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Tue 5 Nov 2019 03:04 PM

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Why the MidEast aviation sector faces a $5 loss per passenger

IATA chief calls on governments and industry in the MENA region to focus on four priorities including low-cost infrastructure

Why the MidEast aviation sector faces a $5 loss per passenger

Alexandre de Juniac, IATA’s director general and CEO.

Better low-cost infrastructure for airlines in the Middle East and North Africa is required as the region faces loses $5 per passenger flown this year, far below the global average of $6 profit.

The International Air Transport Association (IATA) called on governments and industry in the MENA region to focus on four priorities to secure the future of aviation in the region against the backdrop of a challenging operating environment.

They include cost competitiveness, infrastructure, harmonised regulation, and gender diversity.

Alexandre de Juniac, IATA’s director general and CEO in a keynote speech at the 52nd AGM of the Arab Air Carriers Organisation (AACO) in Kuwait, said: “The direction of the global economy is uncertain. Trade tensions are taking their toll. The region is at the nexus of conflicting geopolitical forces with real consequences for aviation. And airspace capacity constraints have become more extreme. But people want to travel. And economies in MENA are thirsty for the benefits that aviation brings.”

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He added: “Some airlines in the region are doing well, but overall Middle East carriers are expected to lose $5 per passenger this year — far below the global average of $6 profit per passenger.

"Low-cost infrastructure is essential. Our message to governments is simple: follow ICAO principles, consult users with full transparency and recognize that rising costs have long-term negative consequences. Aviation’s benefits are in the economic activity that the industry catalyzes, not in the tax receipts it generates.”

IATA said it recognised the foresight of governments in the region in developing airport infrastructure and urged them to harness the power of technology to ensure that the infrastructure operates efficiently for airlines and conveniently for passengers.

"MENA governments have understood that infrastructure investments are needed to capture aviation’s economic and social benefits. But adequate infrastructure is not just about the bricks and mortar. The technology that we put into airports is as important. Passengers expect technologies like biometric identification and smart phones to shorten wait times and make airport processes more efficient,” said de Juniac.

IATA also called on the region to continue to take a leading role in using technology to drive improvement in the passenger experience, highlighting recent projects at airports in Dubai, Doha and Muscat that use biometric technology.

IATA stressed the need for regulatory harmonisation across the industry and urged governments to implement the global standards that they have agreed to.

De Juniac also called on a united approach by regulators to help rebuild confidence in the Boeing 737 MAX as efforts continue to ensure a safe return to service.

On gender diversity, IATA called for airlines in the region to support the recently launched 25by2025 Campaign.

“It is no secret that women are under-represented in some technical professions as well as in senior management at airlines. It is also well-known that we are a growing industry that needs a big pool of skilled talent. If we don’t engage the female half of the world’s population much more effectively, we won’t have the needed people power to grow,” said de Juniac.

The 25by2025 Campaign is a voluntary program to address the airline industry’s gender imbalance. Participating airlines commit to increase the number of women at senior levels and in key positions by 25 percent or to a minimum of 25 percent by 2025.

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