IATA Reshaping to Build a Stronger Industry

The International Air Transport Association (IATA) called for a major resizing and reshaping of the entire air transport value chain as airlines battle the ongoing global economic crisis. Airlines are expected to post losses of US$9 billion this year with an unprecedented 15% revenue drop that will see industry revenues shrink by US$80 billion to US$448 billion.“I am a realist and I don’t see facts to support optimism. The industry is in survival mode. Whether this crisis is long or short, the world is changing. Travel budgets have been slashed and consumers will need to reduce their debt. It will not be business as usual in the post-crisis world. Governments, partners and airlines must use this crisis as an opportunity to build a stronger industry. That means resizing and reshaping,” said Giovanni Bisignani, IATA’s Director General and CEO in his State of the Industry address to 500 of the industry’s top leaders gathered in Kuala Lumpur for the 65th IATA Annual General Meeting and World Air Transport Summit.

IATA’s Simplifying the Business program has given the industry a head start on cost cutting. In 2008, US$4 billion in cost savings were achieved with 100% e-ticketing and the deployment of Common Use Self-Service (CUSS) kiosks. “This was only the beginning. We have our eyes set on another US$10 billion in savings by improving baggage management, travel processes and with e-freight,” said Bisignani.

Bisignani noted that the burden of change must be shared across the industry value chain. “Resizing and reshaping is not just a problem for airlines. Everyone in the value chain lives off our revenues. All must contribute to industry change,” said Bisignani.