Home' Asian Aviation : AAV April 2011 Contents AsianAviation | APRIL 2011 13
In Singapore in June, International Air Transport Association director-general Giovanni
Bisignani will stand down at the airline lobby group's annual meeting. Before doing so, he
paid a final visit to the Asia-Pacific region, during which he challenged governments and
regulators to prepare for rapid growth. Ian Goold reports.
In a last-minute change, Singapore
will host this year s International Air
Transport Association (IATA) annual
general meeting (AGM) in June, a er
the event was moved from the Eg yptian
capital, Cairo, because of that country s
recent political upheavals.
e meeting is expected to attract about 800
delegates, including up to 200 chief executives
from airlines, airports, manufacturers, and other
IATA Director General and Chief Executive
Officer Giovanni Bisignani announced the
relocation a er a valedictory visit to the Asia-
Paci c region ahead of his forthcoming retirement.
"Singapore is a great aviation city, having built
its success on global connectivity. e government
has always facilitated a healthy aviation sector -- one
that can drive the greatest economic bene ts for
the national economy," he said. "Today, Singapore
is home to one of the world s top airlines and one
of its best airports. It will be a great host for the
e island nation, which last hosted the IATA
AGM seven years ago, also is home to the lobby
group s Asia-Paci c regional o ce. e meeting will
take place as carriers continue to recover from the
worldwide economic crisis, with airlines scheduled
to discuss efforts to improve environmental
performance, the implications of rising fuel prices
on weak pro tability, and potential technological
gains in e ciency. Operators also will hear the
results of IATA s 'Vision 2050 initiative.
Earlier this year, IATA announced a memorandum
of understanding (MoU) with the government
of Singapore "to facilitate further growth and
development" of its office, where 80 staff are
employed. e o ce supports the region from
Pakistan in the west, to Japan in the east, South
Korea in the north, and New Zealand in the south.
e Singapore government s support will enhance
the country s role as a regional aviation hub, said
The office s responsibilities include
communications, industry advocacy and technical
issues, and it is the centre for US$45 billion worth
of IATA members bank settlements annually.
Singapore "is an inspirational location between
India and China, two of our industry s largest
markets," Bisignani said.
The IATA chief met in Singapore with 35
"strategic thinkers" -- including the country s
Minister Mentor Lee Kuan Yew, Har vard
University professor Michael Porter, and airline
and airport chief executives -- to consider the future
of aviation up to 2050. e results of the seminar,
dubbed Vision 2050, will be presented to IATA
members at June s AGM.
"Despite [Singapore s] positive story, the global
situation is very challenging," Bisignani said.
"Aviation is a very special industry: almost US$600
billion in revenues and US$205 billion in debt, 32
million jobs and US$3,500 billion in economic
activity. But margins are pathetic."
Over the last 40 years, the industry s profit
margins have averaged just 0.1 percent --
appropriate for "a charity, not a business," Bisignani
said. "We would need 7-8 percent just [for] the cost
The Vision 2050 group discussed how to
improve nancial and environmental performance,
meet customer needs and develop more-e cient
infrastructure and aircra . Considerations included
"finding ways for airlines to become normal
businesses and support among governments for the
industry s sustainability so that we can 'grow the
jobs and economic activity that aviation supports
worldwide", the IATA chief said.
A major feature of discussions was the importance
of Asia to the future of commercial aviation.
is year IATA expects the global airline industry
to make a pro t of US$9.1 billion, of which US$4.6
billion will come from the region, said Bisignani.
"North American carriers will make US$3.2
billion, Latin American US$700 million, Middle
Eastern US$400 million, and European US$100
million. If you look at market capitalisation, you
will also see a shi eastward," he said.
According to Bisignani, four out of the ve
largest airlines by that measure are based in Asia:
Air China at a market capitalisation of US$20
billion, Singapore Airlines (SIA) at US$14
billion, Cathay Paci c with US$12 billion and
China Southern Airlines with US$11 billion.
"So the pro ts and the money are in this region,"
While in Singapore, Bisignani announced IATA s
2010-14 forecast, based on a sur vey of member
airlines, which together suggest that some 3.3
billion people will y in 2014. " at is 800 million
more than in 2009."
Of that additional number, 360 million, or 45
percent, will y within the Asia-Paci c region.
China will be at the centre of growth, with 181
million additional domestic travellers and 31
million new international passengers.
"In 2009, Asia-Paci c overtook North America
as the largest market by a few million. Both
accounted for about 26 percent of global tra c. By
2014, North America will fall to 23 percent and
Asia-Paci c will rise to 30 percent," according to
"The consensus is for 5.9 percent average
annual growth, [which] means 313 million more
international travellers over the forecast period," the
forecast predicted. Four of the ve fastest-growing
international markets are in Asia : China (growing
at 10.8 percent), the United Arab Emirates and
Vietnam (both at 10.2 percent), Malaysia (10.1
percent), and Sri Lanka (9.5 percent).
IATA sees a similar pattern in domestic markets,
which will generate 488 million new passengers
by 2014. Again, China will lead with 13.9 percent
growth, followed by Vietnam (10.9 percent), South
Africa (10.6 percent), India (10.5 percent) and the
Philippines (10.2 percent).
Predicted international cargo growth is also
dominated by Asia, with Hong Kong growing at
12.3 percent, China at 11.7 percent, Vietnam 11.4
percent, Taiwan 11.3 percent and the Russian
Federation at 11 percent.
IATA's Bisignani appraises Asia
Links Archive AAV March 2011. AAV May 2011 Navigation Previous Page Next Page