Geopolitical tensions, aircraft shortages, and environmental goals will challenge global airline leaders at the IATA summit next week.
What Happened: The International Air Transport Association (IATA) will hold its annual meeting from June 2-4 in Dubai, Reuters reported on Friday. The summit will address the challenges posed by geopolitical tensions, aircraft shortages, and ambitious environmental targets.
Aviation leaders have noted that the pandemic’s impact on the industry is now behind them, with the sector returning to profitability in 2023. Air passenger traffic has reached 2019 levels, and global airline capacity in the second quarter of 2024 is 4% higher than in 2019, according to OAG data.
However, airlines are facing pressure on yields due to rising costs and increased competition. Geopolitical conflicts are causing longer routes, and the industry is under scrutiny for its net-zero carbon emissions target by 2050, adopted by IATA in 2021.
Airfares in Europe and Asia are starting to plateau or fall, indicating a slowdown in the post-COVID travel boom.
“The year ahead could be challenging for aviation,” said Luis Gallego, head of British Airways owner IAG, in their annual report.
“The jury is out and there is a lot to be done,” Airbus EADSY CEO Guillaume Faury told last week at the VivaTech conference.
Singapore Airlines reported moderating passenger yields after posting record profits for the second consecutive year. OAG analyst John Grant described the global industry as a “mixed bag,” with exceptional results in 2023 and 2024 but signs of softening now.
Why It Matters: The upcoming IATA summit is critical as it comes on the heels of significant turbulence incidents affecting major airlines. Last week, Singapore Airlines altered its policies and flight routes following a fatal turbulence incident.
Just days later, on May 27, Qatar Airways experienced mid-air turbulence, injuring twelve passengers.
Meanwhile, Boeing Co's BA ongoing production issues are causing uncertainty in its supply chain. The Federal Aviation Administration has limited Boeing's production of the Max to 38 per month. The company is currently producing fewer than that but plans to increase output to 38 in the second half of the year.
Image: Shutterstock/ vivooo
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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