IATA Backs Carbon Neutrality Plan To Avoid Return of ETS

 - June 10, 2013, 11:20 AM
IATA director general and CEO Tony Tyler urged world governments to join his 240 airline members in backing a multilateral plan for market-based measures to achieve carbon neutrality for air transport by 2020. (Photo: IATA)

The International Air Transport Association (IATA) has endorsed a plan for global adoption of market-based measures (MBMs) to cut aircraft emissions, calling on world governments to agree to the move at ICAO’s Assembly later this year and so secure an alternative to Europe’s controversial emissions trading scheme (ETS). At its June 2 to 4 annual general meeting in Cape Town, South Africa, IATA “overwhelmingly” adopted a resolution called the Implementation of the Aviation Carbon Neutral (NCG2020) Strategy. The European Commission agreed last year to suspend the imposition of ETS on all international flights in and out of the European Union if ICAO adopts an equivalent global program when it meets in September.

“For governments, finding agreement on MBMs will not be easy,” said IATA director general and CEO Tony Tyler. “It was difficult enough for airlines given the potential financial implications. Bridging the very different circumstances of fast-growing airlines in emerging markets and those in more mature markets required a flexible approach and mutual understanding. But sustainability is aviation’s license to grow.”

Meanwhile, IATA has significantly upgraded its projections for airline profits this year. The association now says that its members will achieve a $12.7 billion collective profit, or $2.1 billion more than it projected in its previous forecast in March. Last year the total industry profit figure stood at just $7.6 billion. IATA expects this year’s profit margins to remain relatively weak, at just 1.8 percent on total revenues of $711 billion (compared with margins of 2.9 percent in 2007 and 3.3 percent in 2010).

“This is a very tough business,” said Tyler. “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.”

IATA, which has elected Delta Air Lines CEO Richard Anderson as its new chairman, also reaffirmed its support for a plan to develop an open, XML-based distribution standard for data exchange between airlines and travel agents known as the New Distribution Capability (NDC) initiative. The group, whose airline membership now stands at 240, has argued that NDC will give passengers a great array of flight and service options, thereby stimulating more demand.