IATA AGM:Airlines Urge Governments to Adhere to Global Slot Allocation Guidelines

The IATA (International Air Transport Association) is holding its Annual General Meeting (AGM) in Seoul, South Korea from 1st June to 3rd June, 2019. This is the 75th AGM of IATA. As part of the resolutions which were passed during this meeting, a significant one was about urging governments to adhere to global slot allocation guidelines. This is significant especially in India – which follows its own processes and cycles for allocating slots to domestic operations, while following the IATA calendar for the international allocation.

The AGM unanimously approved a resolution on slot policy, to reaffirm the importance of a harmonized global slot system and called upon governments to urgently address capacity shortages – said a press release by IATA.

The airports worldwide are classified from Level 1 to Level 3 with Level 3 being the most congested. More than 200 airports worldwide are Level-3, an indicating that they have insufficient capacity to meet current demand and these airports have to turn down requests of airlines for additional flights. Four airports in India – Delhi, Mumbai, Kolkata and Chennai are classified as Level 3 airports.

IATA believes that the number of Level 3 airports is set to rise substantially over the coming decade because airport construction if failing to keep pace with increased demand for aircraft movements and globally applied rules for the use of available capacity at constrained airports will become increasingly important.

The AGM also gave an updated guidance on profitability for 2019, downgrading its 2019 outlook to $28 billion from its earlier value of $35.5 billion, which was forecasted in December 2018. This was revised after considering the rising fuel prices and substantial weakening of world trade. This comes with a record number of airlines going bust in the last six to eight months including Jet Airways in India – which suspended operations in April.

IATA expected the cost of fuel to be $70 / barrel in 2019, which is 27.5% higher than $54.9 in 2017. Fuel accounts for 25% of operating costs for airlines worldwide while the number of over 40% in India. IATA expects that overall expenses will be up 7.4%. The global body expects airlines in Asia – Pacific to deliver a net profit of $6 billion, which translates into a profit per passenger of $3.51 and a net margin of 2.3%.

Overall the AGM endorsed five resolutions.

The IATA AGM also elected its new board and saw Ajay Singh – Chairman and Managing Director of Indian low cost carrier Spicejet be part of the new board. The appointment is for a period of three years. Spicejet, recently became an IATA member.

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