IATA has upgraded its global outlook for the airline industry to US$12,7 billion (R126,5bn) profit in 2013, but margins remain weak. This was the word from Iata’s director general and CEO, Tony Tyler, when addressing delegates at the Iata AGM in Cape Town on the state of the air transport industry. 
“On $711 billion (R7 087bn) in revenues, that’s a 1,8% nett profit margin. To put that into perspective, it means that we will earn a $4 (R40) profit per passenger carried – less than the price of a sandwich in most parts of the world.”
However, generating these small profits under current conditions is a major achievement, Tony said. “The price of fuel, our largest cost item, has increased 55% since 2006 and we continue through the greatest period of economic stress since the 1930s.” 
So where are the profits coming from? Ancillary sales had grown to over 5% of revenues and capacity was being used more efficiently, with industry load factors at a record high of 80,3%, he said.
Another challenge is safety, particularly in Africa where the accident rate is 18 times worse than the global average. “The safety performance of African airlines on the Iosa registry, including our African members, aligns with the global average. This means that world-class safety is possible in Africa,” said Tyler. 
“With the Abuja Declaration, African governments have committed to achieve world-class levels by the end of 2015. By then Iosa will be required across the continent. We are engaging African airlines directly to meet Iosa over 900 standards and join the registry.”
He added that the European Union (EU) banned list had not helped African safety, as its standards were unclear and there was no transparency with regard to how airlines got on to the list and how they could get off. “I am confident that Iosa will lead to improvements and the EU will have no choice but to rethink its misguided approach.”
He said the future was pregnant with potential but it also held many challenges, which could be overcome by establishing partnerships built on transparency and common purpose. “United we stand, divided we fall. Aviation is fiercely competitive. But, working together, strong partnerships, global standards and co-operation have played a major role in our success, and they still do.” 
He identified five areas where this was particularly needed: improving security; cost effective and efficient airport infrastructure; modernising distribution (NDC); establishing appropriate regulation; and reducing carbon emissions. 
“Airlines compete vigorously to defend and grow their businesses. At the same time we have a strong association born in the recognition that a successful global air transport industry needs global standards, and that these standards must be built through compromise, partnership and co-operation,” Tyler concluded.