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$6.7b profits for aviation industry Airline profits falling in ME.

Summary: Tony Tyler, the CEO of the International Air Transport Association (IATA), said that air safety is the IATA's biggest priority, as it strives to enable the civil aviation sector worldwide to achieve the highest level of in-flight safety and security.

By Khaled Salah Eddin from Geneva

Between January and November 2012, according to IATA statistics, there was only one aircraft accident for every 5.3 million flights.

The 243 airlines that are IATA members did not witness a single accident, because they follow the IATA safety procedures, with all the members having to meet the relevant ISO standards.

Aviation has become safer and more globally mobile, driving the IATA to launch more programmes to make this sector even more secure and safe, as he stressed during the media day organised by the IATA at its headquarters in Geneva.

He said that there have been fewer aircraft accidents. They have decreased by 57 per cent in the African continent, 74 per cent in the Caribbean and Latin America, and 60 per cent in the Far East.

This coincides with an increase in the number of airlines that have applied for the ISO programme to 384, including 141 non-members of the IATA.

Airlines who meet the ISO standards improved by 68 per cent last year. Of the accidents that have happened, 19 per cent occurred during takeoff or landing, 18 per cent because of malfunctioning brakes and 16 per cent when aircraft were parked at various airports.

The CEO of the IATA announced that the worldwide civil aviation sector has this year made a profit of $6.7 billion, representing 1 per cent of the volume of investments in the sector, which amount to $637 billion.

Forecasts indicate the profit may hit $8.4 billion in the coming year or 1.3 per cent of an expected investment of $659 billion.

Tyler added that he expected that the profits of the airlines in the Middle East to reach $800 million, with a profit margin 3 per cent higher than the global average, coming second to the United States with $1 billion.

He attributed the airlines' decline in profits to the economic situation in Europe and the political risks that still surround the region, despite the significant expansion of regional companies and fleets growing stronger in the long-haul markets.

The air cargo traffic, which was on the decline, has grown this year by 1.4 per cent to reach 46.5 million tons, probably rising next year to 47.1 million tons.

Tyler said that profits vary from area to area of the globe, with the profits of Asia Pacific companies due to reach $3.2 billion in 2013, up from $3 billion this year.

But Europe is still suffering from an economic downturn and airlines are expected to break even next year.

Meanwhile, airlines in North America have achieved profits of $2.4 billion, up from $1.7 billion last year, reflecting the upturn in the US economy and fleets now operating at their usual levels again.

In North America, the profit margin has hit 3.4 per cent, the highest in the world.

He said that the civil aviation sector worldwide provides 57 million jobs and pumps about $2.2 trillion into the world economy.

Airlines have handled 3 billion passengers this year, with this figure expected to rise to 3.6 billion in 2016, with a doubling in the volume of air traffic between Europe and Africa over the next three years helping to develop the African continent and create more jobs.

He said the tax imposed by governments in various countries on airline tickets is a major obstacle to growth in the volume of air traffic.

"England imposes the most tax, amounting to Au2.9 billion this year, a figure that will probably rise to Au3.3 billion in 2016."

The CEO of the IATA said that a number of new projects will be implemented by the International Air Transport Association over the next year, including the improving the level of service and helping airlines reduce their costs, as well as e-tickets and electronic boarding passes being issued via mobile phones, in addition to self-service kiosks at airports, allowing the passengers to choose their seats on the aircraft themselves.

Copyright Eltahir House 2012

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Publication:The Egyptian Gazette (Cairo, Egypt)
Date:Dec 18, 2012
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