Airlines expected better performance
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The air association has estimated a net profit margin of 1.8% with profits at US$10.6bn against revenues at US$711bn for the year. Its recent best year was in 2010 when airlines saw a 3.3% net profit margin at US$19.2bn.
Tony Tyler, director general and CEO at IATA said any profit gains in the airline industry is “a major achievement” given the rising cost of fuel and the economic environment.
“This is a very tough business. The day-to-day challenges of keeping revenues ahead of costs remain monumental. Many airlines are struggling. On average airlines will earn about $4 for every passenger carried—less than the cost of a sandwich in most places,” he said.
IATA’s forecast for Europe has doubled to US1.6 billion but warned a ‘third false dawn’ where improvements in the Eurozone stall could cause major problems.
The association also used its AGM to boost support for the New Distribution Capability (NDC), saying the open XML-based platform had been supported by its members. The new system would allow travel agents to merchandise and see product in the way consumers do on airline websites. Trials of the system will go underway later this year.
Tyler rubbished criticism from commentators that have raised concerns about information privacy and competition.
“NDC will not contravene privacy laws. Nothing in the NDC standard requires passengers to supply personal information to receive an offer. But it does provide the opportunity for customers to identify themselves, if they so choose, to have their loyalty recognised by the airlines,” he explained.
“NDC will not bypass travel agents. It will enable them to sell all of what airlines have on offer. And, NDC will not eliminate comparison shopping. It will give customers better information on which to make decisions. NDC will support photographic product descriptions so that people can see what they are buying. And it will enable passengers to compare the base fare as well as the cost of all the options that are available,” Tyler added.