IATA chief Alexandre de Juniac flags pressing issues

Airlines are gathering for this year’s IATA AGM against a backdrop of pressing challenges, including the protectionist policies and trade wars pursued by some governments over the past 18 months, in the view of the association’s chief executive and director general Alexandre de Juniac.

Speaking to FlightGlobal on the eve of the AGM, which begins in Seoul on 1 June, de Juniac says airlines consequently have a mixed view of the current climate.

«The mood is balanced. There is some optimism because we are expecting significant growth in the coming two decades, and up to now the traffic is positive, at least for the passenger [business]. So from that point of view the mood is pretty positive,» he says.

IATA figures released ahead of the AGM show passenger traffic growth of 4.6% over the first four months of this year – fractionally behind the extra capacity added. But a combined growth rate of 3.7% for March and April shows expansion has been slowing, alongside a 3% drop in air cargo traffic over the first fourth months of the year.

«The headwinds we flagged when we disclosed our outlook six months ago are there,» notes de Juniac. «So the consequences of trade wars, the protectionist measures, the increase in oil price and in some costs, they have triggered more difficult economic conditions, and our members are living with these more difficult conditions and the impact on their profitability.

«Already we have seen the first quarterly results published, especially in Europe and in Asia, were below last year,» he says, noting that some of the recent airline collapses in those regions illustrate that conditions have become tougher.

Despite many of the geopolitical factors, such as the US-China trade war, being in play last year, de Juniac says their impact is only just becoming apparent.

«They were there but we were not suffering from the consequences of these measures. Now they are clearly impacting the financial situation, the market, the GDP growth,» he says.

«In terms of macro-economics, it is clear that geopolitical events have had an impact on the oil price, and that the trade wars and protectionist measures have had an impact on international trade – which is now flat.»

IATA will provide its latest financial outlook for the industry during the AGM. Its previous outlook, issued in December 2018, projected a small uptick in collective industry net profits to $35.5 billion in 2019…

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