“The accident investigation process is one of our most important learning tools when building global safety standards. But to learn from an accident, we need reports that are complete, accessible and timely,” said Willie Walsh, IATA’s Director General.

The requirements of the Convention of International Civil Aviation (Chicago Convention) Annex 13 are clear. States in charge of an accident investigation must:

• Submit a preliminary report to the International Civil Aviation Organization (ICAO) within 30 days of the accident.
• Publish the final report, that is publicly available, as soon as possible and within 12 months of the accident.
• Publish interim statements annually should a final report not be possible within 12 months.

Only 96 of the 214 accident investigations during the period 2018-2022 conform with the requirements of the Chicago Convention. Just 31 reports were published in less than one year of the accident with the majority (58) taking between 1–3 years. In addition to the fact that final reports regularly take more than a year, interim statements often provide little more than what was presented in the preliminary report.

“Over the past five years, fewer than half of the required accident reports meet the standards for thoroughness and timeliness. This is an inexcusable violation of requirements stated clearly in the Chicago Convention. As an industry we must raise our voice to governments in defense of the accident investigation process enshrined in Annex 13. And we count on ICAO to remind states that the publication of a complete accident report is not optional, it is an obligation under Annex 13 of the Chicago Convention,” said Walsh.

The article IATA urges states to provide timely, thorough and public accident reports first appeared in TravelDailyNews International.

Wine tourism is a growing segment of the global tourism industry, driven by increasing interest in wine and unique travel experiences. Popular destinations include traditional wine-producing regions like France, Italy, Spain, and the United States, as well as New World wine regions. Wine tourism offers a range of experiences such as winery tours, tastings, festivals, and workshops.

It has a significant economic impact, contributing to job creation and local business growth. Wine regions are investing in tourism infrastructure to enhance the visitor experience. Wine education and sustainability are important aspects of wine tourism. While the COVID-19 pandemic has affected the industry, it is expected to regain momentum as travel restrictions ease.

2018 to 2022 Global Wine Tourism Market Outlook Compared to 2023 to 2033 Forecast

The future outlook for the wine tourism market appears promising, with several factors shaping its growth. As travel restrictions ease post-pandemic, there is an expected recovery in the tourism industry, including wine tourism which is expected to grow at a 13.1% CAGR. Travelers are increasingly seeking authentic and experiential travel experiences, driving the demand for immersive wine tourism offerings. Emerging wine regions in countries like China, India, and Eastern Europe are gaining attention. Sustainability and responsible tourism practices are becoming more important, and wineries are adopting eco-friendly measures.

Technology and digital platforms are likely to play a larger role in enhancing the wine tourism experience. Niche and specialized segments within the market may emerge to cater to specific interests. Collaboration and partnerships between wineries, tour operators, and tourism boards can create comprehensive wine tourism experiences. However, it’s important to consider that market dynamics can be influenced by various factors, and the actual trajectory of the wine tourism market may differ from projections.

Comparative View of the Adjacent Wine Tourism Market

The peer or ancillary markets in the travel and tourism sector are expected to have an impact on the global Wine tourism business. These include the special interest and Food Tourism markets. Future Market Insights’ study of these connected industries revealed insightful findings that will be useful in creating distinctive differentiated strategies to pursue opportunity and success.

Key Dynamics in Wine Tourism Market Worldwide

• Wine Education and Experiential Learning: Wine tourists have a strong desire to deepen their knowledge and appreciation of wine. They seek educational experiences that provide insights into various aspects of winemaking, grape varieties, and wine tasting skills. Wineries have responded to this demand by offering educational programs, workshops, and guided tours. These experiences allow visitors to learn about the winemaking process, from vine to bottle, and gain a better understanding of the factors that contribute to wine quality and taste. Participants may have the opportunity to engage with winemakers, explore vineyards, and even participate in grape harvesting or wine blending activities. These educational experiences enhance visitors’ wine knowledge and create a deeper connection to the wine they enjoy.
• Promotional Efforts by Wine Regions: Wine regions are actively promoting their offerings and investing in wine tourism infrastructure to attract tourists and showcase their unique wine heritage. They recognize the economic and cultural value of wine tourism and the positive impact it can have on local communities. Wine regions organize wine festivals, events, and tastings to showcase their wines and attract visitors. They create wine trails, routes, or maps that guide tourists through the region, highlighting different wineries and vineyards along the way. Visitor centers and wine museums are established to provide information and serve as starting points for wine tourism experiences. These promotional efforts by wine regions aim to create a compelling and enticing destination for wine tourists, fostering local businesses and contributing to the overall growth of the wine tourism market.
• Seasonal and Weather Dependence: Wine tourism is influenced by seasonal and weather conditions, which can impact the availability of certain activities and visitor numbers. The timing of the grape harvest and winemaking seasons varies by region, and tourists may plan their visits to coincide with these periods to experience the excitement and energy of the grape harvest or participate in winemaking activities. However, this also means that certain activities may only be available during specific times of the year, limiting the options for wine tourists outside of these seasons. Additionally, unfavourable weather conditions such as heavy rains, frosts, or extreme heat can impact vineyard operations and potentially disrupt travel plans. These seasonal and weather dependencies can pose challenges for wine tourists in terms of planning their trips and experiencing specific activities.

France is considered as the Wine Capital of the World

France is renowned for its wine and attracts a significant number of wine tourists. Regions such as Bordeaux, Burgundy, and Champagne are particularly popular. Wine tourism in France offers a rich cultural experience, with visitors having the opportunity to explore historic vineyards, participate in tastings and cellar tours, and indulge in gourmet cuisine paired with local wines. The country has well-established wine routes and organized tours, making it easy for tourists to navigate and explore the diverse wine regions. The France wine tourism market contributed a significant share of 10.5% in the global market in 2022.

United States Offers a Diverse Landscape for Wine Enthusiasts

The United States boasts several prominent wine regions, including Napa Valley, Sonoma County, and Willamette Valley. Wine tourism in the U.S. offers diverse landscapes, from rolling vineyards to picturesque wineries. Visitors can enjoy tastings, vineyard tours, and culinary experiences. Wineries often provide educational opportunities to learn about the winemaking process and varietals specific to each region. Wine festivals and events, such as the Aspen Food and Wine Classic and the Oregon Wine Country Thanksgiving, also attract wine tourists. United States dominated the market with a share of 17.1% in 2022.

Australian Wine Tourism Market Gaining Prominence throughout the Globe

Australia’s wine tourism industry has flourished, with regions such as Barossa Valley, Margaret River, and Hunter Valley attracting both domestic and international visitors. Australian wine regions offer stunning landscapes, cellar door tastings, and guided tours that provide insights into the country’s diverse wine production. Visitors can also engage in activities like blending sessions, wine and food pairings, and hot air balloon rides over vineyards.

Category -wise Insights

The Prominent Age Group in Wine Tourism is 46-55 Years

The prominent age group in wine tourism tends to be the 46-55 age group, along with the over 55 age group which contributed 23.1% and 19.2% respectively in 2022. These age groups typically have more disposable income, are interested in culinary and cultural experiences, and may have developed a deeper appreciation for wine over time. They often have more flexibility in their schedules and may prioritize leisure travel, including wine tourism, as a way to relax and indulge in their interests. However, it’s worth noting that wine tourism can attract visitors from a wide range of age groups, and preferences can vary based on individual interests and circumstances.

Group Tours Dominates the Global Wine Tourism Market

The dominant segment in wine tourism on the basis of tour type can vary, but generally, group travels tend to be the most prominent. Group travels involve organized tours where a group of individuals travel together with shared itineraries and activities. They offer convenience and structure, making it easier for participants to visit wineries and enjoy wine-related experiences.

However, individual travel and professional groups also play significant roles in wine tourism, with independent travelers exploring wine regions on their own and professionals engaging in wine-related events and educational activities. The preference for a specific tour type depends on factors such as the destination, target audience, and the nature of the wine tourism experience being offered.

Online Channel is Gaining Traction in the Global Market

There are strict norms that are incorporated by the government for the protection of infrastructure of Wine areas and thus it is less likely that the tourist can have any in-person experience before actually visiting the place. Tourists as prefer online booking before booking the place they can go through the details and description of the place they can also avail of special discount offers available for the group.

Online bookings can be done for travel tickets, hotels and accommodations, stays, and other services availed while on tour. These bookings are done through online portals, airlines, and hotel websites and it is the most preferred booking channel when Wine tourism is concerned. The Segment is anticipated to grow at a CAGR of 13.3% during the forecast period.

Competitive Landscape

The wine tourism market has a diverse and competitive landscape, with various players contributing to its growth and development. Wineries and vineyards play a significant role by offering tours, tastings, and wine-related experiences. Wine tour operators curate itineraries and provide expert guides, while travel agencies and tour operators collaborate with local wineries to offer comprehensive wine-focused travel packages. Wine tourism associations and organizations support industry stakeholders through resources and collaborative initiatives.

For instance: Tour operators such as Wine Paths, Zephyr Tours, and BK Wine Tours offer special travel packages for exotic wine destination countries such as France, Italy, Spain, and United States.

The article FMI analysts view: Why is France a popular destination among wine tourists? first appeared in TravelDailyNews International.

The IATA AGM is a premier event in the aviation industry, bringing together influential leaders, industry experts, and stakeholders from around the globe. This year’s event promises to be a platform for engaging discussions, collaborative initiatives, and insightful sessions that shape the future of aviation.

As a trusted source of industry news, analysis, and thought leadership, Aviation-Event will be actively engaged throughout the event, providing comprehensive coverage, interviews, and highlights from the IATA AGM. With a dedicated team of aviation professionals, the platform aims to offer its readers an in-depth understanding of the key discussions, trends, and
innovations shaping the industry.

Aviation-Event’s presence at the IATA AGM 2023 will facilitate valuable networking opportunities with industry professionals, decision-makers, and experts. The team will be actively seeking out engaging conversations, exploring emerging trends, and capturing the pulse of the aviation community.

Marcel Riwalsky, CEO, Aviation-Event, stated: “We are thrilled to participate in the IATA AGM 2023, one of the most significant events in the aviation calendar.” Our goal is to provide our readers with unparalleled coverage and insights into the discussions and developments happening at the AGM. We look forward to connecting with industry leaders and contributing to the dialogue that shapes the future of aviation.”

Aviation-Event is a leading media platform dedicated to providing the latest news, analysis, and insights in the aviation industry. With a team of passionate aviation professionals, the platform aims to promote thought leadership, foster dialogue, and connect the global aviation community. Through its website, social media channels, and events, Aviation-Event delivers valuable content to a diverse audience of industry professionals, and decision-makers.

The article Aviation-Event participates in IATA AGM 2023, showcasing industry insights and thought leadership first appeared in TravelDailyNews International.

Reduction of problematic single use plastics products (SUPP) and improving the circularity in the use of plastics by the industry is the initial focus of the partnership as UNEP leads global efforts to develop an international legally binding instrument on plastic pollution, including in the marine environment, by the end of 2024.

Making aircraft cabins more sustainable is a priority for airlines and their passengers. The complex and asymmetrical regulatory environment, however, often poses an obstacle by preventing circular economy best practices. In the absence of a global approach, differing regulations at both ends of a journey severely limit the actions that airlines can take.

IATA advocates for a simplified and harmonized regulatory environment that would enable a reduction in plastic utilization and greater reuse, and recycling of cabin waste, including plastics, where they are needed. To this end, the partnership will step-up IATA’s engagement with UNEP to ensure that aviation’s unique challenges and opportunities are represented in the upcoming international legally binding agreement to end plastic pollution.

Already, IATA and UNEP are working on joint guidance on Re-thinking Plastics in Aviation. This comprehensive resource will encompass an overview of regulations, guidance on SUPP replacement, and recommended best practices for both industry and regulators.

“World Environment Day reminds us that sustainability is our number one global challenge. Formalizing IATA’s longstanding collaboration with UNEP will help airlines move even faster on improving the sustainability of the aircraft cabin. It’s critical that we achieve a harmonized global regulatory framework to enable airlines to implement more comprehensive and common circular economic solutions in all markets. For example, currently our hands are tied with outdated regulations focused on incineration rather than reuse and recycling. Modernizing that will be a big step forward for sustainability,” said Marie Owens Thomsen, IATA’s SVP Sustainability and Chief Economist.

“UNEP is looking forward to working with IATA, to helping the industry transition to net zero, reduce food waste and move away from SUPP. The aviation industry can also help by raising awareness among passengers and staff, and ensure that all stakeholders of the aviation value chain are engaged, and most importantly act in a joined-up way to end plastic pollution,” said Sheila Aggarwal-Khan, Director of UNEP’s Industry and Economy Division.

More than 400 million tonnes of plastic is produced every year, half of which is designed to be used only once. Of that, only nine percent is recycled, with the pollution it generates making it extremely urgent that global action is taken.

Under this partnership, IATA and UNEP also plan to work together on knowledge sharing, guidance and networking in other key sustainability challenges including sustainable aviation fuel (SAF), sustainable finance, climate adaptation, biodiversity conservation including preventing wildlife trafficking and sustainable tourism.

The article IATA and UNEP to address key environmental challenges in aviation including single-use plastics first appeared in TravelDailyNews International.

Whenever there is a delay or a cancellation, where specific passenger rights regulations exist, the burden of care and compensation falls on the airline, regardless of which part of the aviation chain is at fault. IATA therefore urged governments to ensure that responsibility for flight issues is shared more equitably across the air transport system.

“The aim of any passenger rights regulation surely should be to drive better service. So it makes little sense that airlines are singled out to pay compensation for delays and cancellations that have a broad range of root causes, including air traffic control failures, strikes by non-airline workers, and inefficient infrastructure. With more governments introducing or strengthening passenger rights regulations, the situation is no longer sustainable for airlines. And it has little benefit for passengers because it does not encourage all parts of the aviation system to maximize customer service. On top of this, as costs need to be recouped from passengers, they end up funding this system. We urgently need to move to a model of ‘shared accountability’ where all actors in the value chain face the same incentives to drive on-time performance,” said Willie Walsh, IATA’s Director General.

Economic deregulation of the airline industry has brought huge benefits over decades, increasing consumer choice, reducing fares, expanding route networks and encouraging new entrants. Unfortunately, a trend of re-regulation threatens to undo some of these advances. In the area of consumer protection, more than a hundred jurisdictions have developed unique consumer regulations, with at least a dozen more governments looking to join the group or toughen what they already have.

EU 261 needs to be reviewed

The Commission’s own data show that delays have increased since the existing EU 261 Regulation was introduced, even as the cost to airlines—and ultimately passengers—continues to balloon. It has become subject to more than 70 interpretations by the European Court of Justice, each of which serves to take the regulation further than originally envisaged by the authorities. The European Commission, along with the Council and Parliament, needs to revive the Revision of EU261 that was on the table before it was blocked by Member States. Any future discussions should address the proportionality of compensation and the lack of specific responsibilities for key stakeholders, such as airports or air navigation service providers.

Such a review is even more necessary when the EU Regulation is in danger of becoming a global template, with other countries, including Canada, the United States, and Australia, as well as some in Latin America and the Middle East, seeming to consider it a model, without recognizing that EU261 was never intended to address operational disruption and therefore does not apply equally to all actors in the aviation chain.

“In refusing to address the issue of distributing accountability more evenly across the system, EU261 has entrenched the service failings of some actors who have no inducement to improve. A classic example is the more than 20-year lack of progress toward the Single European Sky, which would significantly reduce delays and airspace inefficiency across Europe,” said Walsh.

An opportunity for the United Kingdom

With sensible reform of EU 261 stalled, the United Kingdom has an opportunity to incorporate some of the proposed revisions into the country’s post-Brexit model for passenger rights. Proper reform of ‘UK 261’ provides a gilt-edged opportunity for a genuine ‘Brexit dividend’ which the present pro-Brexit government should not ignore.

Canada is losing its reputation for good regulation

The situation in Canada is particularly disappointing because it has benefitted from a well-balanced regulatory regime up to now. An example is the explicit recognition of the primacy of safety, meaning that safety-related problems are not subject to compensation. Unfortunately, Canadian policymakers seem inclined to remove this important exception. Canada has also announced a “guilty until proven innocent” approach to airlines when there are delays or cancellations. These moves appear to be driven by internal Canadian party politics. Moreover, the government’s regulatory zeal appears to evaporate when it comes to holding government-run entities such as Border Services (CBSA) or Transport Security (CATSA) accountable for their performance.

One potential bright spot is that the National Airlines Council of Canada has put forward a model for shared accountabilities across the aviation value chain, including increased transparency, data reporting and service quality standards, an approach that could well have merit beyond Canada.

The United States—a solution in search of a problem

The US Department of Transportation is proposing to mandate compensation for delayed or cancelled flights when their own Cancellation and Delay Scoreboard shows that the 10 largest US carriers already offer meals or cash vouchers to customers during extended delays, and nine also offer complimentary hotel accommodation for passengers affected by an overnight cancellation. Effectively, the market is already delivering, while at the same time allowing airlines the freedom to compete, innovate and differentiate themselves in terms of their service offerings.

“It’s easy for a politician to regulate a new passenger rights law, it makes them look like they’ve achieved something. But every new unnecessary regulation is an anchor on the cost-efficiency and competitiveness of air transport. It takes a brave regulator to look at the situation and recognize when ‘less is more’. The history of this industry proves that less economic regulation unlocks greater choice and benefits for passengers,” said Walsh.

Passengers don’t agree there is an issue

There is little evidence passengers, outside of a few rare instances, are clamouring for stronger regulation in this area. An IATA/Motif survey of 4,700 travelers across 11 markets asked passengers how they were treated in the case of delays and cancellations. The survey found:

• 96% of travelers surveyed reported they were ‘very’ or ‘somewhat’ satisfied with their overall flight experience
• 73% were confident they would be treated fairly in the event of operational disruptions
• 72% said that in general airlines do a good job of handling delays and cancellations
• 91% agreed with the statement ‘All parties involved in the delay or cancellation (airlines, airports, air traffic control) should play a role in helping the affected passengers’

“The best guarantor of good customer service is consumer choice and competition. Travelers can and do vote with their feet if an airline – or indeed the entire aviation industry – doesn’t come up to scratch. Politicians should trust the public’s instinct and not regulate away the distinctive business models and choices available to travelers today,” said Walsh.

The article IATA: Aviation consumer protection regulation should address shared responsibilities first appeared in TravelDailyNews International.

• Inspirational Role Model: Poppy Khoza – Director of Civil Aviation, South African Civil Aviation Authority (SACAA)
• High Flyer: Camila Turrieta – Chair of the Diversity, Equity, Belonging, and Inclusion Committee, Air Line Pilots Association (ALPA), and First Officer, JetBlue Airways
• Diversity & Inclusion Team: Virgin Atlantic Airways

“In their fourth year, the IATA Diversity & Inclusion Awards play an important role in recognizing the work done by those who go above and beyond in engraining diversity and inclusion in the aviation industry. Through breaking taboos to introducing innovations and changing the status quo, this year’s winners exemplify the true nature of the industry: resilience, persistence and unhindered motivation to drive change,” said Karen Walker, Editor in Chief, Air Transport World and chair of the judging panel.

The other members of the judging panel include the winners of the 2022 awards: Güliz Öztürk, CEO, Pegasus Airlines; Kanchana Gamage, Founder and Director of the Aviatrix Project, and Alina Aronberga, SVP Human Resources, airBaltic.

“I congratulate the winners of the 2023 awards. By their example, they are leading the way to a gender balanced aviation industry. They have pushed boundaries to demonstrate that diversity and inclusion is fundamental to business success. Congratulations to three truly inspirational winners. Women are still under-represented in aviation, but with the help and example of these and previous award winners, we are making progress,” said Willie Walsh, IATA’s Director General.

Qatar Airways is the sponsor of the Diversity & Inclusion Awards for the fifth consecutive year. Each winner receives a prize of $25,000, payable to the winner in each of the categories or to their nominated charities.

The 2023 IATA Diversity & Inclusion Awards were presented during the World Air Transport Summit (WATS) which followed the 79th IATA Annual General Meeting in Istanbul, Türkiye.

Profiles
Inspirational Role Model: Poppy Khoza – Director of Civil Aviation, South African Civil Aviation Authority (SACAA)

The international respect for Poppy Khoza was evident in her unanimous election to serve as President for the 41st Assembly of the International Civil Aviation Organization in 2022. She was the first ever woman to hold that role in ICAO’s 78-year history.

At SACAA, Khoza’s work focuses on providing equal opportunities for women and she has led the transformation of the organization which now boasts women in 50% of executive roles. In her work, Khoza spares no effort in mentoring and coaching other women to challenge the status quo and create a more gender balanced aviation industry.

She is the recipient of numerous awards including the Aviation Sector and Regional Leader Award, Best Chief Executive Officer Award (2015 and 2018). She was also named the Business Leader of the Year during the annual Oliver Empowerment Awards (2018).

High Flyer: Camila Turrieta – Chair of the Diversity, Equity, Belonging, and Inclusion Committee, Air Line Pilots Association (ALPA), and First Officer, JetBlue Airways

At ALPA, Turrieta is the voice for diversity, equity and inclusion initiatives for the Association’s 63,000 pilots at 40 airlines. She leads ALPA’s efforts to use gender inclusive terms, expand the Association’s anti-harassment and anti-discrimination policy to promote an environment of inclusiveness in the piloting profession. This led to the FAA requesting her assistance in creating an inclusive culture through positive regulatory changes within the aviation sector.

Camila is a leader and mentor through her work with non-profit affinity organizations such as the Latino Pilots Association, Organization of Black Aerospace Professionals, Women in Aviation, and the International Society of Women Airline Pilots which have the common goal of promoting the piloting profession to underrepresented and marginalized communities.

All this led Camila to receive the President’s Call to Service Award under former US Presidents George W Bush and Barack Obama.

Diversity & Inclusion Team: Virgin Atlantic Airways
Virgin Atlantic Airways is a true pioneer in the area of diversity, equity and inclusion. To support the refresh of the airline’s “Be Yourself” strategy, the company introduced bold changes which included:

• Revising policies to allow visible tattoos while in uniform,
• Launching the reasonable workplace adjustment policy to ensure its employees with disabilities get the support they need,
• Transforming recruitment to remove barriers by focusing on inclusion and accessibility.

These changes were supported with digital training to create awareness and enable confident conversations among employees on the Be Yourself strategy. As a result of the successful implementation of the Be Yourself strategy, Virgin Atlantic’s internal employee network membership has increased over 120% while the company’s employee engagement scores for inclusion increased by 6 percentage points.

Alongside this, Virgin Atlantic Airways relaunched its pioneering “Passport to Change” program, which aims to address inequity in educational learning within local communities.

The article 2023 winners of IATA Diversity & Inclusion Awards announced first appeared in TravelDailyNews International.

In addition to creating a formal definition of how to define a travel subscription service and surveying the market to establish the current players in the US, the report also explores the history of subscription services in the travel sector and interviews experts such as Subscription Boom author Adam Levinter and eDreams founder Mauricio Prieto.

WayAway’s Director of PR, Janis Dzenis comments: “The relatively limited research we’d seen into travel subscriptions seemed to vary wildly in what was and what was not classified as either travel or a subscription – nor was much of it up-to-date or taking into account the long evolution of such services from as far back as 2011 when Usingmiles.com introduced the first plan. So we decided to set a baseline definition for the space and map out the universe of current players before conducting any analysis.

“What we found surprised us on two levels, firstly that there’s a lot less travel subscriptions services than you might think – only 49 in the US market. And secondly that so many of these are recent, from just the last few years, indicating a boom with a very clear trend for accelerated growth. We firmly believe that looking back years from now we´ll recognize that now was an inflection point.”

The article Research report shows true travel subscriptions services rare, but growing fast first appeared in TravelDailyNews International.

• Airline industry net profits are expected to reach $9.8 billion in 2023 (1.2% net profit margin) which is more than double the previous forecast of $4.7 billion (December 2022).
• Airline industry operating profits are expected to reach $22.4 billion in 2023, much improved over the December forecast of a $3.2 billion operating profit. It is also more than double the $10.1 billion operating profit estimated for 2022.
• Some 4.35 billion people are expected to travel in 2023, which is closing in on the 4.54 billion who flew in 2019.
• Total revenues are expected to grow 9.7% year over year to $803 billion. This is the first time that industry revenues will top the $800 billion mark since 2019 ($838 billion). Expense growth is expected to be contained to an 8.1% annual increase.

“Airline financial performance in 2023 is beating expectations. Stronger profitability is supported by several positive developments. China lifted COVID-19 restrictions earlier in the year than anticipated. Cargo revenues remain above pre-pandemic levels even though volumes have not. And, on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year,” said Willie Walsh, IATA’s Director General.

The return to net profitability, even with a 1.2% net profit margin, is a major achievement. First, it was achieved at a time of significant economic uncertainties. And second, it follows the deepest losses in aviation’s history ($183.3 billion of net losses for 2020-2022 (inclusive) for an average net profit margin of -11.3% over that period). It should be noted that the airline industry entered the COVID-19 crisis at the end of a historic profit streak that saw an average net profit margin of 4.2% for the 2015-2019 period.

“Economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs. After deep COVID-19 losses, even a net profit margin of 1.2% is something to celebrate! But with airlines just making $2.25 per passenger on average, repairing damaged balance sheets and providing investors with sustainable returns on their capital will continue to be a challenge for many airlines,” said Walsh.

Outlook Drivers

Revenues are rising (9.7%) faster than expenses (8.1%), strengthening profitability.

Revenue: Industry revenues are expected to reach $803 billion in 2023 (+9.7% on 2022 and -4.1% on 2019). An inventory of 34.4 million flights is expected to be available in 2023 (+24.4% on 2022, -11.5% on 2019).

• Passenger revenues are expected to reach $546 billion (+27% on 2022, -10% on 2019). With COVID-19 restrictions now removed in all major markets, the industry is expected to reach 87.8% of 2019 levels of revenue passenger kilometers (RPKs) for the year with strengthening passenger traffic as the year progresses. The high demand for travel in many markets is keeping yields strong with a modest 1.1% decline expected in 2023 compared to 2022 levels (following increases of 9.8% in 2022 and 3.7% in 2021).

Efficiency levels are high with an expected average passenger load factor of 80.9% for 2023. That is very near the 2019 record performance of 82.6%.

IATA’s May 2023 passenger polling data supports the optimistic outlook, with 41% of travelers indicating they expect to travel more in the next 12 months than in the previous year and 49% expect to undertake the same level of travel. Moreover, 77% of respondents indicated that they were already traveling as much or more than they did pre-pandemic.

Expenses are expected to grow to $781 billion (+8.1% on 2022 and -1.8% on 2019).

• Jet fuel costs are expected to average $98.5/barrel in 2023 for a total fuel bill of $215 billion. That is cheaper than the $111.9 / barrel previously expected (December 2022) and the average cost of $135.6 experienced in 2022.

High crude oil prices were exaggerated for airlines as the crack spread (premium paid to refine crude oil into jet fuel) averaged more than 34% for 2022—significantly above the long-run average. As a result, fuel was responsible for almost 30% of total expenses. In recent months, the crack spread has narrowed, and the full year average crack spread is expected to fall to around 23%, which is more closely aligned with the historical average rate. Fuel costs will account for 28% of the average cost structure, which is still above the 24% of 2019.

• Non-Fuel expenses have been controlled well by airlines despite inflationary pressures. With fixed costs being distributed over a larger scale of activity, non-fuel unit costs per available tonne kilometre (ATK) are expected to fall to 39 cents per ATK. That is -6.4% compared to 2022 (41.7 cents /ATK) and marks a return to about pre-COVID levels. Total non-fuel costs are expected to reach $565 billion in 2023.

Risks

The economic and geopolitical environment presents several risks to the outlook. With just $22.4 billion of operating profit (2.8%) standing between $803 billion of revenues and $781 billion in expenses, industry profitability is fragile and could be affected (positively or negatively) by a number of factors. In particular, consideration should be given to:

• Inflation fighting measures are maturing at different rates in different markets. Central banks are calibrating the best levels for interest rates to have a maximum cooling effect on inflation while avoiding tipping economies into recession. An early or lower end to rate rises could stimulate markets for a stronger year-end outlook. Equally, the risk of recession remains. Should recession lead to job losses, the industry’s outlook could shift negatively.
• War in Ukraine is not having a major impact on profitability for most airlines. A currently unanticipated peace could carry the potential for cost improvements with lower oil prices and efficiencies from the removal or easing of airspace restrictions. An escalation, however, would likely have negative prospects for global aviation. Already broader geopolitical tensions are weighing upon international trade and any escalation of such tensions represents a downside risk to the industry outlook.
• Supply chain issues continue to impact global trade and business. Supply chains are shifting to fill gaps in resilience caused by current geopolitical tensions and the challenges experienced during COVID-19. Airlines have been directly impacted by aircraft parts supply chain ruptures which aircraft and engine manufacturers have failed to sort out. This is negatively impacting the delivery of new aircraft and the ability of airlines to maintain and deploy existing fleets.
• Regulatory cost burdens are at risk of increase from increasingly interventionist regulators. In particular, the industry could face rising costs of compliance for increasingly punitive passenger rights regimes and regional environment initiatives.

Regional Round Up

While the global airline industry is expected to return to profitability in 2023, financial performance across regions remains diverse. The positive news is that industry financials are improving in all regions from the COVID-related depths of 2020, although not all regions are expected to deliver a profit this year.

North American Carriers

North America remains the standout region in terms of financial performance. Consumer spending has remained solid, despite cost-of-living pressures, and the demand for air travel remains robust; air passenger demand is forecast to exceed its pre-COVID (2019) level this year.

European Carriers

Notwithstanding the various capacity constraints experienced over the summer period, European carriers were able to return to profit in 2022. That profitability will strengthen further in 2023. The key regional risks relate to the war in Ukraine, labor unrest and concerns about economic performance in some key countries.

Asia-Pacific Carriers

Now that all economies in the region have lifted COVID travel restrictions, the industry recovery is underway. A sharp rise in both passenger volumes and capacity is expected to be reflected in a sizeable improvement in 2023 financial results and a narrowing of the gap to other regions.

Middle East Carriers

The region’s return to profitability in 2022 was supported by a significant increase in the passenger load factor of almost 25 percentage points, outstripping the performance of the other regions. At the same time, Middle East carriers have been swiftly rebuilding their international networks and in March 2023, the region’s international connectivity had returned to 98% of its pre-COVID level.

Latin America Carriers

Passenger volumes are recovering quickly, but the financial performance varies considerably across the region. The region will remain in the red, although some airlines are expected to post solid profits. Overall, industry financial performance is expected to continue to improve, but a challenging economic backdrop in a number of countries in the region is dampening the pace of recovery.

African Carriers

Africa remains a difficult market in which to operate an airline, with economic, infrastructure and connectivity challenges impacting the industry performance. Nonetheless, despite these challenges, there is still robust demand for air travel in the region which underpins the continued move towards a return to overall industry profitability.

2022

The improvement in industry financial performance in 2022 outpaced previous expectations. Net industry losses for 2022 are now estimated to be -$3.6 billion, a strengthening from the previously estimated -$6.9 billion loss (December 2022). At the operating level, and notwithstanding the wide variation in performance, the latest data point to the industry having returned to profit in 2022 on a pre-tax basis.

“Resilience is the story of the day and there are many good reasons for optimism. Achieving profitability at an industry level after the depths of the COVID-19 crisis opens up much potential for airlines to reward investors, fund sustainability, and invest in efficiencies to connect the world even more effectively. That’s a big ‘to do’ list to achieve with just a 1.2% net profit margin. That’s why we call on governments to keep their focus on initiatives that will strengthen safe, sustainable, efficient, and profitable connectivity,” said Walsh.

“Priorities for 2023 include SAF production incentives to accelerate progress toward net zero carbon emissions, ensuring the integrity of CORSIA as the economic measure applied to international aviation, eliminating inefficiencies in air traffic management and applying global standards consistently,” said Walsh.

Passengers are counting on a safe, sustainable, efficient and profitable airline industry. A recent IATA poll of travelers in 11 global markets revealed that 81% of those surveyed emerged from the pandemic with a greater appreciation of the freedom that flying makes possible. The same study also demonstrated the important role that travelers see the airline industry playing:

• 90% said that connectivity by air is critical to the economy
• 91% said that air travel is a necessity for modern life
• 88% said that air travel has a positive impact on societies
• 82% said that the global air transport network is a key contributor to the UN Sustainable Development Goals (SDGs)
• 96% expressed satisfaction with their last flight, and
• 77% said that flying was good value for money.

Economic Outlook presentation
Global Outlook for Air Transport Report
Industry Statistics Data Tables

The article Airline industry total revenues are expected to grow 9.7% y-o-y to $803 billion, says IATA first appeared in TravelDailyNews International.

“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation,” said Willie Walsh, IATA’s Director General.

The top five countries account for 68.0% of blocked funds. These comprise:

• Nigeria ($812.2 million)
• Bangladesh ($214.1 million)
• Algeria ($196.3 million)
• Pakistan ($188.2 million)
• Lebanon ($141.2 million)

IATA urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities.

The article Blocked airline funds threaten connectivity first appeared in TravelDailyNews International.

“On behalf of the board of Star Alliance, I would like to congratulate Theo for being named the next CEO of Star Alliance,” said Scott Kirby, CEO of United Airlines and Chairman of the Star Alliance Chief Executive Board. “Theo’s international commercial and airline experience have given him a good understanding of the challenges and opportunities facing our industry today. I believe he is the right person to lead Star Alliance into the future.”

“Star Alliance connects the world,” said Mr Panagiotoulias. “More than 200 million customers fly with its 26 member airlines each year, on more than 16,000 flights each day. The Alliance has also led the revolution to promote a more seamless passenger experience. I am honoured that I’ve been chosen to lead the Star Alliance team and work directly with our 26 member carriers, as we continue to innovate as the world’s leading airline alliance.”

Mr Panagiotoulias will succeed Charlotta Wieland, who has been seconded from SAS – Scandinavian Airlines to serve as Star Alliance’s interim CEO since January 2023. With Mr Panagiotoulias coming on board, Ms Wieland will return to SAS, and also rejoin Star Alliance’s Alliance Management Board as the representative for SAS. Mr Panagiotoulias’ appointment is expected to take effect within the coming months, upon the completion of certain administrative processes and clearances.

“On behalf of Star Alliance and its member carriers, I would like to thank Charlotta for her service to Star Alliance as interim CEO, and welcome her back to her seat on the Alliance Management Board,” said Mr Kirby.

Star Alliance was named the World’s Best Airline Alliance by Skytrax in 2022. It aims to facilitate a seamless, high-quality traveller experience across its 26 member carriers, with smooth transfers across an extensive global network, together with rewards and recognition for frequent international travellers.

In 2022, the Alliance celebrated its 25th anniversary as the longest-running international airline alliance. It also marked several important milestones, including the launch of the world’s first airline alliance credit card with HSBC Australia, and the formation of an intermodal travel model, which extends the Alliance’s network beyond air travel to other transport ecosystems, such as rail networks.

The article Star Alliance names Theo Panagiotoulias as new CEO first appeared in TravelDailyNews International.