which registered a small account for 28%, or US$61 billion, of decline. airlines’ sales through IATA agents. IATA CardClear is firmly established as the main service for processing credit card sales for 107 member airlines. First & Final Interline Billing Linked directly to IATA CardClear, the Shows Growth IATA CardAXS service provides multi- currency settlement to IATA members for The number of airlines using First & Final their global Visa and MasterCard sales. for interline billing increased from 24 to 35, and transaction volumes now exceed two million per month. First & Final enables billings to be settled on a first- pass process that avoids billing disputes 46

Industry and Financial Services

Passenger Agency Programme

The Passenger Agency Programme will soon be available in all to and from Conference in 2007. They will allow provides an efficient and financially Europe markets and between the United airlines to automate the pricing, secure method of distribution, billing, and States and Australia. booking, and payment of discretionary settlement for its member airlines through services, such as prepaid meals, priority In addition to addressing regulatory IATA-accredited travel agents. In 2007, seating, lounge access, and in-flight concerns and maintaining the important the programme was modernised by the entertainment, among other services. This consumer benefits derived from adoption of a new set of rules introduced helps airlines to take advantage of the interlining, flex fares bring substantial in six southern African nations and the efficiencies of the industry distribution industry cost savings, as updates can entire southwest Pacific region, including system and to ensure payment and be handled automatically using the Australia, where specific immunity from service delivery. new Internet-based e-tariffs electronic competition law has expired. The goal is platform. E-tariffs is a virtual conference to roll out this new set of rules in other system where tariff coordination markets in 2008 in close consultation members make anonymous proposals to Scheduling with the agent community and as agreed maintain IATA interline tariffs. It is being by the Passenger Agency Conference In 2007, the heads of delegation of used to replace traditional face-to-face (PAConf). The final strategy sees the Schedules Conference endorsed meetings in other regions. The transition the entire IATA Passenger Agency the recommendations of five process- to e-tariffs will continue through 2008. Programme operating under a single improvement task forces that will deliver set of rules, with local variations where In 2008, IATA plans to implement flex significant cost savings and productivity required. fares on routes between Australia and improvements in the slot allocation the rest of the world where immunity is process for the 2008 Schedules due to expire on 30 June 2008. Other Conference. Airlines can now receive Tariff Conferences: markets will be included as the regulatory data prior to the conference, and the environment evolves and to drive advancing of the slot hand-back date will IATA Flex Fares and e-Tariffs efficiencies. give coordinators extra time to re-allocate Since the expiry of the block exemption slots for the airlines. An expanded for tariff coordination in intra-EU markets number of pre-conference activities at the end of 2006, the new IATA Discretionary Services will cut out administrative activities and multilateral interline flex fares system allow airlines to use their time for slot has been made available for sale in five A new recommended practice (RP1790) acquisition and trading. regions flying to and from Europe. This and new reservations procedures were is in line with the US and European adopted by the Passenger Services regulatory deadlines of 30 June and 31 October 2007, respectively. Flex fares

IATA’s job is to improve our industry’s competitiveness. We are driving change in critical areas. Giovanni Bisignani 47

Standard In-flight Safety Video

In response to member airline requests, chain from 40 to 19 while improving of dangerous goods shipments for IATA produced a standard in-flight safety reliability. Cargo 2000 is under the carriage by air. video that uses modern video techniques management of Cargo Network Services A new specialised task force has been to convey the latest mandatory safety (CNS), a subsidiary of IATA, with the created to support the development of briefing information. The video can be Cargo 2000 Board remaining as an standards for the transportation of time- customised to reflect individual airline’s IATA-funded interest group. In 2007, and temperature-sensitive shipments, cultural, marketing, and business Cargo 2000 participants rose from 56 in specifically for the pharmaceutical requirements. This affords airlines a 2006 to 62. industry. cost effective and professional means of The priorities for Cargo 2000 during enhancing safety and their brand image. 2008 are to strengthen the Cargo 2000

management team and to improve the Unit Load Device (ULD) network penetration of Cargo 2000 IATA Catering Quality among its existing participants, to 85%, Management Project Assurance (ICQA) Programme up from the current 63%. As a result of the ULD Management Project, IATA will promote the adoption The ICQA allows airlines to achieve of robust, lightweight containers. Industry cost reductions in the area of catering savings arising from reduced fuel burn facility auditing. The programme features Standards will amount to US$83 million per year. common food safety and quality New IATA air waybill conditions of A ULD optimisation tool has been standards and consistent and effective contract have been adopted through produced enabling airlines to conduct audits carried out by independent the Cargo Services Conference under more-effective inventory planning and professionals. In 2007, 800 audits were Resolution 600b and were declared procurement decisions. A training conducted on over 200 catering facilities effective on 17 March 2008. This programme has also been developed worldwide on behalf of the nine airlines industry-preferred version will provide to reduce damages from improper that have joined the ICQA so far. a modernised, standardised, and handling. The business case for ULD

abbreviated version of the air waybill track and trace enabled by RFID has conditions of contract for the industry. been completed, as has a passive RFID Cargo 2000 The Cargo Services Conference has standard. However, with a payback period of four years, the business case Cargo 2000 delivers a simplified quality approved the use of postal air waybill was put on hold until there is sufficient management system that reduces the numbers for the transportation of mail demand. number of steps in the air cargo supply by the airline industry. The Dangerous Goods Board has likewise adopted the provisions for the electronic acceptance Cargo Agency Programme The Cargo Agency Programme continues to evolve in response to the changing role of the freight forwarder from that of agent of the carrier to agent of the shipper. In 2007, the Cargo Agency Conference adopted a new Air Cargo Programme for India modelled on the European programme established around mutual airline and forwarder benefits. Additionally, the Cargo Agency Programme operated in Australia underwent significant amendment to comply with trade practices legislation without needing to seek immunity from the national authorities. The IATA/FIATA Consultative Council, meanwhile, successfully addressed key issues involving customs changes and training in 2007. 48

Aviation Solutions

Training and development IATA helps companies across In 2007, the IATA Training and vast database of requirements. The the industry navigate the Development Institute (ITDI) enrolled site aims to reduce the annual industry changing business landscape 36,700 students in 535 courses. More cost of over US$200 million caused by with a suite of services than 27,000 of those students were in the 35,000 travellers who are turned distance-learning programmes, with the back at destination or transfer points and solutions that improve remainder attending classroom courses by immigration authorities for improper performance and promote in one of IATA’s five regional training documentation. profitable growth. centres and in-company or regional programmes. Importantly, ITDI supported the IATA Conferences and events Consulting Partnership for Safety Programme in 2007. ITDI worked closely with the In 2007, IATA offered 14 global events In 2007, IATA Consulting undertook International Airline Training Fund (IATF) covering passenger, cargo, airport, and over 80 engagements with organisations to deliver 35 safety-related courses in civil aviation fields of interest. The over in 50 countries, including with Qatar developing nations. 4,000 delegates who attended benefitted Airways, Saudi Arabian Airlines, Tunis from high-level discussions, networking Air, SriLankan, and others. Fuel-efficiency Towards improving cargo operations, opportunities, and presentations covering consulting generated an estimated IATA expanded its network of accredited relevant topics and issues. US$200 million in savings during the cargo training schools to 10, diversified

year while helping to reduce CO2 course-delivery language options, and The year saw the development of key emissions. introduced multi-modal dangerous goods new events that bring larger focus areas training through strategic partnerships. under one event, namely, the Ground Operations Safety Symposium, the World In June 2007, ITDI signed a number of Network development and fleet Cargo Symposium, and the Commercial agreements to expand its reach. These planning for Kuwait Airways Strategy Symposium. included a joint diploma agreement with (Kuwait City, Kuwait) Jeppesen Sanderson Inc. to develop IATA Consulting identified high-potential more activities in the United States, aviation markets and customer segments training service agreements with Emirates Strategic partnerships and delivered a detailed 10-year, route- and Saudi Arabian Airlines, and a new by-route schedule development and fleet pact with the United Federation of Travel For 18 years, the IATA Strategic plan based on realistic expansion plans Agents’ Associations to promote closer Partnerships programme has linked air and in line with the strategic vision of collaboration and joint marketing. transport industry suppliers and service Kuwait Airways. providers with IATA and its member airlines in the development of industry solutions. In 2007, airports were also Runway and taxiway capacity Publications given the opportunity to participate in the study for Edmonton International decision-making process, with the launch IATA produces more than 250 Airport (Edmonton, Canada) of the IATA Airport Advisors programme. publications that cover a variety of IATA conducted a study to validate topics. These publications range Over 330 companies, and a growing runway options, to determine the from industry regulations, such as the number of airports, are contributing their gate requirements, and to propose Dangerous Goods Regulations Manual expertise, products and services, and improvements to increase the maximum (DGR), the official manual for shipping financial resources to programmes such runway capacity to ensure cost-effective dangerous goods by air, to specific as Simplifying the Business to ensure a and efficient expansion and operations. air travel requirements captured in the healthy future for the industry. Travel Information Manual. Many of these IATA also conducted a comprehensive publications are now in electronic format aircraft flow simulation study to assess and are being continually enhanced. and validate the proposed concept and to identify bottlenecks and measures to IATA’s electronic online store (www. improve the design. This work is part of a iataonline.com) remains the window into larger project underway in 2008. its entire publications portfolio. During 2007, IATA launched the IATA Travel Centre (www.iatatravelcentre. com), which offers consumers and airlines the chance to verify passport and visa information against IATA’s 49

Business intelligence PaxIS

IATA provides its members with timely derives passenger flow data from issued PaxIS is the most comprehensive airline market intelligence, customised analysis, airline tickets, and CargoIS, the industry’s passenger market intelligence database and individually tailored reports to meet source of cargo market intelligence. In available today. It offers accurate their unique statistical requirements for 2007, IATA expanded the PaxIS service market data based on issued tickets monitoring global trends, identifying to include new tools and data sets, collected from 30 different computer marketing opportunities, and launched Cargo Service Tracker to reservation systems operating in 156 benchmarking. provide insight from air freight forwarders countries. PaxIS data allows airlines to on airline choice and overall service make informed and insightful business To do so, IATA draws on 30 years of data delivery, and expanded the data on low- decisions by supporting: to deliver historical and forecast data cost carriers in the World Air Transport on global passenger and cargo flows. >>Passenger flow analyses of specific Statistics publication. These solutions include PaxIS, a market Origin & Destination (O&D) intelligence tool for air travel analysis that >>Aircraft capacity and cabin configuration analyses >>O&D analyses to develop profitable schedules and maximise passenger loads >>Travel agency performance >>Customer segment analyses by fare class >>Advance purchase analyses >>Distribution channel analyses >>Market share analyses of markets and routes Members also benefit from IATA’s expertise in market research surveys through services such as Intra-Asia and Global Airline Performance (GAP) and from IATA’s Surveys of Flights in Europe. These services are complemented by IATA’s Frequent Flyer Programme Survey, which provides insight on loyalty programmes in the air transport industry, and by the Corporate Air Travel Survey, which is an essential study for any company that needs to know what the world’s business travellers want today when they travel by air. 50

IATA Worldwide Membership

Active Members

Adria Airways Air Pacific Brussels Airlines Ethiopian Airlines Aegean Airlines Air Sénégal International C.A.L. Cargo Airlines Etihad Airways Aer Lingus Air Seychelles Cameroon Airlines European Air Transport Aeroflot Air Tahiti Nui Cargojet Airways Eurowings Aerolíneas Argentinas Air Tanzania Cargolux EVA Air Aeromexico Air Vanuatu Carpatair Far Eastern Air Transport Aeropostal Alas de Venezuela Air Zimbabwe Caspian Airlines Federal Express Aerosvit Airlines Aircalin Cathay Pacific Finnair Afriqiyah Airways Alaska Airlines CCM Airlines flybe.British European Air Algérie Alitalia China Airlines Garuda Air Astana All Nippon Airways China Cargo Airlines Gulf Air Air Austral Aloha Airlines China Eastern Hahn Air Air Baltic Alpi Eagles China Southern Airlines Hainan Airlines Air Berlin American Airlines Cimber Air Hapag Lloyd Air Botswana Angola Airlines Cirrus Airlines Hellas Jet Air Canada Arkia Israeli Airlines CityJet Hemus Air Air China Armavia Comair IBERIA Air Contractors (UK) Asiana Continental Airlines Icelandair Air Europa Atlas Air Continental Micronesia Inter Air Air France Atlasjet Airlines COPA Airlines Iran Air Air India Austrian Corsair Iran Aseman Airlines Air Jamaica AVIANCA Croatia Airlines Israir Air Koryo Azerbaijan Airlines Cubana JALways Air Macau B&H Airlines Cyprus Airways Japan Airlines Air Madagascar Bangkok Airways Czech Airlines Jat Airways Air Malawi Belavia – Belarusian Airlines Delta Air Lines Jet Airways Air Malta Bellview Airlines Denim Air Jet Lite Air Mauritius Biman DHL Air Ltd. Jordan Aviation Air Moldova Binter Canarias DHL International E.C. Kenya Airways Air Namibia Blue Panorama Dragonair Kish Air Air New Zealand Blue1 Egyptair KLM Air Niugini Blue Wings EL AL Korean Air Air Nostrum bmi Emirates Kuwait Airways Air One British Airways Estonian Air LACSA 51

LAM PLUNA Thai Airways LAN Airlines Precision Air Turkish Airlines LAN Chile Cargo Qantas TNT Airways LAN Perú Qatar Airways Transaero LAN Ecuador Rossiya – Russian Airlines TransAsia Airways Lauda Air Royal Air Maroc Tunis Air Libyan Arab Airlines Royal Brunei Ukraine International Airlines Lithuanian Airlines Royal Jordanian United Airlines LOT Polish Airlines Rwandair Express UPS Airlines LTU SA Airlink US Airways Lufthansa SAA – South African Airways Vietnam Airlines Lufthansa Cargo SAS Virgin Atlantic Luxair SAS Norge Virgin Nigeria Mahan Air Saudi Arabian Airlines Vladivostok Air Malaysia Airlines Shandong Airlines Volga-Dnepr Airlines MALEV Shanghai Airlines Wideroe Malmö Aviation Singapore Airlines Xiamen Airlines MAT - Macedonian Airlines SIA Cargo Yemenia MEA - Middle East Airlines Siberia Airlines Meridiana Sichuan Airlines Mexicana Silkair MIAT - Mongolian Skyways Associate Members Montenegro Airlines Spanair Nationwide Airlines SriLankan Air Tahiti Nippon Cargo Airlines Sudan Airways Alma de Mexico Northwest Airlines Surinam Airways Austral Olympic Airlines SWISS Lan Argentina Oman Air Syrianair Lufthansa CityLine Onur Air TACA Safair Philippine Airlines TAM – Transportes Aéreos SATA Air Açores Pegasus Airlines del Mercosur Shenzhen Airlines PGA – Portugália Airlines TAM Linhas Aéreas Tassili Airlines PIA – Pakistan International TAP Portugal Varig Log Airlines TAROM S.A. Zambian Airways 52

IATA Offices Worldwide

Main Offices Regional Offices Montreal - Head Office Geneva - Executive Offices Africa Post Net suite 167 800 Place Victoria 33, Route de l’Aéroport Private Bag X9916 P.O. Box 113 P.O. Box 416 Sandton 2146 Montréal, Québec H4Z 1M1 CH - 1215 Geneva 15 Airport South Africa Canada Switzerland Asia Pacific Tel.: +1 514 874 0202 Tel.: +41 22 770 2525 111 Somerset Road, Fax: +1 514 874 9632 Fax: +41 22 798 3553 #14-05 Somerset Wing Singapore 238164

Main Office Regional Office Country Office www.iata.org