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2019Annual Review Contents Contents Contents 04 Members’ list 06 Chairman’s message 08 Director General and CEO’s message 10 Industry story 16 Safety

22 Security 24 Regulation and taxation 30 Infrastructure 36 Environment 2 3 40 46 Passenger experience 52 Financial services 56 About IATA IATA Annual Review 2019

Alexandre de Juniac Director General & CEO International Air Transport Association Annual Review 2019 75th Annual General Meeting, , June 2019

IATA Annual Review 2019 Annual Review IATA Note: Unless specified otherwise, all dollar ($) figures refer to US dollars (US$). Members’ list

Members’ list Members’ M S V W S7 Vietjet Airlines Airlines WDL Members’ list SAS WestJet A SATA Air Acores Virgin Atlantic Airways Airlines I Cargo Saudi Arabian Airlines Wideroe Cubana MasAir SaudiGulf Airlines AtlasGlobal Airways SCAT Airlines X Austral International SF Airlines Aero Republica Austrian MEA Airlines D Air MIAT Mongolian Airlines Airlines XL Airways Aerolineas Mistral Air Airlines Aeromexico Avianca MNG Airlines Airlines World Airlines Avianca DHL Air Israir Airlines Silk Way West Airlines Avianca DHL Aviation Myanmar Airways SilkAir Air Algerie Airlines J International Airlines Airlines E New Members Airlines N IATA’s membership continues to grow. Air Baltic B Egyptair NCA Air Between June 2017 and May 2018, Jet Lite 13 airlines joined IATA’s ranks, from all Air Airways JetBlue Airways parts of the globe and representing a Air Caledonie Air SpiceJet multitude of business models. Air Belarusian Airlines EuroAtlantic Airways Aviation SriLankan Airlines Air Caraibes BH Air European Air Transport Juneyao Airlines SunExpress In Africa, , the flag 4 Air Biman Bangladesh Airlines O carrier of the Democratic Republic 5 Air EVA Air K of Congo, applied for and gained SWISS Blue Panorama Airways Syrianair membership. BoA Boliviana de Aviacion F -Pacific and North Asia boasts Regional Aviation KLM T Air FedEx Express seven new members. Airlines, Airlines Airlines TAAG Airlines and Air Air Airways P TACA are passenger-focused airlines. Air TACV Air Cargo, meanwhile, Air C L Tame concentrates on the cargo market. Air FlyEgypt TAP , a wholly-owned subsidiary Air CAL Cargo Airlines LAM PGA Portugalia Airlines TAROM of , flies regional routes Air Camair-Co out of Bangkok, Spice Jet from India, Air Angkor Air LATAM Airlines PIA International Thai and Solomon Airlines, the national Capital Airlines G LATAM Airlines Brasil Airlines Thai Airways LATAM Airlines Thai Smile carrier of the Solomon Islands, make Garuda LATAM Airlines Ecuador Airlines the remainder of Asia-Pacific’s latest IATA members. Air Airlines LATAM Airlines Group Q TUIfly Air Flug AG LATAM Airlines Air GOL Linhas Aereas LATAM Airlines Peru In there were four new IATA Nui LATAM Cargo Brasil Airways T’way Air members. Air Dolomiti, part of the GX Airlines LATAM Cargo Group, accompanied Air LIAT Airlines R U , Germania Flug AG, AirBridgeCargo Airlines H and XL Airways France in joining. China Eastern LOT Polish Airlines Ravn International Airlines Airlines Lufthansa , a US-based airline IATA Annual Review 2019 Royal UPS Airlines that specializes in serving smaller CityJet Airlines Lufthansa CityLine communities in its home state of AlMasria Universal Airlines RwandAir Urumqi Air Alaska, also became an IATA member. Hong Kong Air Cargo ANA Congo Airways Airways Hong Kong Express Airways IATA Annual Review 2019 Annual Review IATA Israeli Airlines H.E. Akbar Al Baker,H.E. Chair, IATA Board of Governors & CEO

There is growing pressure on the environmental performance of aviation IATA Board Of Governors 2018–2019 and the industry must continue to do CHAIR OF THE BOARD María José ALSO SERVED all it can. But people who shun aviation Akbar Al Baker Hidalgo Gutiérrez (To June 2018) Chief Executive Officer Chief Executive Officer Safwat Musallam Future air must be or who think aviation should be taxed QATAR AIRWAYS AIR EUROPA Chairman and Chief don’t realize what an economic collapse Executive Officer would happen. Aviation supports 65 MEMBERS Rupert Hogg EGYPTAIR million jobs and $2.7 trillion in global Ahmed Adel Chief Executive Officer effortless and sustainable Chairman and Chief CATHAY PACIFIC (To October 2018) GDP. Without this unique means of Executive Officer Franck Terner transportation, people will not be able H.E. Akbar Al Baker, Chair, IATA Board EGYPTAIR HOLDING CO Harry Hohmeister Chief Executive Officer to cross the world to do business, to (representing EGYPTAIR) Chairman AIR FRANCE of Governors & CEO Qatar Airways boost local economies, or to meet their loved ones. Yuji Akasaka (To November 2018) President Alan Joyce Tan Wangeng Chief Executive Officer President and Chief What were your top priorities An effortless travel experience will be It is important to the future of our Do governments fully appreciate QANTAS Executive Officer as IATA Chairman? so important going forward. Travelers industry and to the future of our the contribution of aviation? Saleh N. Al Jasser CHINA SOUTHERN are becoming tired of overregulation, children and grandchildren that Director General Liu Shaoyong AIRLINES It was to represent, lead, and serve our the endless processing they must there is enough investment by Governments are using aviation as a SAUDI ARABIAN Chairman AIRLINES CHINA EASTERN (To March 2019) industry with strength and humility. suffer, and the laborious security aircraft manufacturers, engine cash cow. For example, they collect AIRLINES David Bronczek checks. Let me be clear, I don’t blame manufacturers, and other supply taxes for the environment but what Enrique Cueto President and Chief IATA plays a very important part in our the authorities for these thorough chain partners to produce equipment do they do with the money? Nobody Chief Executive Officer Sebastian Mikosz Operating Officer industry. As a crucial instrument for processes when our world is passing that promotes sustainability and knows. If governments were really LATAM AIRLINES Group Managing FEDEX CORPORATION Director and CEO airlines, it is important that members, through a very difficult time. But the makes our industry more efficient. serious about the environment, they German Efromovich (To March 2019) governments, and the general public industry, through IATA, can speak would comply with the international Chairman Naresh Goyal

H.E. Akbar Al Baker, Chair, IATA Board of Governors & CEO Qatar Airways & CEO Qatar of Governors Board IATA Chair, H.E. Akbar Al Baker, perceive IATA in the right way. This is in one voice and help authorities agreements that they sign. Instead, AVIANCA Pham Ngoc Minh Chairman not just a rubber stamp organization. and regulators achieve our shared they hit aviation with so-called green Chairman JET AIRWAYS But we’ve started the process to security goals, while improving the taxes to meet general budgetary President and Chief (To April 2019) 6 improve the association’s activities passenger experience. requirements and do nothing for the Executive Officer Oscar Munoz Yang Ho Cho 7 and it was my privilege and duty environment. So they are taking the KLM ROYAL DUTCH Chief Executive Officer Chairman and Chief during the past year to make sure that What steps should the industry money from us but doing very little. AIRLINES UNITED AIRLINES Executive Officer we kept on developing initiatives while take to earn a better reputation KOREAN AIR Mohamad El-Hout Christine providing greater accountability and Governments must reinvest the for sustainability? Chairman and Director Ourmières-Widener enhanced oversight. money from environmental taxes in General Chief Executive Officer The most important thing is the industry to help us achieve further AIRLINES FLYBE LIMITED Together with the board of governors, the leadership with CORSIA. sustainability success. there was a continued effort to The industry has long been Martín Douglas Parker Chief Executive Officer Chairman and Chief ensure that these improvements a leader in environmental Any final thoughts on the year? IBERIA Executive Officer endure in the long term. efforts and aims to halve AMERICAN AIRLINES net carbon emissions I’d like to thank all my colleagues Tewolde GebreMariam Where do you see the most by 2050 compared on the IATA Board for their active Group Chief Executive Calin Rovinescu Officer President and Chief with 2005. participation throughout the year, and important future innovations ETHIOPIAN AIRLINES Executive Officer for the airline industry? their commitment to building a safer, stronger, and better industry. I must Goh Choon Phong IATA has a number of important make a particular mention of Mr. Yang Chief Executive Officer Benjamin Smith projects underway. New Distribution Ho Cho, Chairman and CEO of Korean Chief Executive Officer AIR FRANCE / KLM Capability, One ID, and Radio Air, who sadly passed away in April. Rickard Gustafson (representing AIR Frequency Identification (RFID), He will be much missed from the IATA President and Chief FRANCE) for example, are innovations which Board, by his airline colleagues, and Executive Officer will make future travel effortless most of all by his family and friends. SAS Chairman and Chief and seamless for passengers. And His contribution to aviation and to Robin Hayes Executive Officer they will do so while also bringing Korea was incalculable. President and Chief LUFTHANSA efficiencies into our industry and Executive Officer letting airlines keep their brand JETBLUE AIRWAYS Wang Changshun and identity. Chairman

Pedro Heilbron CHINA SOUTHERN IATA Annual Review 2019 Executive President and AIRLINES Chief Executive Officer COPA AIRLINES IATA Annual Review 2019 Annual Review IATA Alexandre de Juniac, Director General and CEO

Preparations for CNG took a giant step The industry agenda is broad. IATA is proud to lead, represent in January 2019 with airlines beginning Travelers will appreciate the and serve the airline industry as their emissions monitoring for the technology driven innovations such we address these and other issues Carbon Offsetting and Reduction as the One ID program to smoothly with governments and industry Aviation is an amazing Scheme for International Aviation move travelers through the stakeholders. Our vision is to work (CORSIA). Agreed by the International with a single biometric token, and together with our almost 300 member Organization (ICAO) in plans to enhance tracking. airlines to shape the future growth industry. I call it the 2016, CORSIA was approved with the Parallel efforts to modernize slot of a safe, secure and sustainable air full support—indeed with the urging— allocation rules, reform airspace transport industry that connects and of the aviation industry. management and find better means enriches our world. to fund infrastructure development business of freedom CORSIA is just one pillar of the will deliver less visible but equally industry’s commitment to stabilize important gains. Alexandre de Juniac, Director General and CEO net carbon emissions from 2020, and to cut its net carbon footprint to half People

Alexandre de Juniac, Director General and CEO General Director de Juniac, Alexandre n 2018 the world’s airlines provided The threat of trade wars and We can be fully confident that a the 2005 by 2050. And science People are the key resource to about 4 billion passengers the protectionist activity also looms technical solution will be found to tells us that fulfilling this will be take aviation forward. Our industry freedom to travel over a global large. Globalization has made our address the issues that have been consistent with the 1.5-degree-goal provides high quality jobs that network of some 22,000 routes. world more prosperous. And aviation identified. But there are critical of the Agreement. add value to economies in which The average cost of this transport will play a central role in enabling questions still to be answered. What they are located. Aviation careers Alexandre de Juniac was half that of two decades ago. a more inclusive globalization that more can be done to ensure the safe But there is urgent need to more are attractive, but there is growing Director General and CEO IAnd since 2010 the carbon footprint spreads its benefits more evenly. introduction of new technology? concretely demonstrate the ambition concern about how the industry per passenger has reduced by But we must be firm in insisting on How can we reinforce collective of our commitments. And we must be will find sufficient technically skilled aboout 2.8% per year. borders that are open to people and international confidence into state relentless in our efforts to insist that employees quickly enough to keep to trade, or the benefits of aviation certification systems? And how can CORSIA is effectively implemented, pace with demand. Last year, airlines also enabled the will be severely curtailed. authorities and the industry coordinate that strategic investments are made freedom to do business globally by better to maintain public confidence? to commercialize sustainable aviation There are no easy answers, but 8 transporting 64 million tonnes of Over the next two decades, the fuels and that the bottlenecks in it is clear that increasing female 9 cargo to markets around the world. demand for air transport is expected Security air traffic management are sorted. participation in the industry is This activity supported a third of to double. The ability to successfully Security is an equal partner to Together with continued investment a tremendous opportunity. global trade by value, generated 65 meet this demand will require the safety. Flying is secure. But the level in greener technologies, these will Finding ways to balance gender million jobs and underpinned $2.7 industry to excel in several areas. of international cooperation and deliver a significant reduction in diversity in all job categories trillion of GDP. And, as aviation remains a highly information sharing by governments aviation’s carbon footprint. will provide huge potential to regulated industry, governments will who have the primary responsibility strengthen our business and In 2018 the world’s airlines earned play a key role. With the 40th ICAO for security continues to lag behind Infrastructure ensure the people we need to a collective net profit of $30 billion. Assembly scheduled for late in 2019 that of safety. Moreover, many states Meeting the demand for connectivity sustain the industry. Industry revenues topped $812 we have an important opportunity struggle to implement the baseline depends on availability of billion and 8% return on invested to engage government action at the international security standards in infrastructure. In many parts of the Your association capital was generated. global standard-setting level. Annex 17 of the Convention. world we already struggle with the The industry counts on IATA. physical limitations of available Global standards developed In each year since 2010 the airline Safety The industry strongly supports the and airspace. As demand by our members through industry earned an aggregate profit. Air transport is the safest form of development of the grows that will only get more acute. IATA underpin day-to-day And since 2015 that profit has long-distance travel. And all involved Security Plan through ICAO as a operations worldwide. Our exceeded the average cost of capital. with aviation are committed to making means of taking a major forward. Reminding governments to work efficient settlement systems now While some airlines continue to face it ever safer. That was confirmed with the industry to build sufficient settle over $460 billion annually. financial challenges, this nine-year again in 2018 when the industry’s Sustainability infrastructure at affordable cost And IATA’s products and services profitability streak at the industry level safety performance showed marked The October 2018 publication of will continue to be a long-term top are tailored to help the success of marks a major shift from the sector’s improvement on the ten year average. a UN assessment of the world’s priority. And in the short term there is our members while funding industry historic boom-bust financial cycle. But two tragic crashes with the newly progress towards containing climate enormous potential to deliver greater activities. As your trade association, introduced 737 Max have change to the Paris Agreement’s efficiency and a better customer IATA’s global workforce is fully The industry’s newly found financial knocked the industry’s heretofore aims raised alarm bells. Aviation, experience with the infrastructure focused on adding value to the resilience enables it to weather shifts impressive reputation. along with all industries, is coming we currently have. businesses of our members. in the operating environment without under even greater environmental plunging into crisis. Nonetheless, we scrutiny. In Europe, the pressure is expect profits to be squeezed in 2019 particularly intense. IATA Annual Review 2019 as a result of oil price volatility, rising costs for labor and infrastructure, We must not forget that aviation was ever-increasing taxation, and a among the first industries, if not the tapering of demand. first, to outline a plan to achieve carbon neutral growth (CNG). And we are committed to achieve it from 2020. IATA Annual Review 2019 Annual Review IATA 10 10 IATA Annual Review 2019 Industry story 01 challenges despite profitability Empoweringindustry

Industry story Industry

Industry story Industry IATA Annual Review 2019 Review Annual IATA 11 2. Air tourist spending and value 1. Unique city pairs and real transport costs of trade carried by air Industry story Industry

22,000 1.6 950 8,000 Number of unique city pairs Air tourist spending ($ billion) Real cost of air transport ($/RTK, in 2014 prices) 1.5 Value of trade by air ($ billion) 20,000 850 7,000 1.4

18,000 1.3 750 6,000

1.2 Air transport connected more Passenger demand The US O-D passenger market 16,000 650 5,000 Industry story cities at lowered cost was again robust remained the world’s largest 1.1 14,000 550 4,000 In 2018, airlines continued to increase Demand for air passenger services Although China’s domestic market 1.0 the number of city-pair routes remained strong in 2018, with added the most passenger journeys 12,000 0.9 3,000 globally. Almost 22,000 city pairs are industry-wide revenue passenger in 2018, the US domestic market— 450 0.8 now regularly serviced by airlines. kilometers (RPK) increasing 7.4%. where almost 590 million passenger 10,000 350 2,000 This is an increase of 1,300 over the This represented a slowdown from journeys were undertaken in 2018— 0.7 number of city-pair connections the decade-high pace recorded in continues to be the world’s largest 8,000 0.6 250 1,000

in 2017. Strong improvements in 2017, of about 8%, but still exceeded single O-D market. China comes 2000200120022003200420052006200720082009201020112012201320142015201620172018 2000200120022003200420052006200720082009201020112012201320142015201620172018 connectivity and in costs over the the long-run industry average second, with 515 million, followed past two decades—the real, inflation- growth rate by around 2 percentage by India some distance back, at 116 adjusted cost of air transport has points. Air passenger demand was million. Unsurprisingly, domestic 3. Accessibility of 4. RPK versus world GDP growth halved in the past 20 years and underpinned by a generally solid markets dominated the rankings. 5.0 50 16 9 declined further in 2018—help to global economic backdrop, especially The top 12 markets accounted for Scheduled air pax (billion) RPK (% year on year) ensure that aviation, the “business earlier in the year, which, in turn, almost half of the total number of O-D 4.5 Number of months before next trip 45 14 World GDP (% year on year) 7 40 12 of freedom,” continues to distribute supports jobs, incomes, and business passenger journeys in 2018. 4.0 Chart 6 35 10 its array of benefits to consumers, activity, and by fierce competition in 5 3.5 suppliers, and economies globally. the industry, which helps to ensure 30 8

Chart 1 airfares remain affordable Air freight demand 3.0 25 6 3 to travelers. growth eased 2.5 20 4 Chart 4 Air freight grew slightly in 2018 1 Air transport supported 15 2 economic growth and compared with 2017. Buoyed by 2.0 10 0 -1 prosperity through China added the most the global inventory restocking 1.5 tourism and trade passenger journeys cycle, industry-wide freight tonne 5 -2 1.0 -3 Air transport is central to world There were close to 4 billion origin- kilometers (FTK) increased 9.7% in 0 -4

tourism and trade. Tourists traveling destination (O-D) passenger journeys 2017. In 2018, FTK likewise grew, 2000200120022003200420052006200720082009201020112012201320142015201620172018 2000200120022003200420052006200720082009201020112012201320142015201620172018 internationally by air are estimated worldwide in 2018. Among them, but a mere 3.4%. This was in line 12 to have spent about $850 billion in domestic routes within China again with global trade volumes, which 13 2018, an increase of more than 10% provided the largest incremental trended broadly sideways in the 5. Top 10 increasing O-D markets 6. Largest O-D air passenger markets over 2017. The additional number of increase in passenger trips, adding first part of 2018 and contracted in 600 60% city-pair connections and the lower just under 50 million journeys. The the year’s fourth quarter. The lesser China domestic 10.5

cost of air transport also boosts trade domestic markets of the United increase for air freight also reflected 5.7 US domestic 50% in goods and services and heightens States and India once more ranked the typical slowdown following an 500 India domestic 18.5 foreign direct investment and other second and third, with around 30 inventory rebuild. Indonesia domestic 9.3 400 40% important economic flows. Air million and 18 million more passenger domestic 13.3 transport accounts for only a small, journeys, respectively. Of the main The second half of the year also 300 30% domestic 12.0 less than 1%, proportion of world markets that IATA regularly tracks, saw the industry face a number of Market size (million pax) Cumulative share of total pax trade by volume but for a much larger India’s domestic market showed the headwinds. There was a moderation domestic % year-on-year growth rates 13.3 200 20% share by value, of about 33%. In 2018, fastest growth in passenger numbers, in world trade—a result in part of the Japan domestic 3.7 100 the value of goods carried by air is which increased 18.5% in 2018. That heightened trade tensions between domestic 4.5 10% estimated to have been $6.7 trillion. India recorded its 50th consecutive the and China—and Iran domestic 32.8 Chart 2 month of double-digit, year-on-year a deterioration in some leading 0 0% growth in RPK in October highlights indicators, such as the new export 0 5 10 15 20 25 30 35 40 45 50 Additional pax in 2018 (million) US dom Spain-UK China domIndia dom Brazil dom Spain dom Air travel was more accessible the consistently strong performance orders component of the global Japan dom Russia domMexico dom dom Australia dom for more people of its market Purchasing Managers Index. Having Indonesia dom Worldwide air passenger numbers Chart 5 said that, not all air freight sectors 7. Air freight versus global goods trade growth continued to rise, exceeding 4.3 were equally affected. E-commerce Industry FTK (% year on year) 25 25 billion journeys in 2018. Connecting and pharmaceuticals continued to World goods trade (% year on year) cities directly cuts the cost of air perform strongly. 20 20 transport by saving time for shippers Chart 7 and travelers. Combined with 15 15 cheaper fares, this enables more 10 10 people to fly more often. In 2000, the 5 5 average citizen flew just once every 44 months. In 2018, the time between 0 0 IATA Annual Review 2019

trips had halved, to just 21 months. -5 -5 Chart 3 -10 -10 -15 -15

2000200120022003200420052006200720082009201020112012201320142015201620172018 IATA Annual Review 2019 Annual Review IATA 8. Regional passenger and 9. Industry passenger and freight demand outcomes freight load factors Industry story Industry

10% 10% 85 56 RPK 83 FTK 54 8% 8% 81 52 79 50 Regional outcomes for December. The price of jet fuel has Regional financial 6% 6% 77 Industry story passenger and freight subsequently begun to rise in the early performance was again mixed 75 48

demand were mixed months of 2019. But the sharp and Regionally, the industry’s financial 4% 4% 73 46 Regions saw varied performance in unanticipated nature of the decline performance remained considerably 71 passenger and freight demand in 2018. at year-end means that many airlines varied. The financial performance 44 2% 2% 69 Airlines from Asia-Pacific led the way that hedge their fuel exposure are of the Passenger load factor (% of available capacity) 42 in passenger growth, which increased unlikely to have seen much benefit continued to lead the way, delivering 67 Freight load factor (% of available capacity) 9.5% in that region, followed by airlines from the price adjustment so far. an operating (EBIT) margin of 9.1% in 0% 0% 65 40 Africa in Europe and in Latin America. For Chart 10 2018. Airlines in Europe, Asia-Pacific, Europe Industry 2000200120022003200420052006200720082009201020112012201320142015201620172018 Asia-Pacific Middle East freight, it was the Latin American and Latin America also yielded Latin America carriers that outperformed, followed Airlines raised their achieved solid profitability, while carriers in by carriers in North America. Freight load factor and maintained a the Middle East and in Africa faced volumes for African airlines were gap above the breakeven level especially challenging operating 10. World oil and jet fuel prices 11. Breakeven and achieved load factors broadly stable in 2018, but this should With oil prices, interest rates, and environments. 100 100 70 70 be viewed in the context of their robust such other key costs as labor rising Chart 13

24% growth in volume in 2017. further in 2018, the estimate for the 90 90 68 68 Chart 8 industry-wide breakeven load factor On a per passenger basis, the airline increased to 65.9%. Aided, however, industry is a high-volume, low-margin 80 80 66 66 Passenger load factor by the record PLF cited previously, industry. Considering net profits on achieved a record as demand the combined achieved load factor a per passenger basis highlights 70 70 64 64 growth exceeded capacity also rose, enabling airlines to maintain this and presents an alternative 60 Available seat kilometers (ASK) a solid gap above the level required perspective on 60 62 62

$/barrel (monthly average data) (monthly average $/barrel Brent crude oil increased 6.9% globally in 2018 for financial breakeven. The gap profitability. By this measure, the Jet fuel 50 50 60 Achieved load factor (% of ATK) 60 compared with 2017, slightly lower between the breakeven and achieved industry generated a modest $6.85 Breakeven load factor (% of ATK)

than the 7.4% RPK increase in load factors is driving profitability per passenger in 2018. Regionally, 40 40 58 58 passenger demand. As a result, the and returns and was again a critical the North American carriers were 2000200120022003200420052006200720082009201020112012201320142015201620172018 passenger load factor (PLF) ticked up contributor to the industry’s financial the best performers, earning $14.66 Jan-18Feb-18Mar-18Apr-18May-18Jun-18 Jul-18Aug-18Sep-18Oct-18Nov-18Dec-18Jan-19Feb-19 14 slightly to a record 81.9%. The PLF performance in 2018. per passenger. At the other end of 15 has risen more than 10 percentage Chart 11 the spectrum were airlines in Africa points over the past 15 years. And and Latin America. In aggregate, they 12. Industry return on investment this increase is behind the improved Another solid financial averaged a loss of $1.09 and $1.65, and the cost of capital 13. Regional profit performance industry financial performance of performance generated an respectively, for every passenger recent years. Available freight tonne above cost of capital return for they carried. 12 12 10 Cost of capital (WACC) % of invested capital 9.1 Chart 14 kilometers (AFTK), meanwhile, grew the fourth consecutive year 11 Return on capital (ROIC) % of invested capital 11 4.5% year on year, easily outpacing The global airline industry 10 10 8 the 3.4% growth in FTK. The freight experienced another year of robust 9 9 5.8 6.2 load factor, therefore, fell about 1 financial outcomes in 2018. IATA 8 8 6 percentage point in 2018, partly estimates that airlines generated a 7 7 4.5 unwinding 2017’s gain. net posttax profit of $30 billion on 6 6 4 5 5 2.7 Chart 9 an operating (EBIT) margin of 5.8%. 4 4 2 1.5 These outcomes are modestly lower 3 3 Operating margin (% of revenue) margin Operating than for 2017 and, as such, reflect 2 2 0 Oil prices had a bumpy ride 2018’s more challenging business 1 1 The jet fuel price opened the year environment and particularly its rising 0 0 -2 -2.0 under review about $80 a barrel and cost pressures. 2000200120022003200420052006200720082009201020112012201320142015201620172018 was initially stable. At the end of Africa Industry Europe the year’s first quarter, though, the Despite a moderation in industry- Asia-Pacific Middle East North America Latin America fuel price began to track upward, wide returns, to 8.0%, the air increasing more than 20%, to peak transport’s return on capital 14. Airline profitability per passenger

at $96 per barrel in October 2018. In exceeded its average cost of capital, 16 14.66 November and December, however, which increased to 7.3%, for the 14 market sentiment turned sharply down fourth consecutive year. Creating 12 amid signs of a deteriorating global value for investors on a more 10 economy and strong supply from US sustainable basis than the industry 8.20 IATA Annual Review 2019 tight oil producers. The price quickly has managed to do historically will 8 6.85 tumbled, falling more than 25% to be an increasingly crucial element in 6 4.74 end the year averaging about $72 in attracting the capital necessary to 4 fund fleet renewal and replacement in 2.77 Net post-tax profit per passenger ($) per passenger profit Net post-tax 2 the years ahead. Chart 12 0 -2 -1.09 -1.65 IATA Annual Review 2019 Annual Review IATA

Africa Industry Europe Asia-Pacific Middle East North America Latin America Safety Safety

02 Safety Continuously working to improve safety 16 17 ver the past decade, the Developments in 2018 industry has witnessed In 2018, there were 11 fatal accidents a 54% improvement in that resulted in 523 fatalities among its all-accident rate and passengers and crew. This contrasts a 78% improvement in its jet hull with an average of 8.8 fatal accidents loss accident rate. The trend for and approximately 234 fatalities per Othe “business of freedom” is clearly year in the previous five-year period, toward fewer and less-lethal airline from 2013 to 2017, and with 2017’s accidents. Fluctuations, though, do record-low 6 fatal accidents and occur from year to year. 19 passenger and crew fatalities. Notwithstanding 2018’s higher This was the case for 2018, when 4.4 numbers, the year’s performance still billion passengers flew safely on 46.1 means that on average a passenger The aviation million flights. The jet and could take a flight every day for hull loss rates, the all-accident rate, 16,581 years before experiencing industry is and the fatality risk all improved a fatal accident in which all on compared with their performances board perish. determined to over the preceding five years. The improve on its industry, however, did not match its The all-accident rate (measured in extraordinary performance of 2017, accidents per 1 million flights) in safety record each its safest-ever year, during which 2018 was 1.35, the equivalent of 1 successive year. there were 6 fatal accidents and 19 accident for every 740,000 flights. fatalities, none of which occurred in This was an improvement over passenger jet operations. the all-accident rate of 1.79, or 1 accident for every 559,000 flights, in Every accident, of course, is a the 2013–2017 period, but a decline tragedy. And that makes the aviation compared with 2017’s record-low industry all the more determined to all-accident rate of 1.11. improve on its safety record each successive year. IATA Annual Review 2019 Annual Review IATA Safety Safety

The same pattern held for major safety aside, everyone in air transport The regional story Industry and IATA activities in Lithium batteries in portable accidents. The 2018 rate for major is shocked and challenged by the With the exception of Latin 2018 and early 2019 LOC-I, CFIT electronic devices jet accidents (measured in jet hull crashes of MAX aircraft America and the Caribbean and the IATA’s safety work is guided by a six- Safety To better understand the level of losses per 1 million flights) was 0.19, operated by Lion Air (29 October Commonwealth of Independent point safety strategy. Safety audits passenger awareness regarding the the equivalent of 1 major accident 2018) and Ethiopian Airlines (10 March States (CIS), every region globally remain a cornerstone of measuring and Midair safety risks of the lithium batteries for every 5.4 million flights. This was 2019). These two tragedies, occurring reported improvement in its 2018 performance and expanding best used in portable electronic devices an improvement over the rate for only four months apart under all-accident rate compared with the practice to more airlines. Collisions (PEDs), IATA surveyed passengers the previous five years, from 2013 what appear to be broadly similar rates for the preceding five years. in three major markets in 2018. to 2017, of 1 accident for every 3.4 circumstances, led to the global North Asia and Africa continued their Unmanned aircraft systems Passengers were queried on their million flights but not as good as the grounding of this model of aircraft. excellent recent records of zero jet In 2018, there was an increase in the understanding of and compliance rate of 0.12 in 2017. hull losses. Europe and the Middle number of reported occurrences with airline requirements for the safe IATA respects the decision of East and (MENA) also of small drone aircraft—so-called handling of lithium battery powered Another way to look at aviation’s regulatory authorities globally to had zero hull losses in 2018. unmanned aircraft systems, or UAS— devices on aircraft. 2018 safety performance is to ask, ground the 737 MAX. And though operating irresponsibly near airports what would have happened if the IATA has no role in the process, it Turboprop operations still present and aircraft. The most significant The majority of travelers felt that industry had performed at 2013 looks to the aircraft manufacturer a challenge. But it is important to events took place at ’s they were well-informed about the levels? The answer is that it would to cooperate with the US Federal note that turboprop operations in all Gatwick and Heathrow Airports 80% regulations. However, approximately have experienced 109 accidents Aviation Administration (FAA) and regions except MENA saw improved before the Christmas holidays in one-third of travelers surveyed, in 2018, rather than 62, with 38 hull other safety regulators in developing performances compared with the 2018. The UAS sighting at Gatwick 10% particularly business travelers, were losses, instead of the 12 that did a safe and robust solution that previous five years—and the spike in Airport resulted in the cancellation of still packing spare batteries and power occur, simply based on the greater addresses all identified concerns. the MENA rate was the result of only 1,000 flights. In 2018, loss of banks in checked luggage despite the number of flights operated in 2018. At the same time, there is no one accident. , however, safety prohibitions. In response, IATA The industry’s solid progress in substitute for thorough and timely flew just 18% of the sectors in 2018 IATA supports the investigation of control–inflight launched a campaign to help airlines investigations of both accidents. and yet accounted for 45%, or 5 of 11, such incidents and the development (LOC-I) and communicate to passengers the right Safety is a top priority in aviation, of the fatal accidents globally. of measures to safeguard against and wrong way to pack PEDs before and what is learned from every unlawful interference by UAS, controlled flight they arrive at the airport. accident investigation is vital to the Detailed information on the industry’s such as the infringement of into terrain (CFIT) 18 efforts to further safety. safety performance can be found in restricted or sensitive airspace accidents accounted IATA Operational Safety Audit 19 the IATA 2018 Safety Report. in the area surrounding airports. The IATA Operational Safety Audit Any measures should support for more than (IOSA) is a global standard for aviation continuous monitoring and should 80% of fatalities, safety. IOSA is mandatory for IATA only be implemented following a risk membership, but fully 34% of the assessment. even though they airlines on the IOSA registry are non- (per million departures) represented IATA members who appreciate the Jet hull loss rates by region of operator In 2018, IATA issued a technical value of IOSA. bulletin highlighting key less than 10% of 2018 considerations for implementing the accidents. At the end of 2018, moreover, 14 2013–2017 technology. IATA is involved, authorities worldwide recognized

Commonwealth of meanwhile, in discussions within IOSA as the complement to the Independent States (CIS) ICAO panels on runway incursions national safety oversight programs by, and the irresponsible use of, UAS of 63 countries. (EU) 1.19 near airports. regulations, for instance, accept IOSA 1.00 as a means of safety compliance In 2019, IATA is intensifying its focus in the Third Country Operator 0.00 0.00 on raising safety awareness among authorization process. 0.10 UAS users, specifically regarding the 0.14 0.00 There were 15 Middle East and irresponsible use of UAS in proximity 0.22 North Africa Europe to airports and aircraft. IATA will also runway excursions, North Asia expand its work on UAS integration 0.00 into airspace in collaboration with two of which North America 0.72 UAS industry innovators. were fatal, with

0.32 0.00 IATA Annual Review 2019 0.37 0.19 0.76 1.06 0.29 0.51 Africa

Asia-Pacific

Industry

IATA Annual Review 2019 Annual Review IATA fatalities the Caribbean Latin America and 52 Safety Safety 4,776

ISAGO audits vs findings (As of December 2018) Ultimately, IATA’s Turbulence Aware All GADM data contributors have International Airline Audits Findings platform will provide an open solution access to aggregated and de- Training Fund that enables any operator to share identified reports and analyses, In 2018, the International Airline its data through a global turbulence including Training Fund (IATF) contributed data repository. Every participating to developing the skills and carrier will have access to every industry accident and incident data strengthening the capabilities of other carrier’s real-time turbulence and analysis and operational reports 3,435 aviation industry professionals data, and greater preflight and (pilot and reports) in from developing nations. Of the 160 in-flight situational awareness will the Safety Trends Evaluation Analysis training events delivered by the IATF be achieved. Additional benefits & Data Exchange System (STEADES); during the year, 110 emphasized will include a decline in turbulence- aircraft ground damage reports , particularly in Africa. related injuries and improved and analyses in the Ground Damage 983 911 903 operational efficiencies, including Database (GDDB); In addition, under the auspices of 774 reduced fuel burn, through more de-identified flight information the IATF, five new airlines benefited 253 252 215 245 accurate flight planning. from over four million flights in the from the IOSA Implementation 221 Flight Data eXchange (FDX) and, Training Initiative (IOSA-ITI). IOSA- Global Aviation Data with the imminent introduction ITI beneficiary Congo Airways, Management of the Incident Data Exchange moreover, was admitted to the IOSA 2014 2015 2016 2017 2018 Because the number of accidents (IDX), enhanced data analytics and registry and became an IATA member. is in decline, techniques to improve benchmarking capabilities with New programs launched by the IATF aviation safety are increasingly aggregated, de-identified global in 2018 support IOSA is not a guarantee against an IATA Safety Audit for Auditors record their findings in shifting to data-driven analyses of safety information. accident. Its efficacy is, however, Ground Operations a new style that results in a more trends and of the interaction between IOSA renewals by African carriers, evident when comparing aggregate The first audits in accordance with informative audit report than in the the links in the air transport chain. The In addition, IATA has been working carriers preparing for the IATA safety performance levels. In 2018, the new IATA Safety Audit for Ground past. And those reports are then goal is to expose potential risks and with more than 100 aviation safety Standard Safety Assessment, the all-accident rate for airlines on Operations (ISAGO) model occurred made available to airlines, which determine risk mitigation strategies. professionals on the IATA Safety network development in Africa, and the IOSA registry was more than in 2018. The new model introduced a use the information to complement Incident Taxonomy (ISIT). ISIT will developing the leadership potential 20 two times lower than that of non- number of significant changes: their oversight obligations and risk This is the focus of IATA’s Global support the IDX and provide the of women in African aviation. 21 IOSA airlines, at 0.98 versus 2.16, management of outsourced ground Aviation Data Management (GADM) ability to better identify global safety and more than two and a half times Moving to a corps of independent, operations. program. GADM is one of the risks to a more granular degree than better over the five years from 2014 professionally trained and certified world’s most diverse aviation safety previously possible. to 2018. auditors and away from a pool of Turbulence information exchange programs. voluntary auditors Turbulence is a well-known safety It captures data from more than The IOSA program is undergoing a Restructuring the cost model to hazard; passenger and cabin crew 470 industry participants, through digital transformation that will enable ensure a more even distribution of injuries related to in-flight turbulence accident and incident reports, ground IOSA-registered airlines to monitor program expenses between ground are climbing. So, in 2018, IATA damage occurrences, and flight each other’s safety performance and service providers (GSP) and airlines addressed this safety hazard with data. The result is a comprehensive, to benchmark their performance on Applying a new auditing the introduction of Turbulence cross-database analysis in support a collaboration platform. In the long methodology focused on standards Aware, a global platform for sharing of a proactive, data-driven approach run, the digital transformation will implementation and the alignment automatically generated turbulence to advanced trend analysis and also help to focus auditing on areas of the ground operations processes reports in real time. A number of predictive risk mitigation. with the highest safety risks. between a GSP’s headquarters and airlines are conducting trials of its network of ground operations Turbulence Aware in 2019, and IATA plans to launch the platform Some 245 audits of GSP were globally in 2020. conducted by independent auditors trained and qualified by IATA as IATA Turbulence Aware consolidates, members of the IATA Charter of standardizes, and accesses in real Professional Auditors. Stakeholder time objective turbulence data IATA’s Turbulence Aware feedback confirmed that the new collected from multiple airlines approach produced a higher-quality worldwide. The platform’s purpose platform will provide and more-thorough assessment of is to grant airline pilots and airline an open solution to the industry a GSP’s management, oversight, operational center personnel a and provision of ground services. detailed, real-time awareness of that enables any operator to The independent auditors raised an turbulence. This IATA initiative is share its data through a global IATA Annual Review 2019 average of about 20 findings per audit leading the air transport industry’s turbulence data repository. (see chart above). shift to data-driven turbulence mitigation. IATA Annual Review 2019 Annual Review IATA 22 22 IATA Annual Review 2019 Security 03 03 approach focused outcome- a risk-based, Establishing Security S standards, butanoutcome-based and cargo traffic. IATA global supports the fast-growing levels ofpassenger threats andanticipate theimpactof mustlearnfromindustry evolving on aone-size-fits-all approach. The Aviation policy security cannot rely and economies. minimizing disruptionto passengers of passengers andcrew while measures thatmaximize theprotection to thrive. Thiswillenablerisk-mitigation however, ifthe“businessoffreedom” is Even greater collaboration isneeded, travel.long-distance accessible andconvenient form of safest andmostsecure butalso an isnotonlythethat airtransport Aviation Plan(GASeP). Security measures alignedwiththeGlobal all stakeholders ensured thatthese Dialogue andcollaboration among smoother introduction ofmeasures. weaponized powders witnessed afar comply. Asubsequent threat from confused, andairlinesstruggledto Passengersin theMiddleEast. were cabins onsome flightsoriginating electronic devices (PEDs)inaircraft banned thecarriage oflarge portable United States andtheUnited Kingdom notice orinputfrom industry, the in 2017when,withlittleadvance This wasthelesson thatwasrelearned minimal disruption. goalsofincreasedtwin and security can beimplemented to achieve the how to ensure thatthese measures haveairports theoperational know- measures.security Airlines and access to information thatdrives Governmentsequal partners. have work togetherand theindustry as best beachieved whengovernments security. Butasecure can industry responsibility forprimary aviation makes clear, governments have the CouncilResolutionUN Security 2309 to stay aheadofevolving threats. As In 2018,aviation continued security Developments in2018 has auniquemixofchallenges. approach isessential, asevery location and the industry thatensuresand theindustry ofgovernmentpartnering responsibility. Butitisthe isagovernmentecurity genuinely secure airtravel. risk information sharing required for of thedegreeshort ofmultilateral step intherightdirection. Yet itfalls sharing standard inAnnex 17isa sourced intelligence. The information- are forced to rely oncommercially information. Butmany airlinesstill exposed gapsinthesharingofthreat since theshootingdown ofMH17 There hasbeensome improvement remainsindustry achallenge. governments andtheairtransport governments between andparticularly Information sharingamong Information sharing ahead ofthethreat trajectory. stakeholders, willmove theindustry of GASeP continue to resonate with are applied.Provided theprinciples that thebaseline measures security developing counterparts to ensure comprehensive assistance to their developed countries to provide more There is,moreover, anurgent needfor aviation programs. security standards intheirnational of countries to meetglobal that underscores theresponsibility at the40thICAO Assembly in2019 GASeP. IATA aresolution willsupport baseline requirements thatunderlie implemented theICAO Annex 17 Many nations,however, have notfully aviation security. catalyst for awave ofimprovements in period,GASeP hasbeentheshort address andmitigate threats. Ina national aviation efforts security to first framework time—a for aligning Owing to GASeP, nationshave—for the assurance foster innovation capability response five priorities: the auspices ofICAO. GASeP identifies governments agreed to GASeP under ofnational 2017 whenamajority enormous step forward inNovember Global aviation efforts security took an Global Aviation Plan andSecurity  Increase cooperation andsupport Improve oversight andquality Improve technological resources and Develop culture security andhuman Enhance riskawareness and

screening procedures atairports. bags andthelackofconsistency in such aslaptops andPEDs,from cabin are having to remove personal items, of traveling. Theirbiggestfrustrations and astheworst part consistently security pointto airport Passenger Survey, passengers though, hassuffered. InIATA’s Global aviation more secure. Efficiency, since 9/11haswithoutdoubtmade The investment inaviation security solutions Sustainable risk-based manner. threats inatimelyandeffective prevent, detect,andrespond to stakeholders—public andprivate— and thatwillhelpallaviation threat andvulnerabilityinformation, relationships withgovernments on will enhance theircollaborative carriers by late 2019.Sodoing Operational SafetyAudit (IOSA) IATA members andregistered IATA applicationsecurity available to all The planisto make thisonline procedures.changes onsecurity emerging threats andtheimpactof to dealwith enable theindustry oftheworld.inturn,will That, parts environmentssecurity indifferent the earlydetection ofchangesto highly secure tool willprovide occurrence data.Thissophisticated, the exchange ofcritical security applicationsecurity thatfacilitates attempt atdeveloping anonline ICAO andcountries inafurther In parallel, IATA isworking with threats, vulnerabilities, andrisks. sharing ofinformation regarding together onthe the industry of bringinggovernments and to emphasize theimportance 2019 provides anopportunity The 40thICAO Assembly in made aviation more secure in aviation since security 9/11 has without doubt 9/11 haswithout doubt The investment the air transport industry.the airtransport approach to cybersecurity for guidelines for acomprehensive strategy inearly2020thatwillprovide these IATA partners, willdeliver a sectors toOnbehalfof dojustthat. stakeholders,industry andother IATA isworking alongsideairlines, manipulations. critical information againstintentional communication, data,andother is aneven-greater needto protect footprint ofaircraft increase, there the computerization anddigital electronic communication. As system to system by way ofbasic virus ormalware, can travel from nefarious threats, suchasacomputer Discrepancies; errors; or, worse, Modern aircraft are interconnected. precautions for aircraft systems. the highestsafety standards and demands The aviation industry Cybersecurity page 46). travel more convenient (see OneID will make more security efficientand journey. believe Thepartners thatthis all touch pointsalongapassenger’s make verification identity possibleat technologies. These technologies will biometric andblockchain platformsusing digital identity and Tourism Councilondecentralized IATA isworking withtheWorld Travel especiallycompelling.Stop Security Technology makes thecase for One- program.Security to take advantage oftheOne-Stop European thathave airports elected check whenthey transfer flightsat helps passengers avoid aredundant and theEuropean Union,for instance, An agreement Singapore between implementation of One-Stop Security. Happily, 2018sawtheincreased Progress iswelcome. insecurity

Security IATA Annual Review 2019 Review Annual IATA 23 Regulation and taxation

Regulation

Regulation and taxation Regulation 04 and taxation

Numerous actions were undertaken in 2018. Industry advocacy dissuaded the government of Mexico Encouraging the from applying domestic aviation consumer laws to international carriers. Malaysia was induced to abandon a proposal to cap ticket right framework fares. And further regulations were opposed in ; in the Arab ir transport cannot Specific regulatory improvements Civil Aviation Commission (ACAC) generate global prosperity were wide ranging. They spanned the region of the Middle East;, and, as and thereby fulfill its role as reduction of administrative burdens a result of the FAA Reauthorization the "business of freedom" through better European Union (EU) Bill, in the United States. In all such without an efficient and enabling agency collaboration in EU countries, cases, IATA partnered with local regulatory system and, specifically, the adoption of global standards industry and stakeholders to lobby Afair and reasonable taxation. for electronic communications for smarter regulation principles to Regulation should be developed and in Brazil, and the introduction of be used to inform decision-making. It implemented using smart principles, globally harmonized ground-handling is particularly vital that governments, and excessive or poorly targeted regulations in India. regulators, and the flying public taxation should be avoided. understand the balance between 24 IATA’s launch of a regulatory protecting consumer rights and 25 IATA’s smarter regulations deliver competitiveness benchmarking providing sustainable air services. clearly defined, measurable policy toolkit will help to rank the objectives in the least burdensome “smartness” of nations’ approaches Aviation’s growth way. A policy framework based to regulation across a number IATA’s 20 Year Passenger Forecast on smarter regulation principles of policy areas. This will, in turn, predicts a doubling of passenger positions a country for sustainable inform industry priorities in 2019 demand over the next two decades. aviation growth. and beyond (see "Regulatory Harder to predict are the challenges Competitiveness Benchmarking" of that growth and of the then Developments in 2018 next page). global political environment. IATA, Throughout 2018, the industry therefore, produced its Future of engaged in coordinated advocacy Consumer protection the Airline Industry 2035 report to that resulted in adherence to Airlines have always worked hard to assist airlines and policy makers smarter regulation principles in retain customers in an ultracompetitive with strategy development. The several countries. The Malaysian marketplace. In an age of social media report has been used by a number Aviation Commission introduced an and citizen journalism, any incidents of carriers and governments (New airports quality service framework where standards of customer care Zealand's, for example) in framing that ensures more transparent and are perceived to fall short can rapidly policy and strategy. objective policy setting and airline go viral. Airlines, therefore, are highly involvement in decision-making. And incentivized to offer good customer Brexit in Brazil, the government introduced service and, if problems occur, to try Throughout 2018, the industry guidelines for regulatory quality. to put them right. warned the UK government and EU ICAO, meanwhile, agreed to work authorities of the implications for air with IATA on implementing good Airlines have agreed to core transport of a “no-deal” exit of the regulatory practices worldwide under principles for passenger rights. UK from the European Union. The the auspices of its "No Country Left When the circumstances of a flight concern was that failure of the British Behind" initiative. delay or cancellation are within an parliament to accept an interim Brexit airline’s control, airlines agree that agreement would result in cancelled IATA Annual Review 2019 passengers have the right to care flights and chaos for the industry and and assistance in the case of delays passengers. and rerouting and to refunds or other monetary compensation in the case of cancellations. IATA Annual Review 2019 Annual Review IATA Regulation and taxation Regulatory Competitiveness Benchmarking

Although the economic benefits of aviation The five connectivity are well documented, the link to competitiveness providing governments with policy guidance to benchmarks are Airline and IATA advocacy regarding slots and taxation maximize those benefits is less well understood. 1 Passenger facilitation IATA prepared a regulatory competitiveness benchmarking tool in 2018 that is designed to 2 Cargo facilitation Slots provide governments with an analysis of the More than 200 airports worldwide 3 Supply chain Regulation and taxation Regulation principal areas of aviation competitiveness and are slot constrained, meaning management with the priorities they should focus on to improve that they have insufficient 5 their air transport–related competitiveness. The 4 Infrastructure capacity to meet demand at all 3 first dozen reports, focused on European nations, hours of the day. This number is 5 Smarter regulations set to rise substantially over the are planned for release in 2019. 1 coming decades because airport construction is failing to keep pace with increased demand for aircraft movements. Globally applied rules 2 Industry advocacy and faster and more efficiently than ever. for the use of what capacity there is communication and pragmatic MC99 also ensures that airlines at constrained airports will therefore political and regulatory discussions benefit from streamlined claims become increasingly important. resulted in the EU and UK agreeing management and heightened 4 to maintain the bulk of the current processing regarding their liability IATA’s Worldwide Slots Guidelines is air services agreement for a period for passengers, baggage, and cargo. the global standard for the policies, of up to a year, even in the event of a principles, and procedures of airport “no-deal” Brexit. In March 2019, the During 2018, countries including slot allocation and management. The EU granted an extension to the UK’s , , , Uganda, independence of the slot coordinator Brexit process to enable a political and Vietnam ratified MC99. The total and the harmonized, consistent consensus to be found. It is unclear number of parties to MC99 is now application of the WSG provides for when or if Brexit will occur, but the 136, representing just over 97% of the certainty, sustainability, flexibility, industry remains vigilant to ensure passenger traffic. The campaign and transparency that the industry 26 that connectivity is maintained and to promote MC99 ratification is requires and that passengers benefit 27 disruption to passengers and cargo effectively complete, though efforts to from, including dependable services Slots minimized. encourage countries that have not yet and an expanding route network. 1. Africa and the Middle East 3. China 5. Europe ratified MC99 to do so will continue. IATA worked with the authorities in IATA organized a session in March Europe remains the world’s most Single African Air Comprehensive strategic review Iran in 2018 to introduce and train 2019 for airlines to discuss with significant region for congestion, Transport Market Rebalancing the value chain of the WSG continued in 2018 in stakeholders in the principles of its the Civil Aviation Authority of China accounting for just over 50% of In January 2018, the Single African Original Equipment Manufacturers conjunction with Airports Council Worldwide Slot Guidelines and to (CAAC) the CAAC’s slot allocation all Level 3 coordinated airports. Air Transport Market (SAATM) was (OEMs) are crucial not only to the International (ACI) and the Worldwide develop regulations based on the WSG. regulation published on 1 April IATA has worked closely with the launched as an initiative of the African supply but also the maintenance Airport Coordinators Association Progress has stalled, however, because 2018. The intent was to foster (EC) to see Union to implement the principles of aviation equipment. But airlines (WWACG). The review also saw the of international sanctions on Iran. understanding of the new allocation EU Slot Regulation 95/93 applied by of the Yamoussoukro Decision and believe that this market has been start of a trial of an earlier slot return policy and of capacity management all member states and to determine create a single unified air transport tipped for much too long in the deadline to assess its feasibility and 2. India developments ahead of the opening interest in reviewing the EU Slot market in Africa. The SAATM’s OEMs’ favor. In July 2018, following its benefits for slot planning. Further Inconsistencies in airport slot of ’s new airport, Daxing Regulation. development continued throughout 18 months of negotiations, IATA enhancements to the WSG will be coordination at airports in India where International, in October 2019. 2018, with industry support at the announced an agreement with made in 2019 and will include sections concession agreements have been The EC proposed in September 2018 technical and political levels. As a CFM, the engine manufacturing on slot performance monitoring and awarded have led IATA to work with 4. The to end seasonal changes to European result, the African Union incorporated partnership of GE Aviation and on airport capacity declaration (see the Indian Ministry of Civil Aviation Brazil followed its engagement with IATA daylight savings time from 2019 and circulated, for example, the Safran Aircraft Engines, that will map on opposite page). to encourage the harmonization of with the decision to align with the WSG onwards while leaving member states entirety of IATA’s smarter regulation ensure beneficial competition in the airport slot coordination. IATA is also and eliminate the harmful links between free to decide whether to permanently principles for use by regional aftermarket for the maintenance, Taxation working with the authorities in India punctuality and historic slots in Brazilian apply summer time or winter time economic organizations in devising repair and overhaul of CFM’s and GE’s Excessive taxes on aviation affect to establish a single, centralized, Slot Regulation Resolution 338. beginning in summer 2019. This the regulatory texts that underpin engines. The agreement includes the ability of air transport to meet independent slot coordinator tasked proposal would have significant the SAATM. important new Conduct Policies that demand and impede economic with slot coordination for all Level 2 Colombia worked in 2018 toward negative impact on flight schedules will assure airlines of greater freedom growth. Aviation taxes, moreover, and Level 3 airports. the full implementation of its slot and planning. IATA as a result Convention 1999 to use non-CFM parts and to have should not be used to subsidize regulation. That regulation is fully requested the European Council and 1999 (MC99) maintenance work performed by other modes of transportation or aligned with the WSG and was issued Parliament and other stakeholders is an example of smarter regulation. third-party shops. The agreement to make up budget deficits. IATA in 2017 to manage congestion issues to either reject the proposal or to MC99 sets out rules on airline demonstrates what can be achieved and its members are running active at the country’s airports. extend the period for implementation IATA Annual Review 2019 liability during international carriage through pursuing legal options and campaigns to this effect in numerous to permit the industry to adapt and to that deliver significant benefits for all collaboration to achieve a win-win countries (see map on next page). Mexico recognizes the need to coordinate its approach. stakeholders. It ensures protection outcome. IATA is encouraging other align with global standards. But for passengers and is a prerequisite participants in the aftermarket for the industry continues to await the to cargo transformation initiatives, aviation equipment and services country’s full implementation of the such as electronic air waybill (e-AWB) to adopt policies similar to those WSG to benefit the management of IATA Annual Review 2019 Annual Review IATA and e-freight, that deliver shipments embraced by CFM. congestion at its airports. Regulation and taxation Solutions from IATA Consulting Unruly passengers The unruly behavior of a minority of passengers IATA Consulting has comprehensive experience of the full cannot be allowed to compromise flight safety array of aviation-sector business challenges. It draws on 9 or disturb the journeys of the majority of IATA’s more than 70 years of service to the airline industry customers. The industry takes a zero-tolerance and thus is unrivaled in offering its clients the best solutions.

Regulation and taxation Regulation 6 approach to disruptive incidents. IATA Consulting’s depth and breadth of aviation industry knowledge enables it to help its clients maximize the value of In 2017—the latest year of available their operating models, realize their growth ambitions, and gain 8 4 statistics—there were 8,731 unruly passenger insights that translate into sustainable competitive advantages. 3 incidents voluntarily reported to IATA. This 2 10 amounts to 1 incident per 1,053 flights. IATA Consulting’s projects in 2018:

7 The industry strategy for dealing with 5 unruly passengers involves improving the prevention and management of incidents. 15+ CAAs and 1 This includes enhancing the legal deterrent. governments Montreal Protocol 2014 (MP14) provides Civil aviation restructuring legal deterrent powers, but 22 nations must Tourism and benefits of ratify MP14 before it can come into force. In aviation studies 2018, countries including Ghana, , projects Capacity enhancement Kuwait, Malaysia, , and Singapore 145+ ratified the protocol. Turkey’s ratification in March 2019, brings the total number of parties 30+ airlines Taxation to MP14 to 19. Strategic planning 1. Bali 4. Japan 7. Safety enhancement The Governor of Bali is Despite industry efforts to explain IATA held constructive discussions Irresponsible alcohol consumption remains Route analysis considering the imposition the negative consequences to the with the Philippines’ Tourism one of the top three causes of unruly behavior. NDC consulting services 28 of a $10 levy per foreign tourist to Japanese government, a tourism Infrastructure and Enterprise Zone In the UK, IATA partnered with Airports countries 29 fund environmental and cultural tax of ¥1,000 ($9) per passenger Authority to discuss a proposed Council International (ACI) and the Travel Retail 90 conservation. No official proposal has departing on international flights was travel tax for non-Filipino travelers. Foundation on a campaign to discourage 50+ aviation been issued, but the idea was widely introduced in January 2019. alcohol consumption at the airport and stakeholders covered in the media. In an effort to 8. Spain onboard. The industry also defended its right (financial institutions preempt the levy, IATA submitted a 5. Malaysia IATA was instrumental in obtaining to serve alcohol responsibly in the face of and ANSPs) protest letter in January 2019. In November 2018, the government an important clarification from Spain calls for regulations to restrict this ability. A Pharmaceutical handling of Malaysia announced its intention to confirming that domestic segments robust response, for example, was submitted Business planning 2. Bangladesh introduce an air passenger departure of international air transport were to to the UK Home Office Consultation on Airside airports Without warning, the Bangladeshi levy on international passengers be exempt from VAT. This ruling is in Licensing at Airports in England and Wales. 40+ government removed air transport effective 1 June 2019 of RM20 or effect as of July 2018. Traffic studies from the list of value-added tax (VAT) RM40 depending on passenger Human trafficking Ground handling exemptions in its 2018 budget and destination. IATA registered its concerns 9. Sweden The trade in people is an illegal industry worth Passenger terminal optimization levied a 15% VAT on international with the Ministries of Finance, Transport On 12 December 2018, a coalition $32 billion a year that the United Nations Security enhancement transport on a prospective basis and and Tourism, and Arts & Culture. The of Swedish Moderates and Christian Office of Drugs and Crime estimates involves retroactive to 2009. IATA and the tax contravenes ICAO principles and Democrats adopted a budget the trafficking of almost 25 million human local Board of Airline Representatives negatively affects passenger demand proposal abolishing Sweden’s beings annually. A significant number of are challenging the government to and, consequently, Malaysia’s economy. aviation tax effective 1 July 2019. traffickers are suspected of taking advantage reverse this decision. On 18 January 2019, however, of the global air transport network. 6. the country’s newly appointed 3. Bermuda Airlines and IATA responded to government coalition stated that it The aviation industry is determined to play A pre-budget report from the a public consultation on a green would maintain the ticket tax after all. its part in preventing this and to help law Bermuda government suggested aviation tax in the Netherlands. IATA’s enforcement identify traffickers and their imposing a goods and services protest letter to the Dutch Ministry 10. victims. At the 2018 IATA AGM, a resolution tax (GST) of 5% on all air tickets. In of Finance notwithstanding, in The Thai government is considering was unanimously passed committing airlines late January 2019, IATA argued in February the Netherlands presented a mandatory travel insurance levy to sharing best practice and to training staff writing that the GST would contradict a paper on aviation taxation to the EU on foreign visitors. IATA is arguing, to spot instances of human trafficking. The international taxation standards if Finance Council. The paper invited EU however, that this contravenes ICAO resolution also called for improved reporting IATA Annual Review 2019 imposed services to and from members to consider a coordinated principles and that such a levy should protocols to be put in place by governments. Bermuda and would negatively affect approach to aviation taxation within be collected by tour operators where Tutorials and guidance materials were the local economy. The government’s the EU and was supported by Belgium tourists engage in high-risk activities. published, and awareness raising through the 2019–2020 budget statement of 22 and Sweden. In the event the EU-wide media and social media continued throughout February made no mention of the tax does not happen, the Netherlands 2018, the focus, together with ACI, being on GST on air tickets. has announced that it will introduce a International Human Trafficking day on 30 July. IATA Annual Review 2019 Annual Review IATA ticket tax in 2021. 30 30 IATA Annual Review 2019 Infrastructure A connectivity future of air the Protecting traffic management (ATM) systems. ofthefuture;airport and at competitive andtransparent prices; needs; capacity governance; charges atairports; requiresindustry infrastructure that IATA madeclearthattheairtransport aligned to market demandprojections. that infrastructure investments are In 2018,IATA campaigned to ensure connectivity. customer serviceandto boostair iscritical topartners maximize collaboration withinfrastructure a crisisislooming. Theindustry’s doubling ofdemandby 2037,and is notkeeping pace withanexpected Infrastructure development, though, and economic benefitsglobally. is to continue to deliver itsmany social the“businessoffreedom,”transport, for Thisisessential ifair airtransport. 05

underpins modernized, efficientair shapes acommon visionofthe secures areliable supplyofjetfuel investment aligns airport withairline promotes sustainableairport drives cost-efficiency and lower accommodates growth indemand; to meettherisingdemand cost-effective infrastructure high-quality,sufficient, and irlines require access to Infrastructure private sector are beingquestioned. of proposed transfers airport to the traction, andanincreasing number infrastructure monopoliesisgaining of privatization involving aviation Fortunately, arecognition oftherisks for infrastructure investment. customer service, andfinancing than improved efficiency, better gains for government coffers rather afocusoften onshort-term cash governments. The driver for thisis is beingpushedby many privatization orcorporatization Airport Developments in2018 and consumers. much-needed infrastructure for airlines and increases thecost ofdeveloping decision-making thatslows down airlines. Also problematic ispolitical inputfrom without thenecessary infrastructure investment isdetermined Too andATM airport often, monopolies is aviation infrastructure privatization involving of therisks of A recognition gaining traction

investments based ondemand. and triggers appropriately timed infrastructure designandconstruction agreed master planthatguides airport elsewhere, mustfollow anairline- investment, however, inEurope and a year by 2035.Any infrastructure forcapacity upto onemillionflights Eurocontrol in estimates ashortfall move faster. InEurope, for example, expansionAnd capacity must and inthefuture. improve operational efficiency, now deliver adequate levels ofservice to demand to facilitate growth andthat facilities thatbalance with capacity be addressed. Airlinesneedfunctional a majorconcern thaturgently needsto lack ofrunway andterminal is capacity constrained worldwide. airports The There are around 200capacity- Political decisions including customers. in increased costs users, for allairport Australia andPortugal. Thishasresulted regulations privatizations in for airport remains slow inensuringfit-for-purpose and SaudiArabia. Conversely, progress include , Brazil, Kuwait,, of airlinesandpassengers. These are inplace to safeguard theinterests that economic regulatory processes to IATA andairlineconcerns to ensure A numberofcountries are responding and passengers. consideration oftheimpactonairlines the government andwithoutbalanced privatization based onthebestdealfor to bechallengedonselecting bidsfor questioned. Group ADPfor Paris isbeing airports of theproposed privatization of further privatization ofairports. the government notto pursue the and consumer groups compelled

In India,thegovernment continues In France, theobjectives andbenefits In Canada,concerns raised by airlines

airport ofthefutureairport A common visionofthe international gateway. becoming acompetitive regional and City. Thiswillprevent Mexico from inMexicobuilding ofanew hubairport government decidedto cancel the disappointingly, thenewly installed have notbeenresolved. ButinMexico, opposition remains andcost concerns Heathrow althoughsignificant Airport, for thelong-overdue expansion of strategyairports thatpaves theway The UKparliamentvoted for anational decisions stood outinthisrespect. contrastingIn 2018,two political expectations ofairlinesandpassengers. investmentairport to suit theneedsand implementation willhelpalign NEXTT campaigns, andothercommunications. through a webinar series, social media generated awareness andbuy-in in NEXTT. Theinitiative’s partners stakeholders showed strong interest andawidearray In 2018,airports of improvements, growth. andcapacity seamless interoperability, operational ground infrastructure thatpromotes aligned approach to investment in by theprovision ofaforward-looking, program. Itssuccess willbedefined isplannedasathree-yearNEXTT processing, andautomation. improved and datasharing, analytics leading drivers ofcost savings include benefits. The long-term significant, in accordance withNEXTT, can deliver delivered inacoordinated, holisticway The results were clear. Technology, physical rather than technological change. soaring demandoninfrastructure with scenario where respond airports to infrastructure wascompared witha implementation oftechnology inairport impact oftechnology onaviation. The was undertakento understand the A NEXTT-related cost-benefit analysis ground operations atanairport. andraisecapacity theefficiency of advanced processes can expand to definehow technology andadditional (ACI), serviceproviders andotherairport of IATA, CouncilInternational Airports Technologies isajointinitiative (NEXTT) infrastructure. New Experience Travel maximizing theefficiency of existing of in 2018highlightstheimportance expansion The lackofmajorairport

Infrastructure IATA Annual Review 2019 Review Annual IATA 31 32 32 IATA Annual Review 2019 Infrastructure private owners; involve thetransfer ofassets to models thatdonotnecessarily users andcustomers; is intheinterests and oftheindustry any privatization orcorporatization privatization orcorporatization plans; stakeholders, are consulted on adhere to, including terms for privatized to airports infrastructure andsetting outthe retaining control ofprincipal the positive aspectsofgovernments IATA’sairports. campaign focused on regulated privatized orcorporatized investment stemming from poorly increase ofcosts andthelackof launched drawing attention to the A campaign wassubsequently privatization planning. their airport governments to exercise caution in at the74thIATA AGM calling on unanimously passed aresolution In June2018,IATA memberairlines cash for governments. or corporatization israising quick Too thedriver often, for privatization of regulatory controls andbalances. term expectations, primarilyfor lack privatization to date hasmetlong- and innovation. However, noairport and increased efficiency, investment, including improved customer service monitored, can deliver benefits, structured appropriately andcarefully sectors,in various industry if Privatization orcorporatization control monopoly. fromairport becoming anout-of- prevent aprivatized orcorporatized benefits. Effective regulation must of delivering user andconsumer thecore outweighs often objective maximize shareholder returns too or corporatized, thepressure to competition. Whenthey are privatized do notnaturally orusuallyhave generator for any country. Airports service andanessential economic be considered afundamentalpublic efficient aviationinfrastructure should The provision offunctionaland governance Sustainable airport IATA activitiesin2018 exploring alternative business confirming thatthe rationale for ensuringairlines,asmajor were unsuccessful. Schiphol andatSweden’s airports the Netherland’sAmsterdam Airport significant increases incharges at in 2018.Butattempts to reduce at ’sCopenhagenAirport of $48millionincharges wassecured consultations inEurope. Areduction chargesvarious nationalairport IATA also continued to engage in (See mapopposite). charges anddevelopment activities. must maintainvigorous oversight of So governments andregulators monopoly orquasi-monopolystatus. Infrastructure providers enjoy often challenges remain. of fair infrastructure charges, many are inplace for theestablishment transparent consultation processes ongoing work by IATA to ensure that cost-efficiency.airport despite Yet, structure isthekey to improving establishing anequitablecharges consultation, andproductivity in that promotes transparency, passengers. Economic regulation proposition for airlinesand and reflective ofa value service set atlevels thatare fair, justified, Infrastructure charges must be charges Cost-efficiency and fair passengers, users. andotherairport protect theinterests ofairlines, regulatory safeguards inplace that privatization orcorporatization; and should there benoalternative to on efficiency and service levels private modelsfocused partnership development ofinfrastructure. with theairlinesthatfund case andthorough consultation underpinned by arobust business facilities, however,airport mustbe essential. Any majorinvestment in Building more infrastructure is with airlineneeds investmentAligning airport ensuringgovernments put following bestpractice public-

on large aircraft, enablingthem remove restrictions long-standing Manual runway andtaxiway widthsandto Operations and to the unanimously adopted amendments In 2018,theICAO Council are alignedwithairlines’needs. effective facilities andthatairport that capital investments are cost- be mandated by regulators to ensure development isessential andshould an earlystageofinfrastructure Consultation withairlinesfrom weaken thecase for investment. reduce demandfor airtravel and costs andinefficienciesthat can development results inadditional infrastructureUnnecessary and operational requirements. matches airlinegrowth projections infrastructure development It iscritical to ensure that widespread implementation. isfocusedand theindustry on operation have been developed, standards required for fullypaperless management process. Allmessaging endeavor ofthefuel is thedigitization their service providers. Onesuch of fuelingoperations for airlinesand efforts to helpimprove the efficiency hascontinued its partners, industry IATA, together withairlinesand the globalaverage. Asia were stillsignificantly higherthan in Africa, theAmericas, andCentral 2018, jetfuelprices insome countries transparently andcompetitively. In to areliable supplyofjetfuelpriced thatairlineshaveIt isimportant access oftheworld. jet fuelinsome parts unjustified duties, fees, andtaxes on of competition infuelsupplyand airlines varies because ofalack costs in2018.Theprecise cost to about 24%ofairlines’operating Jet fuelcosts accounted for transparent prices at competitive and Jet fuelsuppliedreliably costs. (see maponp33). billions ofdollars inconstruction changes willsave theindustry new facilities. Theimpact ofthese thereby reducing theexpense of to operate and atmany airfields Annex 14 , Design Design Aerodromes, 14 Annex

to reduce

worldwide, working often inconcert withcarriers andassociations atlocal levels. In 2018,IATA heldnumerous, effective charges campaignsagainstairport settlements Cost-efficiency and faircharges 2 $418 millionover four years. addressed, generating reductions of fees hasbeenpartly high airport In Chile, issueof thelong-standing 2. TheAmericas around $150millionby 2023. This willleadto acost avoidance of than proposed operator. by theairport significantly lower charges increase charges setting process resulted ina association involvement intheairport saving. InSouthAfrica, IATA andlocal lowered, resulting ina$16million , charges security there were Following arecent campaign in 1. Africa andtheMiddleEast 4 1 European regulators. advocating thismethodologywith with significant market power andis airports methodology to identify study to develop asimpleyet robust for Europe commissioned a (A4E) market power. IATA andAirlines withsignificant is appliedto airports ensures thateffective pricing control Directive withstronger regulation that replacement Charges oftheAirport continues to advocate for the At apan-European level, IATA 4. Europe 2018–19. reductions of$135millionfor the user development fee yielded landing andparkingcharges andin meanwhile, reductionsAirport, in Atfor India’s NaritaAirport. a new, five-year pricingagreement process inJapan, airlinesconcluded Following ayear-long consultation 3. Asia-Pacific

3

Infrastructure IATA Annual Review 2019 Review Annual IATA 33 Infrastructure

Fuel campaigns There was also ongoing work Flow Management liaison desk into Infrastructure Airport investments Joint IATA and industry efforts on safety mitigation related to the Air Traffic Management Bureau IATA’s work to align major infrastructure investments with to open up the jet fuel market for unmanned aircraft systems (UAS). headquarters in early 2019 to airline needs resulted in some substantial benefits in 2018: competition continue in many IATA collaborated with international start work with the Operation countries, including Australia, China, organizations, regulators, member Management Center. , Kazakhstan, and Mexico. airlines, and other partners on Those efforts also continue to the efficient integration of UAS In Europe, en route delays doubled in ensure the reliability of supply in into airspace. This includes IATA’s 2018 compared with 2017, to more such jurisdictions as Australia, New continuing work with ICAO and more than 19 million minutes. The principal Zealand, Nigeria, and the United partners on UAS traffic management, causes for the increase were a lack Kingdom. South Africa, meanwhile, which, in turn, involves engaging of controllers at strategic times and 5 decided in 2018 to implement a crisis the UAS industry to develop new places; an increase in controller 6 management plan and to conduct concepts for UAS operations. strike action, primarily in France; and 4 a consultative process on storage systemic delays from a lack of capacity. capacity enhancement. Space operations, meanwhile, are IATA responded by pushing a four-point anticipated only to increase. And the plan for mitigating the impact of delays. Industry campaigns to remove or goal here, too, is to integrate these prevent unjustified fees and taxes operations, which traditionally occur Longer term, the solution is to engage on international jet fuel are ongoing. in segregated airspace, with civil air navigation service providers In India, the regulating authority aviation operations. IATA and others (ANSPs) and governments in National announced a reduction in the fuel are working to reduce the impact Airspace Strategies (NAS). In 2018, two throughput charge at Chennai Airport, the launch and recovery of space ANSPs in and Italy, respectively, saving airlines an estimated $30 million vehicles has on civil airspace. published strategy documents to this 2 for 2018–19. The Indian government end. The governments of Bulgaria and 1 further announced a reduction in Regional ATM activities Spain committed in 2018 to developing the excise duty on jet fuel for 2018, In Asia-Pacific and North Asia, IATA NAS, and the French government will granting domestic operations savings continues to advocate at every publish its NAS strategy in the second 34 3 34 of around $75 million. opportunity for the timely and quarter of 2019. 35 widespread implementation of the ATM Developments Asia-Pacific Seamless Air Traffic In the Middle East, geopolitical issues In 2018, IATA, ICAO, and other Management (ATM) Plan. Failure to do and a lack of capacity to meet the partners continued to drive so will significantly increase delays increase in traffic remain the key 1. Airport 3. Airport 5. Arlanda Airport operational improvements. and fuel burn and emissions in the challenges. IATA continues its work The Airports Company South Operational capacity improvements Airport operator Swedavia removed Among them was a change to the region. IATA is working especially with ICAO, airlines, and stakeholders Africa (ACSA)’s investment plan at US preclearance from its investment requirements related to reductions hard on expanding its cooperation in the region to ensure seamless was prioritized based on airline Airport (AEP) resulted in passenger plan. This achieved a $50 million in the separation between aircraft with the Civil Aviation Administration operations in all situations. In Africa, requirements. This will speed up the experience and level of service reduction in the airport capital over oceans. The change involved of China (CAAC). An example of IATA is continuing its work and addition of much-needed capacity improvements without the need program and resolved airlines’ transitioning to a performance-based IATA’s success in this regard is the advocacy for a Seamless African and defer unwarranted investments in for infrastructure investment. A concerns on minimum connection standard requiring new equipment, move of the IATA China Air Traffic Sky that drives enhancements in a $3 billion capital program. detailed review of airside, landside, times and capacity utilization. authorizations from regulators, and the safety and efficiency of flight and operations additional training for pilots. operations using collaborative 2. Brasilia Airport resulted in 66 recommendations 6. Airport decision-making. Revisions to the design plans of the to improve operations, capacity, IATA’s involvement in and terminal expansion were secured, and passenger experience. It is implementation of a consultation improving capacity utilization and projected that implementing all of the governance structure as part of connection times and simplifying recommendations, targeted for 2020, ’s £1 billion passenger flows through the flexible could increase operational capacity at investment plan resulted in substantial and efficient introduction of “swing AEP as much as 35%. improvements in the design and gates” for international and domestic phasing of terminal piers, parking Solutions for airports operations. 4. Airport stands, and passenger amenities— The investment plan without raising capital costs. At the 2018 was improved to increase capacity AirportIS year-end, utilization, simplify passenger flows, and optimize design. This will ensure AirportIS offers the most comprehensive passenger, AirportIS was that the $400 million investment IATA Annual Review 2019 schedule, and cargo traffic data available in the marketplace. in use at IATA Annual Review 2019 program is aligned to meet the needs of airlines. It is a market leader in airport business intelligence and is used by over 100 airports and airport consulting companies globally for air service development activities.

The latest version of AirportIS is powered by the Direct airports and airport

IATA Annual Review 2019 Annual Review IATA OVER 100 Data Solution and provides users unparalleled data quality. consulting companies. 37 IATA Annual Review 2019 Environment emissions 2

emissions from international international emissions from $40 billion over and generate 2 2 data. Coinciding with the start of period, FRED+ the CORSIA baseline on 1 January 2019 with all live went functionalities fully system its core and tested. implemented global standards CORSIA provides won the that have offsetting for industrysupport and of the entire There national governments. many to that seek exceptions however, are, international the agreed from deviate use CORSIA and to for standards justify on air pricing to carbon levies Union (EU) transport. The European adopted have example, and China, for and monitoring rules for unilateral emissions, and there reporting reintroduce to proposals are in the taxes ticket environmental Netherlands and Sweden. Carbon Offset and and Offset Carbon Scheme for Reduction Aviation International in increase any CORSIA addresses CO It is an 2020 levels. above aviation that completes measure economic the industry’s long-standing, sustainability strategy four-pillar and technical, alongside operational, improvements. infrastructure mitigate that CORSIA will It is forecast of 2.5 billion metric tons around CO between 2021 finance in climate its for and 2035. Airlines asked the bill. implementation and will pay are As of 1 January 2019, all carriers their CO report to required on an annual basis, although only countries volunteering flights between requirements offsetting subject to are in the initial stages of the scheme. 2019, 79 ICAO By the end of March to member nations had volunteered apply CORSIA. CORSIA monitoring, assist with To and verification reporting, the developed IATA requirements, FRED+. system online reporting the task of FRED+ facilitates by chiefly emission reports, preparing with directly pairing airline operators the safe their national authorities for of emissions transmission and secure

cut in 2005 carbon emissions by 2050. by emissions carbon 2005 in cut in 2018 Developments commitment will the latter Fulfilling for pressure is be difficult, but there this tough the industry attain even to will need therefore, The industry, target. mitigation all environmental explore to the this purpose, possibilities. To of sustainable employment widespread marked which also fuels (SAF), aviation in 2018, is crucial.its 10th anniversary to passengers one billion The aim is for by a mix of jet powered on flights travel 2025. by fuel and SAF other reduction, carbon Beyond equally sustainability efforts are mitigation and waste vital. Noise long been management have also industry priorities. Airlines are of awareness raising to committed the illegal trafficking and preventing of animals and plants. Aviation marked the 10th anniversary the 10th marked Aviation in 2018. of its sustainability strategy is the element of the strategy A core on operational, progress push for and infrastructure technical, the promotion and improvements Carbon global standard of ICAO’s for Reduction Scheme Offsetting (CORSIA). Aviation International on deliver aim is to The strategy’s net industry stabilize to commitments a net 50% 2020, and to emissions by

Environment ike all industrial sectors, air sectors, all industrial ike must be environmentally travel With demand for sustainable. double over to air transport set

and shippers. To ensure that the ensure To and shippers. opportunities made possible by be available, to continue aviation the industry must be committed The rise sustainable growth. to media coverage in anti-aviation nongovernmental and grassroots activity (NGO) in 2018 organization made this abundantly clear. the industry has in Fortunately, that ensures strategy a robust place delivery of benefits its continued enables That strategy worldwide. of people to numbers increasing and economic the social enjoy connectivity. benefits of air the next 20 years, pressure on the pressure 20 years, the next its environmental industry minimize to will only intensify. footprint the “business of Air Transport, a has made the world freedom,” its heightening by place better travelers ever-more accessibility for

Enacting Enacting policies a that make difference 06 L

Environment IATA Annual Review 2019 Review Annual IATA 36 39 IATA Annual Review 2019 Environment As of 1 March 2019, 18 airlines have 2019, 18 airlines have As of 1 March Stage IEnvA 1 certification achieved for preparing and another 5 are Stage 1 assessment. A single airline Stage IEnvA 2 for is in preparation certified, join will once and, assessment Stage 6 IEnvA 2 airlines. the existing IATA Environmental Environmental IATA Assessment of the leads the application IATA standard 14001 international ISO management environmental for through the airline sector to systems Assessment Environmental the IATA airlines’ improves IEnvA (IEnvA). by performance environmental helping them implement best with domestic and comply practice and standards and international obligations. in climate finance in climate and generate over and generate $40 bn $40 2

that has any organic contamination. contamination. organic that has any to is usually burnt or sent Such waste reasons, For the same deep landfill. the substitution of plastic utensils does not materials with alternative rate. their recycling improve laws and international Changes to help needed to are regulations and deal with their airlines reduce to working is IATA waste. onboard procedures. establish best practice undertaking advocate It is also to the for with authorities worldwide and laws of regulations relaxation airlines’ improve to appropriate where and recycling. reduction waste Waste and environmental and environmental Waste management is being drawn attention Increasingly, management by waste better to Plastic globally. business sectors has become in the oceans waste an issue of particular concern. their rates improve to Airlines seek reduce overall and to of recycling in prevented are but they waste, restrictive highly by cases many the regarding laws and regulations of waste and removal separation CORSIA will CORSIA around mitigate metric tons of CO metric tons 2021-2035 2.5 bn 2.5 with a variety of activities related with a variety of activities related in wildlife. the trade combating to Among them was the integration of an independent certification Environmental the IATA into the development Assessment; for application of a reporting of staff; the application aviation standards, protocols, strengthened of and the raising and procedures; of this issue through, awareness passenger-focused example, for video and an e-learning and module baggage handlers. for posters During 2018, a further 15 airlines signed the Buckingham Palace the from That initiative Declaration. (UfW) Wildlife foundation for United Foundation the Royal up by set To includes a transport task force. and other 60 airlines some date, joined have stakeholders aviation in signing the declaration. IATA ROUTES in the involvement IATA’s its third which entered Partnership, in 2018 in 2019, continued year

Cabin Safety Best with 2005 2050 compared 2050 compared Cutting net carbon Cutting net carbon emissions in half by emissions in half by trafficking. Although the responsibility Although the trafficking. lies with traffickers prosecuting for and their customs, governments protection and wildlife border, industryagencies, the aviation is its part playing in raising to committed of and in preventing the awareness in wildlife. the appalling trade Helping the industry in this regard Services is the Joint Passenger In 2018, the (JPSC). Conference a recommended adopted JPSC of on the carriage (RP) practice The in baggage. wildlife prohibited on the included guidance also JPSC animals handling of escaped safe in its in the cabin Practice Guide. In 2018, there were several examples examples several were In 2018, there regarding improvements of policy The UK’s Department for SAF. to aviation allowed Transport transport participate in ground meanwhile, EU, The incentives. apply an enhanced to agreed with compared aviation for incentive transport Renewable under its ground 2020. II, beginning in Directive Energy the at remained IATA Additionally, of sustainability developments front the represents also IATA at ICAO. industry in two leading sustainability Table the Round organizations: and on Sustainable Biomaterials SustainabilityInternational and Carbon Certification (ISCC). trade Illegal wildlife animals and in endangered The trade trade illegal plants is the fourth-largest and human after drugs, weapons,

emissions from 2020 from (CNG2020) (CNG2020) Capping net neutral growth growth neutral through carbon- through major new SAF investments, the investments, SAF major new the introduction of SAF into the into of SAF the introduction from a $9 million commitment the first flight using jet fuel derived jet fuel derived flight using the first

ICAO CORSIA scheme are equally are CORSIA scheme ICAO important enablers. policy Fulcrum BioEnergy. BioEnergy. Fulcrum usage is SAF The main challenge for is produced enough volume ensure to end-user a competitive achieve to engages continually IATA price. develop to with governments SAF that reduce frameworks policy access and facilitate risks production production. SAF funding for to accounting SAF User-friendly methods; a global, mutual recognition and of sustainability standards; the within of SAF the recognition hydrant system at Airport, system hydrant jet fuel to using the isobutanol Gevo; by produced pathway than two being more most notable BioEnergy Fulcrum $600 million by facility in the United a production for Neste $1 billion by and over States SAF the substantially increase to refinery; and of its Singapore potential with invest to Airlines Japan jet fuel producer to municipal waste from alcohol by Virgin Atlantic and Atlantic Virgin by alcohol from LanzaTech;

to 2020 to efficiency an average of an average 1.5% annually Improving fuel Improving

The aviation industry’sThe aviation emissions goals three had used SAF. Other significant Other significant SAF. had used and in the production milestones in 2018 included SAF of uptake its efforts to encourage the to encourage its efforts By the of SAF. and use development than 40 airlines end of 2018, more reduction in carbon emissions over emissions over in carbon reduction the fuel. of cycle life the complete industryThe aviation is increasing 165,000 flights have flown with a SAF with a flown 165,000 flights have a variety from sourced are blend. SAF feedstocks or recycled of renewable an 80% up to deliver and can airline flight using a blend of fuels (SAF) sustainable aviation over in 2018. In that decade, occurred international aviation. international fuels Sustainable aviation of the first The 10th anniversary ICAO Assembly—an agreement that agreement Assembly—an ICAO the market- CORSIA as recognizes emissions from for measure based disconcerting given that the given disconcerting decisions behind such governments an in reaching instrumental were CORSIA at the 39th on agreement a disavowal of CORSIA as the agreed, of CORSIA as the agreed, a disavowal on aviation approach multilateral action. This is particularlyclimate Such decisions could be perceived as be perceived could Such decisions

Environment IATA Annual Review 2019 Review Annual IATA 38 40 40 IATA Annual Review 2019 Cargo 07 processes cargo in data powerthe of Unleashing A that are opento peopleandtrade. contributes isdependentonborders generates andto which aircargo The prosperity thatglobalization indeed, over theglobaleconomy. looms large over thesector and, The rise ofprotectionist policies tonne kilometersfor theyear. (FTK) predicts 2.0%growth infreight continued into 2019,andIATA This softening ofdemandhas extraordinary 9.7%growth in2017. 2018, growing 3.4%compared withits experienced anotabledeceleration in challenging. Demandfor aircargo air cargo, however, isincreasingly The operating environment for Developments in2018 aplane. irrespectiveplanet, ofthemever for ofthe allpeopleinevery part promotes oflife abetter quality stimulates economic growth and Enabling globaltrade the “businessoffreedom”. role inensuringaviation is ir cargo plays asignificant Cargo

GDP andtrade forecasts have been has deteriorated suchthatglobal play, themacroeconomic outlook most ifnotallofthese elementsin consumer confidence. Andwith of theUnited States; andwavering exporting nations,withtheexception the exportorder books ofallmajor thecontractioneconomic of activity; restocking cycle; weak global include theendofbusiness affected by otherelements.These Demand for aircargo, though,isalso processes significantly. that aircargo modernizes its To capitalize, however, itiscritical temperature-sensitive shipments. needs cargo, and suchastime- cargo are ine-commerce andspecial The greatest inair opportunities revised downward.

Cargo IATA Annual Review 2019 Review Annual IATA 41 Cargo Cargo

2018 air cargo performance Global standards Compliance with the DGR is especially Digital data will, moreover, assist Global standards will ease important in the case of lithium the efforts of IATA’s Cargo iQ quality modernization efforts, guarantee batteries. Passenger awareness management group. Cargo iQ helps the flow of commerce, and secure (see page 19) must be matched with airlines and freight forwarders monitor the air cargo supply chain. Other shipper adherence to the regulations. and benchmark delivery performance cargo initiatives that will benefit from But rogue shippers that ignore global against their service promise, define global standards include quality standards and products compromise common processes and procedures, Global capacity management, trade facilitation, the safety of air transport.Governments and promote best practices. Its Global demand enhanced safety measures, and must do more to enforce the rules. Smart Data portal provides analytics special cargo handling. on shipment performance and IATA and industry action allows members to compare their The goal is to make trade simpler, performance with the performance cheaper, and faster. Critical in this Modernization of others in the air cargo community. 5.4% regard are the universal ratification The needs of today’s shippers Such capabilities will be increasingly 3.4% and implementation of Montreal can only be met with the sector’s relevant as e-commerce grows and Convention 1999 (MC99); the revised modernization. IATA initiatives as shippers demand ever-higher Kyoto Convention; and the World underlie air cargo’s innovation, and service standards. Trade Organization (WTO) Trade the industry came to a resolution on Facilitation Agreement (TFA). the sector’s modernization at the Special cargo 73rd IATA AGM in 2017. IATA initiatives in special cargo Meanwhile, the Pre-loading Advance operations continue to ensure Cargo Information (PLACI) initiative The e-air waybill (e-AWB) is a airlines’ compliance with the latest Region Market share Demand Capacity by the Technical Experts Group on cornerstone of the industry’s digital regulatory requirements and with Air Cargo Security (TEGACS) will vision. Although progress has been shippers’ growing demands. Total Market 100% 3.4% 5.4% help to secure the supply chain. IATA slower than hoped, the e-AWB has supports PLACI’s implementation reached critical mass, standing at IATA’s Center of Excellence in the United States and welcomes 61% penetration at the end of 2018. for Independent Validators in 42 Africa 1.7% 1.3% 1.0% the requirement for it in Europe from Resolutions and recommended Pharmaceutical Logistics (CEIV 43 2021. PLACI standards are laid out in practices continue to be amended Pharma) addresses issues related to Asia-Pacific 35.4% 1.7% 5.0% the well-established World Customs to make the e-AWB the default on pharmaceutical transport, and IATA’s Organization (WCO) safe Framework enabled trade lanes. Center of Excellence for Independent Europe 23.3% 3.2% 4.3% of Standards to Secure and Facilitate Validators for Live Animals Logistics Global Trade. Work is also ongoing to ensure (CEIV Live Animals) improves the that IATA’s Cargo-XML messaging safety and welfare of animals Latin America 2.6% 5.8% 3.4% Dangerous goods standard—which expedites transported by air. And as of 2018, Global standards are especially vital business between airlines and cargo they are joined by IATA’s Center for Middle East 13.3% 3.9% 6.2% for the safe transport of dangerous stakeholders—achieves universal Excellence for Independent Validators goods, including lithium batteries. adoption. The standard has already for Perishable Logistics (CEIV Fresh). North America 23.7% 6.8% 6.8% ICAO’s technical standards and IATA’s been integrated in two important Dangerous Goods Regulations (DGR) customs systems: the WCO’s Cargo CEIV Fresh advances the handling provide the necessary guidelines. Targeting System (WCO CTS) and the and transporting by air of perishable Automated System for Customs Data products. The specific time and Properly labeled and packaged in (ASYCUDA) World, a system used by temperature requirements for food Key points in 2018 air cargo performance accordance with those guidelines, 90 countries. and plant products makes them a dangerous goods can be shipped challenge for air cargo. The CEIV safely. IATA’s DG AutoCheck product The common data language of Fresh program meets their exacting even checks the shipper’s declaration Cargo-XML will enable the IATA requirements based on IATA’s Air freight Freight capacity Weakness in the for compliance with the DGR. ONE Record program, which grants Perishable Cargo Regulations (PCR). supply chain stakeholders direct demand ended was up 5.4%, global economy Complementing ICAO’s technical access to shipment data using In early 2019, the 2018 up 3.4%, outpacing annual and consumer standards, the DGR and DG modern web standards. The first Hong Kong (AAHK); Cathay Pacific; AutoCheck is IATA’s e-Dangerous standards for end-to-end supply Cathay Pacific Services Limited despite softening demand growth, confidence Goods Declaration (e-DGD). The chain data connectivity were (CPSL); and Hong Kong Air Cargo late in the year. but yields remained affected growth. e-DGD leverages industry initiatives agreed to in March 2019. Terminals Limited () took a IATA Annual Review 2019 robust. to digitize data and to embrace community approach to being the first data-sharing platform principles. It organizations to put the CEIV Fresh enhances transparency, traceability, program to the test and to become and data quality. CEIV Fresh certified. IATA Annual Review 2019 Annual Review IATA Cargo

Cargo Solutions for cargo In 2018, CargoIS Dangerous Goods Regulations Center of Excellence for Independent Validators in The DGR are the global reference for shipping dangerous goods by air. Pharmaceutical Logistics CargoIS offered market dynamics across more than The DGR has been the only standard recognized by the global airline IATA’s in Pharmaceutical CargoIS is the leading 140,000 airport-to- industry for almost 60 years. Logistics CEIV Pharma aims source for air cargo business airport trade lanes; to improve the handling of intelligence. It is the most complete, up-to-date, and user-friendly reference for pharmaceutical products by dangerous goods handling in the industry. introducing a standardized Its information spans the 140 k pharmaceutical-handling entire supply chain: airlines, process at airports globally that general sales agents (GSA), complies with pharmaceutical freight forwarders, ground manufacturers’ requirements. handlers, airports, and many others. reflected the business of CargoIS gets its data more than 30,000 freight from two sources: forwarders and more than OVER 200 airlines and GSA;s; CASS, the Cargo Accounts Settlement Systems operated 30 k by IATA and used by airlines to settle with freight forwarders and once the sole data source for CargoIS, and units of the DGR are shipped CEIV Pharma’s provided data sourced from contributing airlines, numbers for 2018 through a new data source, CASS, meaning the more 100,000worldwide every year, were as follows: 44 CargoIS Direct Data than 21 million records of demonstrating its widespread 45 (CDD), that complements airway bill information per CASS data. annum that are fed into adoption and industry compliance. Cargo IS; and CargoIS is the only air cargo intelligence solution 21 mn DG AutoCheck combining the advantages of actual transactional data DG AutoCheck is an acceptance validation tool. people trained with voluntarily contributed 764 data, resulting in the best It automates the checking of dangerous goods against data quality on the market. the DGR without slowing the check-in process. And now, with the CDD source, subscribing airlines It provides the acceptance checker with an image of the can access commodities offered data representing shipment for physical inspection. transported and benefit from $32 billion worth of entities certified unrivaled market coverage. air freight charges. DG AutoCheck makes significant process, cost, and safety 228 improvements to the acceptance process for dangerous goods. At year-end 2018, there were 21 32 bn CEIV Pharma Communities:

Before DG AutoCheck’s launch in 2018, it involved North America Liege IATA Net Rates Dallas/ Ft. Worth Paris Edmonton IATA Net Rates connects airlines and freight Anchorage forwarders to securely manage and distribute cargo and an industry rates. Airlines can automate the creation, management Europe Asia

working group of IATA Annual Review 2019 and distribution of their rates, while forwarders are Hong Kong able to access all airlines' rates in one system. Singapore signed test customers The platform supports the distribution of a variety Taipeh of rate types, including market rates, contract rates 11 OVER 25 Brussels origin countries have companies and spot/ad-hoc rates. It is accessible via the web or Seoul subscribed to CargoIS. can be integrated into customer’s rates management from across the IATA Annual Review 2019 Annual Review IATA 71 systems using web services. supply chain. 46 46 IATA Annual Review 2019 Passenger experience 08 P flights, self-boarding, and self-recovery of documentation, self-rebooking of tagging ofbaggage, self-checking self- orautomated check-in, self- functions: contact withairport service optionsatsixpointsof program offers passengers self- terminal doorto aircraft seat.The experience for passengers from Fast Travel provides aseamless Developments in2018 constrained infrastructure. airport facilitate themostefficient use of not onlybenefittravelers butalso passenger incontrol willtherefore convenient experience thatputsthe higher degree ofpersonalized and decades.two Delivering an ever- doubling ofdemandover thenext dealwitha also helptheindustry These andothersolutions will devices; andseamless border control. information sent directly to personal identification, flight real-time all travel processes usingbiometric tracking, token asingleidentity for improved baggagehandlingand processes,number ofairport is theautomation ofagrowing Prominent among those initiatives an array ofairlineinitiatives. collecting thefocus luggage—is of and check-in, through security, to that experience—from booking improvedservice demand with increasing Meeting

experience. Improving they purchase atravel simply buyanairticket; assengers nolonger Passenger experience IATA iscalling ongovernments to Travel facilitation fully implemented. costs byindustry $2.1billionwhen estimated thatFast Travel willreduce to cleartheway for Fast Travel. Itis solutions. There isgreat incentive airlines from implementingFast Travel on removing obstaclesthatprevent IATA’s focus in2018continued to be self-service implementation. biometric emphasized end-to-end America andEuropeof North have options. Themore mature markets boarding passandself-tagging Asia have focused onmobile varies by region. Africa andNorth The Fast Travel experience, though, complete Fast Travel experience. 48% oftravelers hadaccess to the of baggage. BytheendofMarch 2019, air travelers. to dealwiththegrowing numbers of processesairport andinfrastructure visa restrictions of to theinability borders. Barriers to travel range from the free movement ofpeopleacross the removal ofonerous barriers to seekingaviation. Itisinparticular economic andsocial benefitsof theirefforts to spreadintensify the

governments maintain theintegrity open borders strategy thatwillhelp IATA hasdeveloped acomprehensive stakeholders. different travel tokens to different need for passengers to present know basis.OneIDremoves the stakeholders onanauthorized-to- is thenmadeavailable to therelevant technology, andthevalidation data trusted digitalbiometricrecognition isvalidatedidentity earlywith passenger’s journey. Thepassenger’s all processes andstakeholders ina management platform thatcovers ID introduces acollaborative identity from doorto flightgate. airport One secure processing for passengers initiative thataimsatseamless and IATA launchedOneIDin2018,an To traveler further convenience, effectively and efficiently. advance passenger information (API) traveler programs, andusing negotiations, linkingregistered- ofbilaterala part andregional trade restrictions, makingtravel facilitation removing travel unnecessary reviewing visarequirements and main components are asfollows: travelsatisfying demand.Itsfour preventing from theindustry will eliminate theinefficiencies of theirnationalborders andthat

Passenger experience Passenger IATA Annual Review 2019 Review Annual IATA 47 Passenger experience

2018 Global Passenger Survey Key Results

For travelers, NDC means greater IATA’s outreach on behalf of the Airlines, meanwhile, won’t have transparency when shopping with a NDC to the overall travel community any further need of relying on the travel agent, online travel seller, or continues apace through advisory time-consuming and expensive ort ch self-booking tool. They also have the groups representing the travel buyer reconciliation of different reference p o TOP 3 option either to be recognized by and and travel management communities. numbers. This will help them Passenger experience Passenger s o s s 25-54year olds prefer a e things people to receive customized offers from Engagement with the travel industry streamline their reservation p b electronic the airline or to shop anonymously. also occurs at the annual Business management and financial processes, r want to i i

o Travel agents, meanwhile, can access Travel Summit, an invitation-only event eliminate their dependency on e

m

h notified about an airline’s entire product portfolio, for the business travel value chain that industry-specific accounting t e

t

e

r including ancillaries and promotional is in its fourth year. NDC is also widely solutions, and simplify their

c

i

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a

68% l

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. fares, using NDC. represented at the annual Airline delivery and accounting processes. p d e Flight r t

45%o status Industry Retailing Symposium (AIRS). Airlines also will be able to seamlessly +55year olds prefer The NDC initiative advanced further sell, account for, and track the 1 in 2018. By year-end, some 65 airlines ONE Order delivery of flight and non-flight printed pass Bag info/ and 65 information technology (IT) IATA’s ONE Order program builds products and services in a fashion of air travellers wait time providers and aggregators, including on the digital transformation made similar to that of any retailer. prefer self service all three global distribution systems, possible by NDC. In short, ONE Order 2for delivery had attained NDC certification. replaces a paper-based framework The first ONE Order message schema bag drop options Involvement in NDC is ongoing in with digitized order management was released in September 2018 Wait 2019, with 144 companies certified processes. E-tickets, passenger following the conclusion of the ONE as of 20 March. name records (PNR), and electronic Order trials that commenced at the willing to share time at miscellaneous documents (EMD) end of 2017. To date, nine ONE Order 65% 3security/ Widespread NDC implementation have been digitized for some time. trials have been conducted. personal info to by airlines, travel sellers, and IT But until ONE Order, they remained speed up airport border providers has ushered in a change mired in the rigid booking, ticketing, And in January 2019, IATA launched of focus for NDC. The emphasis delivery, and accounting methods the ONE Order certification processes now is for a critical mass of NDC- designed for the paper era. registry. The registry ensures 48 based transactions from their still the transparency of ONE Order 49 small volumes. To spearhead this ONE Order instead generates a single deployments, validates the effort, IATA established the NDC customer record holding all the data capabilities of the program’s In 2018, four groups of experts Baggage tracking New Distribution Capability Leaderboard of 21 airlines seeking required for air travel order fulfillment. supporting IT providers, drives ONE were formed to evaluate One ID’s Awareness is high within the The New Distribution Capability to rapidly grow their NDC volumes. Order’s innovation, monitors the deliverables. Those groups applied industry that 84% of passengers (NDC) is transforming the way airline Each of these 21 airlines targets For travelers, that means simplicity. program’s progress, and bolsters their expertise to examining the expect to have their bags tracked products are retailed by addressing having 20% of its sales powered They will no longer need to juggle ONE Order adoption. initiative’s business case, operational and that IATA Resolution 753 limitations such as the following in the by an NDC application program different reference numbers and processes, legal situation, and requires IATA members to track third-party distribution of products: interface by 2020. documents when checking in or The move to ONE Order is a large-scale technological roadmap. They then passengers’ baggage at key points making changes to their itinerary. With transformation project encompassing authored the One ID End State and in passengers’ journeys. To date, The inability of airlines to As the NDC strives for critical mass, a single reference number, travelers airlines’ internal processes and Key Principles paper, which was 78% of IATA members track bags differentiate product offerings NDC Leaderboard airlines in the will be easily recognized by all service procedures and their organizational published in December 2018. in some way, whether with optical The excessive time to market for vanguard, IATA is introducing changes providers. Disruptions and rebookings structure. It also impacts also systems, , radio frequency new products and services to its NDC certification program to will be easier to manage as well. interactions between airlines and other Baggage identification (RFID), or manually. The impediments to consumer support the industry through this industry partners including passenger Airlines carry approximately five That so many IATA members are comparisons of the full value of an phase of NDC’s rapid volume growth. Travel agents, too, will benefit from service system suppliers, airline billion bags annually. The majority tracking passenger baggage airline’s offerings rather than, as is The changes include recognizing ONE Order. They’ll be able to employ e-commerce platforms, travel agents, of those bags arrive on time is laudable. But their use of so typically the case, only its base fares the ability to process service a single, identical process to book global distribution systems and others. with their owners. Over the past many disparate tracking options messages, such as flight changes and flights and products for all airlines As such, it appears likely that there will decade, baggage mishandling has undermines the common capability NDC’s success in overcoming such cancellations, using NDC. Additionally, regardless of an airline’s business be a transition period, during which dropped around 70%. In 2018, that the industry requires. limitations is largely attributable to a new designation, NDC@Scale, model or technological capability. airlines will need to operate with both however, the mishandling rate for the development and introduction is being introduced. NDC@Scale existing legacy processes as well as baggage rose 2.2%, to an average For this reason, IATA is proposing of its XML Internet language as will recognize the ability to process the new standards. of 5.69 mishandled bags per 1,000 to make RFID the standard method the standard for communications large volumes of NDC-supported passengers emplaned. The cause of tracking baggage. This will set between airlines and travel agents. transactions and will grant special of the increase was the heightened the direction for baggage handling The XML standard enables airlines recognition for the ability to meet demand that the growing number of system design specifically and to display and sell ancillary products business travel needs through NDC. passengers is placing on baggage infrastructure improvements in and services through IATA Annual Review 2019 handling system capacity at airports general to include RFID as a default and other third-party channels just as worldwide. With passenger volume tracking technology. they do on their own websites. This For travelers, ONE expected to double by 2037, more was difficult to impossible for airlines Order means simplicity. attention than ever will need to be to do owing to limitations in the pre- paid to baggage operations to ensure Internet language that power They will no longer that passenger’s high expectations most travel agent systems. need to juggle different IATA Annual Review 2019 Annual Review IATA for convenient travel are met. reference numbers. Passenger experience

Solutions for passengers

Airs@t

Airs@t Passenger Satisfaction Benchmark study is the Timatic is the industry’s definitive source for ensuring Passenger experience Passenger industry reference for airline benchmarking. airlines’ compliance with passenger requirements. It tracks passenger satisfaction on detailed travel attributes giving airlines actionable insight on the entire Its flexibility allows it to be integrated into airlines’ travel experience: pre-flight , in-flight and post-flight. departure control systems and into kiosk and mobile check-in procedures. Airs@t uses scientifically proven and unbiased methodology to collect a sample that would represent the actual population Timatic is updated at least three times daily throughout of the respective airline’s passengers. Random selection of the year to ensure its application of the latest regulations. the respondents and multiple control measures included in the survey process help to ensure that collected data is of highest relevance. The same methodology is followed for all airlines to Timatic’s highlights in guarantee reliability of benchmark data. 2018 were as follows: With unlimited potential for customer data analysis, Airs@t acts as a support tool to complement the Customer Insight activities at the airlines. Airs@t at year-end 2018 included 650 50 passengersmillion had their 51 documents checked

320airlines used Timatic

+80detailed travel 85airlines employed attributes automated document verification powered by Timatic AutoCheck global routes

5 1,600government and airline sources gave information 30 airlines IATA Annual Review 2019

IATA Annual Review 2019 Annual Review IATA +62,000passengers Financial services Financial services Financial

09 Financial services 52 Streamlining the 53 financial services

he landscape for payments from airlines to airlines, and from airlines worldwide has undergone to suppliers. In 2018, IATA enhanced the major changes, first with the IFSS’s management of credit risk, through introduction of online payments the launches of the New Generation IATA and, more recently, through the advent Settlement Systems (NewGen ISS) and of mobile payments. New regulations to the introduction of Transparency in Tkeep pace with the evolving technologies Payment (TIP). have an equal impact on the payments landscape. The European Union (EU)’s Also in 2018, the IFSS, which operates on Payment Services Directive 2 (PSD2) a cost-recovery basis in accordance with Application Programming Interfaces rules agreed to by system participants, (APIs) enable instantaneous payment processed $466 billion. The vision is for consumers. to move from its largely conventional processing of payments to digital payments IATA is negotiating the altered payments that are 100% safe; 100% instant; and terrain with significant investments to 100% frictionless—meaning zero cost—for maintain the relevance of its payment all stakeholders. IATA will achieve this vision and settlement services—making them by leveraging the latest technologies, such safer, faster, and more cost-effective than as API and blockchain, and by working ever. The backbone of those services, closely with its industry partners. IATA Annual Review 2019 IATA Financial Settlement Services (IFSS), facilitates payments to airlines from travel agents and freight forwarders, IATA Annual Review 2019 Annual Review IATA 54 54 IATA Annual Review 2019 Financial services $466 billion. $466 The IFSS processed IFSS The companies atyear-end 2018. agents (GSSA), andground handling 235 airlines,general salesandservice CASS featured 92operations serving on-time settlement rate of99.996%. processed $37.2billionandhadan solution.e-billing In2018,CASS advanced, global,web-enabled operates through CASSlink,an airlines andfreight forwarders. It and settling ofaccounts between System IATA’s Cargo Account Settlement members. volumes oftransactions from IATA per transaction inreturn for higher the aimbeingto reach zero cost determined to lower thiseven further, transactions aslow as$0.04.IATA is of $0.07,withthecost ofsome in anaverage cost pertransaction through allBSPsin2018resulted 743 milliontransactions processed 6% oftotal transaction volumes. The airline to date accounts for more than largest users oftheBSP, althoughno benefits, naturally, are delivered to the economies ofscale. Thegreatest savings through for itsparticipants is thatitgenerates significant cost BSP One ofthemainbenefits on-time settlement rate was99.997%. countries andterritories. Theiroverall year boasted 136operations in181 billion in2018andattheclose ofthe processedairlines. TheBSP $248.8 approximately 400participating financial control and cash flow for travel agentsandimproves the procedures ofIATA-accredited selling, reporting, andremitting facilitates(BSP) andsimplifiesthe IATA’s Plan BillingandSettlement IATA settlement systems (CASS) simplifiesthebilling In 2018,theE&Fprocessed $4billion. of contact for questionsorconflicts. process andproviding asinglepoint disputes by standardizing thebilling reconciliation headaches, and airlines avoid late payment penalties, fund collection. TheE&Falso helps automatically validated, andsecure standardized e-invoices thatcan be generation ofaccurate billingdata, systems andprocesses for the have access to IATA’s globallytrusted service providers (ANSP) andairports ensures(E&F) thatairnavigation IATA’s Enhancement &Financing processedICCS $39.1billionin2018. repatriation delayed. Overall, the where can becomplex liquidity and IATAsupported members inmarkets CASS operations globallyalso Africa; andTrinidad andTobago. including Nigeria,andofCentral ; thenationsofWest Africa, currency issues,suchas liquidity million from countries withsevere in 2018for repatriating over $815 worldwide. wasresponsible TheICCS 200 IATA andCASS BSP operations airlines andisavailable through over is usedThe ICCS by more than320 repatriate theirworldwide sales. treasurers to centrally control and management thatenablesairline offers(ICCS) global cash IATA Currency Clearance Services success rate of99.999%. billion andhadafinancial settlement In 2018,theICHprocessed $62.1 airline travel participants. partner airline-associated companies, and settlement services to 445airlines, provides fast, secure, cost-effective The IATA ClearingHouse (ICH)

and supplierinvoices andsettled processed over 1.6millioninterline on theinvoice sender side. SIS e-invoices to maximize efficiency entities enabledasreceivers ofSIS 313 suppliers, and1,744other including426airlines, participants, In 2018,SIShadmore than2,483 airline customers. one invoicing standard for alloftheir andallows suppliersindustry to use simplifies businessactivity forthe messaging standard, theISXML, suppliers. Theuse ofasingle airlines anddirect operating cost data amongairlinesandbetween enabling theexchange ofelectronic SIS isstreamlining processes by services. and settlement ofindustry removes allpaperfrom theinvoicing electronic invoicing platformthat Settlement IATA’s SimplifiedInvoicing and risks ofairlinesandtravel agents. including theincreasingly complex to address today’s businessrealities, regulation. Therulesrequired updating and extensive airlineindustry agencies, limited payment methods, travelstock, brick-and-mortar established inanera ofpaperticket airlines. Itsrules,however, were travelfunds between agentsand the distributionandsettlement of has eased, secured, andmadesafe Since itslaunchin1971,IATA’s BSP NewGen ISS year underreview. $74.82 billioninvolume duringthe (SIS) isacost-effective sales agency agreement. worldwide underasinglepassenger to accredit alloftheirlocations agentswillbeable Multicountry operations markets. inmultipleBSP “one-stop shop” for agentswith levels astheirbusinesses evolve. suits themandto move between agents to select thelevel thatbest accreditation for andtheability of airlinesandtravel agents: that enableitto bestserve theneeds isbuiltonfourThe NewGen ISS pillars effective solutions. flexibility, andnew andmore cost- products andservices, greater offersagents, theNewGen ISS more lower cost ofdistribution. For travel risk managementframework, anda processing through anenhanced faster settlement, safer funds For means airlines,theNewGen ISS airline andtravel agentcustomers. relevance andvalueto ofitsBSP by IATA to ensure thecontinued waslaunched The NewGen ISS the DDSdelivers. product development - and marketing, orbusinessand revenue sales management, planning to fleetplanning, intelligence you require -network carriers’ contributions. available transactions, BSP and plan (ASP) transactions, IATA’s Logistics, Inc.’s area settlement such multiplesources asARC Air global dataset,aggregated from access to themostcomprehensive global airlinemarket data. accurate, cost-effective access to the travel withtimely, industry sponsored program thatprovides industry- is agame-changing, Participating carriers gaineasy Itoffers three levels oftravel agent Nomatter whatbusiness Direct Data Solutions(DDS) GoGlobalAccreditation isa Direct Data Solutions

1.91 bn with YoY increase of7% 2.19 bn PASSENGERS, with YoY increase of7% TICKETS encompassed thefollowing: As ofDecember 2018,theDDS GoLite travel agents. settlement. Itisalso designed for a low cost pertransaction andfast reach their RHC andgrants airlines way to continue selling even ifthey provides agentswithafail-safe tickets intheBSP. IATA EasyPay travel agents’issuance ofairline new, e-walletsolution voluntary for outstanding to theBSP. (RHC)holding capacity for cash sales includingaremittanceparticipants, ensures enhanced for security its management framework that customer card. tickets issuedwithIATA EasyPay ora level” accreditation andinvolves operating inasinglecountry. place atthistimeandisfor agents accreditation specifications in corresponds most closely to the Itencompasses IATA EasyPay, a Itfeatures amodernrisk GoLite accreditation is“entry- GoStandard Accreditation 89,000+ TRAVEL AGENTS TRAVEL 90 consented to by anairline. but agentscan onlyuse methods of settlement isbarred by TIP, thefact, ifatall.Nomethod after see thepayment settlement costs settlement. Asitstands,airlinesonly using theirown cards for funds and consent regarding travel agents airlines withincreased transparency TIPisfocused(TIP). onproviding called Transparency inPayments IATA isalso introducing aninitiative 2019 and100%in2020. 90% oftotalcash remittances BSP in implement itinmarkets representing some 50areas to date. Theintent isto markets andhasbeenimplemented in progressively rolled outinallBSP isbeing The NewGen ISS of security. to bankguarantees andothertypes flexible, and collateral-less alternative agents thatpresents acost-effective, option a financial security for travel contributers from indirect channels ItincludesGlobalDefault Insurance,

AIRLINE

Financial services Financial IATA Annual Review 2019 Review Annual IATA 55 56 56 IATA Annual Review 2019 About IATA About IATAAbout nations 99 Employees from countries 57 Offices based in Fax: +41227983553 Tel: +41227702525 CH -1215Geneva 15Airport P.O. Box 416 33, Route del’Aéroport Executive Office Fax: +15148749632 Tel: +15148740202 Canada Montréal, QuébecH4Z1M1 P.O. Box 113 800 Place Victoria Head Office Montreal

People’s Republic ofChina Chaoyang District RoadNo. 1WangjingNorth China DigitalHarbor 3rd Floor, Asia China &North Jordan 1194 Al ShaabRoundabout King AbdullahStreet Building No. 8 Business Park AfricaNorth Middle East& male 53% Gender split

female 47% United States ofAmerica Miami, 33126 Suite 600 703 Waterford Way The Americas Spain Madrid 28046 95 Paseo deCastellana Torre Europa Europe Singapore 117372 #20-81 Mapletree BusinessCity 80 Pasir Panjang Road Asia-Pacific

management system. anditssolid quality high quality in certification recognition ofits million jobsrelated to aviation. ofthemorepaths insupport than62 andtoand sustainably; foster career businesses operate safely, efficiently, standards; to helpaviation-related situations to promote industry business scenarios andgaming around theworld through realistic IATA Training practices andtechnologies. and collaborate to improve aviation worldwidepartners whoshare ideas ofmorea community than400 IATA Strategic Partnerships Itcarries ISO 9001:2015 IATA Training from putsparticipants IATA Strategic Partnerships is Partnerships andTraining organizations in150-pluscountries; people from 1,000-plus 100k trained more than accredited training schools. 170+ authorized training centers, and 270+ institutions, including resellers andpartnering 450 worked with In 2018,IATA Training

partners, regional training 20+ 40 diplomaprograms; and courses andmore than 350 offered over

About IATA About IATA Annual Review 2019 Review Annual IATA 57 annualreview.iata.org