Annual Review 2023

IATA

Annual

Review

2023

Contents

IATA Annual Review 2023

03 Members’ list

05 Willie Walsh, Director General

08 Mehmet T. Nane, Chair, Board of Governors

11 Members of the Board of Governors

12 Economics

21 Regulations

27 Environment and Sustainability

31 Diversity & Inclusion

33 Passenger Experience

35 Cargo

37 Safety

42 Security

45 Modern Airline Retailing

48 Financial Services

Contents

International Air Transport Association

Annual Review 2023

79th Annual General Meeting and

World Air Transport Summit, Istanbul, Türkiye

Members’ list

IATA Annual Review 2023

ABX Air

Aegean Airlines

Aer Lingus

Aero Republica

Aeroot

Aerolineas Argentinas

Aeromexico

Africa World Airlines

Afrijet

Air Algerie

Air Arabia

Air Astana

Air Austral

Air Baltic

Air Botswana

Air Burkina

Air Cairo

Air Caledonie

Air Canada

Air Caraibes

Air Changan

Air China

Air Corsica

Air Dolomiti

Air Europa

Air France

Air Guilin

Air India

Air Koryo

Air Macau

Air Madagascar

Air Malta

Air Mauritius

Air Moldova

Air New Zealand

Air Niugini

Air Nostrum

Air Peace

Air Serbia

Air Seychelles

Air Tahiti

Air Tahiti Nui

Air Tanzania

Air Transat

Air Vanuatu

AirBridgeCargo Airlines

Aircalin

Airlink

Alaska Airlines

Albastar

Allied Air

AlMasria Universal Airlines

Amapola Flyg

Amelia (Regourd Aviation)

American Airlines

ANA

APG Airlines

Arkia Israeli Airlines

Asiana Airlines

ASKY

ASL Airlines Belgium

ASL Airlines France

ASL Airlines Ireland

Atlantic Airways

Atlas Air

Austrian

Avianca

Avianca Costa Rica

Avianca Ecuador

Azerbaijan Airlines

Azores Airlines

Azul Brazilian Airlines

Badr Airlines

Bahamasair

Bamboo Airways

Bangkok Airways

Batik Air

Batik Air Malaysia

Belavia Belarusian

Airlines

Biman Bangladesh Airlines

Binter Canarias

BoA Boliviana de

Aviacion

Braathens Regional

Airways

British Airways

Brussels Airlines

Bulgaria Air

Camair-Co

Cambodia Angkor Air

Capital Airlines

Cargojet Airways

Cargolux

Caribbean Airlines

Carpatair

Cathay Pacic

Cebu Pacic

CemAir

Challenge Airlines (BE)

Challenge Airlines (IL)

China Airlines

China Cargo Airlines

China Eastern

China Express Airlines

China Postal Airlines

China Southern Airlines

CityJet

Condor

Congo Airways

Copa Airlines

Corendon Airlines

Corsair International

Croatia Airlines

Cubana

Cyprus Airways

Czech Airlines

Delta Air Lines

DHL Air

DHL Aviation

Eastern Airlines

Eastern Airways

Edelweiss Air

Egyptair

EL AL

Emirates

Ethiopian Airlines

Etihad Airways

EuroAtlantic Airways

European Air Transport

Eurowings

EVA Air

FedEx Express

Fiji Airways

Finnair

Fly Baghdad

ydubai

FlyEgypt

Flynas

Flyone

Freebird Airlines

French Bee

Fuzhou Airlines

Garuda Indonesia

Georgian Airways

German Airways

GlobalX

GOL Linhas Aereas

Gulf Air

GX Airlines

Hahn Air

Hainan Airlines

Hawaiian Airlines

Hebei Airlines

Hi Fly

Hong Kong Air Cargo

Hong Kong Airlines

Hong Kong Express

Airways

Iberia

Iberojet Airlines

Icelandair

IndiGo

Iran Air

Iran Airtour Airline

Iran Aseman Airlines

Israir

ITA Airways

Japan Airlines

Japan Transocean Air

Jazeera Airways

Jeju Air

JetBlue

Jin Air

Jordan Aviation

Juneyao Airlines

Members’ list

IATA Annual Review 2023

Kam Air

Kenya Airways

KLM

Korean Air

Kunming Airlines

Kuwait Airways

La Compagnie

LAM

Lao Airlines

LATAM Airlines Brasil

LATAM Airlines Colombia

LATAM Airlines Ecuador

LATAM Airlines Group

LATAM Airlines Paraguay

LATAM Airlines Peru

LATAM Cargo Brasil

LATAM Cargo Chile

Loong Air

LOT Polish Airlines

Lucky Air

Lufthansa

Lufthansa Cargo

Lufthansa CityLine

Luxair

Malaysia Airlines

Mandarin Airlines

Martinair Cargo

MasAir

Mauritania Airlines

International

MEA

MIAT Mongolian Airlines

MNG Airlines

Myanmar Airways

International

Myanmar National

Airlines

National Airlines

Neos

Nesma Airlines

Nile Air

Nippon Cargo Airlines

NordStar

Nordwind Airlines

Nouvelair

Okay Airways

Olympic Air

Oman Air

Overland Airways

Pakistan International

Airlines

Paranair

Pegas Fly

Pegasus Airlines

PGA Portugalia Airlines

Philippine Airlines

Polar Air Cargo

Poste Air Cargo

Precision Air

Privilege Style

Qantas

Qatar Airways

Qazaq Air

Ravn Alaska

Rossiya Airlines

Royal Air Maroc

Royal Brunei

Royal Jordanian

Ruili Airlines

RusLine

RwandAir

S7 Airlines

Safair

SAS

SATA Air Acores

Saudi Arabian Airlines

SCAT Airlines

Scoot

SF Airlines

Shandong Airlines

Shanghai Airlines

Shenzhen Airlines

Sichuan Airlines

Silk Way West Airlines

Singapore Airlines

SKY Airline

Smartavia

Smartwings

Solomon Airlines

Somon Air

South African Airways

SpiceJet

SriLankan Airlines

SunExpress

Suparna Airlines

SWISS

Syrianair

TAAG Angola Airlines

TACA

TAG Airlines

TAP Air Portugal

TAROM

Tassili Airlines

Thai Airways International

Thai Lion Air

Thai Smile

Tianjin Airlines

TUIy

Tunisair

Turkish Airlines

T’way Air

Ukraine International

Airlines

UNI AIR

United Airlines

UPS Airlines

Ural Airlines

Urumqi Air

UTair

Uzbekistan Airways

Vietjet

Vietnam Airlines

Virgin Atlantic

Virgin Australia

Vistara

Voepass Linhas Aereas

Volaris

Volotea

Vueling

Wamos Air

West Air

WestJet

White Airways

Wideroe

World 2 Fly

Xiamen Airlines

YTO Cargo Airlines

Willie Walsh, Director General

IATA Annual Review 2023

WILLIE WALSH, DIRECTOR GENERAL

Growing stronger

as an association

and an industry

s the COVID-19 pandemic

receded, the world

rapidlyreconnected

usingair travel.

Throughout 2022, countries

progressively eased or ended

travel restrictions, with China

being the last major market

to do so. The desire of people

to resume travel has been

truly impressive, with traveler

numbers reboundingfurther

with every new border opening.

Globally, passenger demand is

not expected to fully return to

pre-COVID-19 levels until 2024,

but rapid progresswas already

clearlyevident as 2022 closed.

Air cargo’s performance took a

dierent route. The sector was a

IATA Annual Review 2023

lifeline during the COVID-19 crisis.

At its peak in 2021, volumes and

revenues were tracking above

pre-pandemic levels. Economic

uncertainties and government

measures to tame ination have

taken their toll. With global trade

falling, air cargo volumes slipped

below 2019 levels. Nonetheless,

revenues have stayed strong.

Air cargo’s contribution to airline

revenues in 2022 was 17% of total

revenues, considerably higher than

the 12% in 2019.

After a cumulative loss of over $180

billion over the 2020-2022 period,

the airline industry is on track to

post a collective prot in 2023.

The industry performed well on

keychallenges in 2022.

Sustainability: The adoption of the

Long-Term Aspirational Goal at the

Assembly of the International

Civil Aviation Organization (ICAO),

aligned governments with the

industry’s commitment to achieve

net zero carbon emissions by

2050. The ICAO Assembly also

reset the baseline for the Carbon

Osetting and Reduction Scheme

for International Aviation (CORSIA)

to 85% of 2019 emissions, with

the promise that it would be the

sole nancial measure applied

to manage emissions from

international operations.

The industry now expects

governments to deliver polices

enabling aviation’s energy

transition and upholding the

integrity of CORSIA. To date,

however, we have not seen

governments providing sucient

production incentives to ramp up

the supply of sustainable aviation

fuels (SAF). And many governments,

including several in Europe, are

contemplating placing additional

nancial burdens on aviation in the

name of the environment that will

undermine CORISA and reduce

the industry’s nancial capacity to

invest in sustainability eorts.

Safety: The industry’s safety

performance in 2022 exceeded

2021 and the ve-year average

(2018-2022) on several key

metrics. A key indicator of this

performance is the reduction

in fatality risk, which was 0.11 in

2022, below the ve-year average

of 0.13. Importantly, the IATA

Operational Safety Audit (IOSA)

remains a valuable tool in the

industry’s safetyeorts. In 2022,

the performance of airlines on the

registry (measured by the accident

rate) was four times better than

carriers not on the registry.

As the audit marks its 20

year,

the program is being renewed

with a risk-based focus that will

strengthen its eectiveness.

Diversity and Inclusion: IATA’s

agship 25by2025 initiative

to improve gender balance in

aviation has grown to include 176

signatories. The most remarkable

gain reported by the signatories

“To date we have not seen

governments providing

sucientproduction incentives

to ramp up the supply of

sustainable aviation fuels (SAF).”

IATA Annual Review 2023

is anincrease in technical roles

performed by women from 12%

in 2021 to 18% in 2022. Across

IATA’s membership, the number of

female CEOs continues to grow,

reaching 28. These developments

are a beacon ofchange for the

entireindustry.

Advocacy: On the advocacy front,

there is continuous eort to remind

governments of the importance of

policies and regulations that enable

safe, ecient and sustainable

operations. Public opinion polling

reveals an understanding that

aviation is a critical economic

contributor (90%), that it provides

customers with good value

for money (77%), and is a key

contributor to the UN’s Sustainable

Development Goals (82%).

Government actions, however, do

not reect this. The Netherlands,

for example, is a perfect storm of

value-destroying regulatory eorts.

IATA joined forces with other

industry stakeholders in a legal

action that has temporarily halted

the government’s plan to slash

Schiphol Airport’s capacity by 12%,

ostensibly to manage noise impact.

The government alsotripled its

passenger tax to €26.43. And

despite severe operational chaos

atSchiphol in 2022, the government

is rewarding the airport by allowing

it to continue a massive 37%

increase in user charges over

three years. And to top it o, the

government plans to reduce

groundhandling competition.

The under-appreciation of aviation

is, of course, not limited to the

Netherlands. We must remain vigilant

in all locations to ensure that airlines

are supported by policies that are

aligned with global standards and

which facilitate our important role in

social and economic development

the world over.

Your association

IATA remains dedicated to

supporting the industry with the

high-performing IATA Financial

Settlement Systems. In 2022 the

IFSS processed $363.3 billion

excluding $18.5 billion in refunds. It

did so while maintaining extremely

high levels of eciency and security.

IATA’s own nances are strong, and

membership is growing. Some 304

carriers spread around the world

and covering every business model

are counted in the IATA fold.

Lastly, I am proud to lead a talented,

diverse, and global IATA team that

is at your service with reliable

products, eective advocacy

andcritical global standards.

Willie Walsh,

Director General

“IATA remains dedicated to

supporting the industry with

the high-performing IATA

Financial Settlement Systems.”

Mehmet T. Nane, Chair of the IATA Board of Governors

IATA Annual Review 2023

MEHMET T. NANE, CHAIR OF THE IATA BOARD OF GOVERNORS

Policy support from

governments is vital

What has been the focus





It has been an honor to serve

as IATA’s Chair of the Board of

Governors, especially at a time

when the industry was emerging

from its worst downturn. As we

have continued to rebuild global

connectivity at great pace, we have

been addressing such priorities as

sustainability, diversity, regulation,

operational challenges, and

infrastructure costs.

My tenure as Chair primarily focused

on three areas. First, our external

focus was on the industry’s recovery

after the pandemic-induced

shutdown. We emphasizedthe

signicance of reinstating

connectivity to government and

collaboration with industry partners

to facilitate a smooth restart of

markets. Despite encountering some

challenges at certain airports and

with Air Navigation Service Providers

(ANSPs), the industry as a whole

successfully resumed operations.

Second, IATA also made signicant

progress in its commitment to

achieving net zero carbon emissions.

We engaged in substantial behind-

the-scenes eorts to outline detailed

pathways toward reaching net zero.

Additionally, we held discussions

with governments to advocate

for increased policy support for

sustainable aviation fuels (SAF). In

2022, the International Civil Aviation

Organization (ICAO) adopted a

Long-Term Aspirational Goal (LTAG)

for 2050 net zero carbon emissions,

and this made aviation a unique

sector where both the industry and

the regulating states are committed

toone target.

Mehmet T. Nane, Chair of the IATA Board of Governors

IATA Annual Review 2023

Third, diversity and broadening

IATA’s membership have been other

strong focuses and 2022 was a

particularly important year as we

achieved the milestone of 50% of

IATA members joining the 25by2025

voluntary initiative. This will drive a

more diverse and inclusive aviation

industry particularly regarding female

representation. We are witnessing

real change. From a handful of female

airline CEOs just a few years ago,

there were 28 among IATA member

airlines as of March 2023.

Internally, I also worked alongside

Willie, the Board, and IATA senior

management to ensure that IATA

eectively serves its members and

delivers value. We acknowledge

and appreciate the hard work of

the entire IATA team, while at the

same time, seeking opportunities to

foster innovation, responsiveness,

and a stronger advocacy for the

industry we love.











We do see broad support for the

industry considering the economic,

social, and strategic importance

of aviation. However, there are

certainly areas in which we would

like to see better policies in place

to support aviation’s success,

especially as we need to work

ever closer to develop a more

sustainable industry. As well as

the need to expand investment in

ecient infrastructure and air trac

management systems, it’s essential

that governments develop a more

unied global regulatory framework

and fair taxation system. Indeed, the

pandemic period brought this need

further into the spotlight.

When it comes to operational

eciencies, it is crucial for

governments to play their part. The

Single European Sky (SES) initiative,

which could reduce Europe’s air

transport emissions up to 10%

using existing technology, has not

been eectively implemented.

Furthermore, billions in European

environment taxes have not

contributed to SES, SAF usage,

or emission reductions. These

taxes simply make ying more

expensive without enhancing

aviation eciency or addressing

environmental concerns.

In contrast, airlines have shown

commitment by investing $17

billion in forward purchase SAF

agreements in 2022 alone.

Regardless of price, airlines

have utilized all available SAF.

Encouragingly, the demand from

airlines prompted a signicant

increase in SAF production in 2022

with the prospect of reaching

30 billion liters of SAF in 2030.

Although there is undeniable

momentum, there is still work to

bedone, and government policies

will play a crucial role in shaping

thefuture of sustainable aviation.

Fuel is the greatest challenge in our

path toward decarbonizing aviation

as SAF remain limited in availability

and signicantly more expensive

than conventional jet fuel.

Governments should assess the

signicance of locally producing

SAF, oer incentives to boost

production, ensure aordability

andencourage adoption for airlines.

These actions will be incremental in

moving towards our net zero target.







Aviation leaders face many

challenges. In the short term,

we have a variety of economic

challenges, especially the global

inationary pressures. Geopolitical

crises continue to aect the world,

destabilizing globalization and

threatening global supply chains.

The airline industry is having

to x balance sheets carrying

debts of $650 billion, requiring

strategic measures to stabilize

andstrengthen nancial positions.

“Diversity and

broadening IATA’s

membership have

been other strong

focuses and 2022

was a particularly

important year.”

Mehmet T. Nane, Chair of the IATA Board of Governors

IATA Annual Review 2023

In the longer term, the path to

realize the commitment to net zero

carbon emissions also comes with

its challenges, together with the

pace of digital transformation, and

regulatory challenges to ensure

airlines remain competitive and

resilient in the evolving aviation

industry. But there’s certainly room

for optimism, particularly when

we see how strong the pace of

recovery has been from aviation’s

worst downturn in living memory.













Airlines play a vital role during

natural disasters by providing

transport, facilitating evacuation and

rescue eorts, and delivering aid.

With their ight networks and eet,

they can quickly deploy resources,

assisting in the prompt delivery of

aid to the impacted regions.

We are experiencing challenging

times as a country. The pain we felt

in the aftermath of the earthquake

catastrophe on 6 February 2023

is still fresh. I would like to again

commemorate those who lost their

lives—may they rest in peace—and

wish a swift recovery to the injured.

Aviation played a signicant role

in the immediate aftermath. From

the moment that the earthquake

occurred, airlines across the world

rallied to help. At least 3,500 tons

of aid from over 90 countries was

own in. Pegasus Airlines alone

evacuated 157,000 people from

the earthquake zone, transported

110 tons of aid materials at no cost

and facilitated the transportation

of more than 120,000 people and

rescue teams to the disaster zone.

These eorts highlight the vital role

that airlines and aviation play during

times of crises. We recognise the

need for long-term solidarity and,

as the Pegasus Team, alongside

many others in the aviation and

travel sector, we continue to do our

part in assistance eorts, to sustain

this support on a long-term basis.





Lack of female representation

in aviation, a traditionally male

dominated industry, remains a

signicant issue. Although there

have been notable advancements

in promoting diversity, there is still

much work to be done. According

to FlightGlobal’s latest research of

women in the C-suite, although the

number of women CEOs among

the top 100 passenger carriers has

increased from 6 to 12 in the past

year, indicating a positive trend,

there has been a decline in female

representation in other C-level

positions, highlighting the need for

continued eorts. Achieving gender

balance is not limited to C-level

roles, but extends to all professions,

including pilots, technicians, and

beyond. Diversity also extends

beyond gender balance. It means

ensuring that every voice is heard

and valued, as diverse perspectives

bring immense value to the industry.

Role models play a crucial role

in inspiring and empowering

people from diverse backgrounds

to pursue careers in aviation,

and it is also important to reach

the young. Indeed, it is good to

see that many companies are

taking steps to increase female

employment through Cadet Pilot

training programs and young talent

programs. At Pegasus Airlines, we

“From the moment

that the earthquake

occurred, airlines

across the world

rallied to help.”

Mehmet T. Nane, Chair of the IATA Board of Governors

IATA Annual Review 2023



As at 15 May 2023

1. 

President and Chief

Executive Ocer



2. 

Chief Executive Ocer



(representing

AirFrance)

3.

Chief Executive Ocer



4. 

President and Chief

Executive Ocer



5. 

President and Chief

Executive Ocer



6. 

Chair



7. 

Chairman





8. 

Chief Executive Ocer



9. 

Chief Executive Ocer



10. 

President and Chief

Executive Ocer



11. Zhu Tao

President



12. 

Chief Executive Ocer

(representing Iberia)

13.

Chief Executive Ocer



14. 

Representative Director,

President



15. 

President and Chief

Executive Ocer



16. 

President and Chief

Executive Ocer



17. 

Chairman and Chief

Executive Ocer



18. 

Chief Executive Ocer



19. 

Chairman and Chief

Executive Ocer



20. 

Group Chief Executive

Ocer



21. 

Chairman and

DirectorGeneral



22. 

Board Chair

Chairperson of the

Boardof Directors



23. 

Group Chief Executive



24. 

Chairman and Chief

Executive Ocer



25. 

Chief Executive Ocer



26. 

Director General





27. 

Chief Executive Ocer



28. 

Chairman of the Board

ofDirectors and

Executive Committee



29. 

Chief Executive Ocer



30. 



President and Chief

Executive Ocer





(To 20 June 2022)



Chairman, 





President and Chief

Executive Ocer, 





and Managing Director,



(To 6 September 2022)

, Chief

Executive Ocer, 

(To 7 November 2022)



Chairman, 



(To 1 January 2023)

,

Chief Executive Ocer,



(To 14 April 2023)



, Chief Executive

Ocer, T



are proud to have Mrs. Güliz Öztürk,

who has devoted herself to this

industry for such a long time, as our

CEO. She serves as a fantastic role

model and an advocate for gender

equality and creates valuable

opportunities for other women.

Numerous initiatives and programs

are being implemented to address

the gender gap and promote

diversity and inclusivity in the labor

market. Sustained commitment

and ongoing actions are essential

to creating a more balanced and

equitable representation. IATA’s

25by2025 pledge, aiming for a 25%

increase in female representation

in senior managerial roles by 2025,

is a signicant target in addressing

gender imbalance, but this is just

the starting point. The ultimate

goal should be achieving equal

representation of women, so the

aim is to reach 50% in the future.

The industry must commit to

continuing its eorts and to provide

opportunities for leadership

development and career growth.









From lobbying eorts to training

programs, I believe IATA oers

value to all airlines. It addresses

the needs of, and challenges

faced by, low-cost airlines,

including advocating for policies

that promote a competitive and

sustainable operating environment.

IATA also tackles aviation’s

vital priorities in sustainability,

diversity, regulation, and

managing operational challenges

and infrastructure costs. I

would certainly encourage and

welcomemore LCCs joining.







ECONOMICS

Aviation faces a

challenging economic

environment

IATA Annual Review 2023

Economics

Aviation faces a challenging

economic environment

Resilience and strong recovery

In 2022, COVID-related travel restrictions lifted further

though aviation and the global economy continued

to face signicant challenges. Renewed COVID-19

outbreaks in certain economies, particularly China, led

to waves of lockdowns. Russia’s invasion of Ukraine

disrupted food and energy supplies, driving consumer

prices higher and exacerbating inationary pressures

that had built up during the pandemic. To combat

persistent high ination, central banks rapidly raised

interest rates, resulting in tightened global nancial

markets and increased pressure on high debt levels.

Despite these challenges, headline ination declined,

reecting some of the desired eects of interest rate

hikes. The unemployment rate in OECD countries also

remained low at 4.9%, indicating a robust job market

and strong purchasing power.

As 2023 progressed, travel restrictions waned and

China’s economy showed signs of recovery following

the end of zero-COVID measures, along with the

removal of most testing requirements for international

travelers. The developments in China are expected to

increase air trac demand globally and ease supply

chain disruptions. The global GDP growth rate for

2022is estimated at 3.4%, and a forecasted rate

of 2.8% for 2023 suggests a continued expansion,

albeitat a more moderate pace.

01 Source: IATA S&E Economics, using data from OECD

Industry cost pressures remain high

Following Russia’s invasion of Ukraine in February

2022,the crude oil price exceeded $120 per barrel for

the rst time in a decade. Air travel demand continued

to recover over the same period, which increased

demand for jet fuel while renery capacity remained

limited. This increased the crack spread between the

price of crude oil and the price of jet fuel to historic

highs of more than $60 per barrel during the summer

of 2022. Although oil prices have come down from their

peak, they remain at elevated levels. Airlines continue

to adjust their operational strategies and invest in

newer aircraft to improve fuel eciency and reduce

their carbon footprint. Rising labor and input costs,

however, along with higher interest rates, continue

to pose signicant challenges to the industry’s

protability. The moderate performance of the global

economy might ease demand for oil, but the balance

ofrisks is skewed to the downside for the industry.

02 Source: IATA S&E Economics, using data from S&P Global, Macrobond

-5

Jan-18

Jan-20

Jan-22

May-22

Sep-22

May-18

May-20

Jan-23

Sep-18

Sep-20

Jan-19

Jan-21

May-19

May-21

Sep-19

Sep-21

200

180

160

140

120

100

Crude Oil

Jet Fuel

Dec-22

12.9

Mar-23

7.7

Jan-19

Feb-21

Jun-19

Dec-21

Jul-21

Mar-23

Nov-19

May-22

Apr-20

Oct-22

Sep-20

Economics

IATA Annual Review 2023

01 Headline CPI and PPI (% change year-

on-year), OECD Countries

02 Crude oil (Brent) and jet fuel price

(USD/Bbl)

Headline Consumer Price Index (CPI)

Producer Price Index (PPI)

Air passenger markets

Global passenger trac recovery accelerates

Numerous countries continued to ease travel

restrictions in 2022, resulting in a reduction in policy

stringency at a global scale. On the back of this

development, the number of air passengers continued

to grow worldwide and approached pre-pandemic

levels, demonstrating the eagerness of travelers to y

again. Nevertheless, the recovery of international air

travel was still constrained by uncoordinated policies

and lingering restrictions in dierent markets.

Industry-wide revenue passenger kilometers (RPKs)

increased signicantly from 41.7% of 2019 RPKs in

2021 to 68.5% in 2022. The growth in international

RPKs powered most of the recovery momentum in

2022 as domestic trac worldwide experienced an

earlier recovery and slower growth since the second

half of 2021. In the rst quarter of 2023, the recovery

accelerated as China reopened its economy. Industry

total RPKs reached 88.0% of their 2019 levels in March

2023, a signicant improvement largely attributable to

the developments on the domestic side.

03 Source: IATA S&E Economics, using data from IATA Monthly Statistics, Oxford

Coronavirus Government Response Tracker (OxCGRT)

Notes: The stringency index is a composite measure of nine response indicators including

workplace and school closures, as well as travel bans (Jan 2020 stringency = 100).

International trac recovery caught up

withdomestic in 2022

During the pandemic, travel restrictions had the

greatest impact on international air passenger

numbers. International trac consequently was slower

to recover than domestic travel, which oered more

certainty and less constraints to travelers.

The gradual reopening of travel markets worldwide

was supported by the rollout of vaccines and evidence

revealing the ineectiveness of travel restrictions in

controlling the COVID-19 virus. In 2022, the easing

of travel policies signicantly improved international

passenger ows, particularly in Asia-Pacic.

Although international passenger trac faced

setbacks in early 2022 due to travel restrictions, the

willingness of passengers to travel was demonstrated

globally by the rapid increase in international revenue

passenger kilometers (RPKs) whenever and wherever

travel restrictions were lifted. As 2022 progressed,

international trac started to catch up with domestic

trac, increasing from 24.6% of pre-pandemic levels

in2021 to 62.1% in 2022.

The recovery in international trac continued

in therst quarter of 2023 and in March 2023

reached81.6% of March 2019 levels.

04 Source: IATA S&E Economics, using data from IATA Monthly Statistics

120%

100%

80%

60%

40%

20%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

700

600

500

400

300

200

100

% Share of 2019 Industry RPKs Stringency Index (Jan 2020 = 100)

Jan-20

Jan-21

Jan-22

Jan-23

Mar-20

Mar-21

Mar-22

Mar-23

May-20

May-21

May-22

Jul-20

Jul-21

Jul-22

Sep-20

Sep-21

Sep-22

Nov-20

Nov-21

Nov-22

Jan-20

May-20

Sep-20

Jan-21

May-21

Sep-21

Jan-22

May-22

Sep-22

Dec-22

Economics

IATA Annual Review 2023

03 Industry total revenue passenger-

kilometers (RPKs) as % share of 2019

levels, World Stringency Index, indexed

to January 2020

04 International and Domestic total

revenue passenger-kilometers (RPKs),

% share of 2019

Industry RPKs

World average stringency index

Industry RPKs

International RPKs

Domestic RPKs

Uneven recovery across regions

Reecting the inconsistent levels of virus control and

outbreaks, regions faced various outcomes in trac

growth in 2022 and early 2023. Notably, in Asia-Pacic,

international trac lagged other regions and only made

substantial progress beginning in March 2022, when

concerns related to the Omicron variant subsided.

05 Source: IATA S&E Economics, using data from IATA Monthly Statistics

Routes connecting various regions to the Americas

have led the recovery in international RPKs. Due to the

slow reopening of China and Japan, trac on routes

between Asia-Pacic and the rest of the world has

recovered slower than trac on other major routes.

China’s international RPKs recovered at a signicantly

slower rate compared with the trac rebound in

other Asia-Pacic countries. The reopening of China

is expected to accelerate the rebound in the region

as some markets from and to China were among the

largest international markets in 2019.

The ongoing war in Ukraine continues to impact

international operations due to airspace closures

andtrac diversions. The closure of the Russian

airspace has aected airlines from almost 40 countries,

with the most heavily hit markets being Europe-Asia

and Asia-North America. As the airspace closures

required ights to be rerouted or cancelled, they had

adirect impact on RPKs.

06 Source: IATA S&E Economics, using data from IATA Monthly Statistics

Highlighting the dierent trends that the regions

haveexperienced, domestic trac rebounded

quicklyin most airline regions but was inconsistent

inthe rate of growth. In 2022, airlines from Europe,

LatinAmerica, and the Middle East surpassed 2019

trac levels. By the end of 2022, industry-wide

domestic RPKs were within 20% of full recovery.

Following the swift domestic trac recovery in

China, domestic RPKs performed by Asia-Pacic

airlines increased substantially and caught up

with carriers registered in other regions. This led

to a surgein the recovery of total domestic RPKs,

jumpingfrom 80.5% of 2019 levels in December

2022to98.9% in March 2023.

07 Source: IATA S&E Economics, using data from IATA Monthly Statistics

140%

120%

100%

80%

60%

40%

20%

Jan-20

Nov-20

Nov-21

Mar-20

Mar-21

Jan-21

Jan-22

Mar-22

May-22

Jul-22

Sep-22

Nov-22

Jan-23

Mar-23

May-20

May-21

Jul-20

Jul-21

Sep-20

Sep-21

120%

100%

80%

60%

40%

20%

Jan-20

Jan-21

Jan-22

Mar-20

Mar-21

Mar-22

Mar-23

May-20

May-21

May-22

Jul-20

Jul-21

Jul-22

Sep-20

Sep-21

Sep-22

Nov-20

Nov-21

Nov-22

Jan-23

140%

120%

100%

80%

60%

40%

20%

Economics

IATA Annual Review 2023

05 International revenue passenger-

kilometers (RPKs) by airline region of

registration, % share of 2019 level

06 International revenue passenger-

kilometers (RPKs) by route area, % share

of 2019 level

07 Domestic revenue passenger-

kilometers (RPKs) by airline region

of registration, % share of 2019

Africa

Asia Pacic

Europe

Latin America & Caribbean

Middle East

North America

Industry

Africa

Asia Pacic

Europe

Latin America & Caribbean

Middle East

North America

Industry

Africa - Asia

Central America - South America

Europe - Central America

Europe - Asia

Europe - North America

Middle East - Asia

Middle East - North America

North America - Central America

North - South America

Within Europe

Within Asia

Air cargo markets

Air cargo demand softened

After an exceptional performance in 2021, air cargo

demand declined 8.0% in 2022 due to several

challenges throughout the year. Ination reached

historical highs, curtailing the spending capacity

of households and reducing trade, and the ongoing

war in Ukraine further disrupted trade ows. The

unusual strength of the US dollar also made certain

commodities more expensive in local currency terms.

Compared to the pre-pandemic period, industry

cargotonne kilometers (CTKs) in 2022 tracked

close to their 2019 levels, contracting 1.6%. North

America and Africa were the only two regions with

CTKs above 2019 levels throughout the year. Airlines

in Latin America recovered following the lengthy

restructuringprocesses in 2021 and their cargo

tracis close to pre-pandemic levels.

08 Source: IATA S&E Economics, using data from IATA Monthly Statistics

Global trade growth outperformed

air cargo demand

Global goods trade continued to rise from January

to October 2022, albeit at a slower pace than in

2021. In contrast, air cargo CTKs experienced twelve

consecutive months of contractions beginning

in March 2022, suggesting that the growth of

global trade benetted maritime transportation

more than air transportation. As the demand for

goods softened compared with the previous year,

businessesexperienced less inventory pressure

to fulll orders, reducing their need to use air

transportation to replenish stocks quickly.

09 Source: IATA S&E Economics, using data from IATA Monthly Statistics and

Netherlands CPB

Declining cargo load factors put

downwardpressure on cargo yields

Due to increased capacity and lower demand, cargo

load factors dropped back to their pre-COVID range.

The rise in air cargo capacity has largely been driven

by the restoration of belly capacity from passenger

aircraft since May 2021, while the capacity of dedicated

freighters has been declining since December 2021.

Although air cargo yields reached an all-time high

in December 2021, they started to fall for most of

2022. Yields are still higher than their pre-COVID

levels.But given that load factors are back to their

normal range, the downward trend in yields may

continue well into 2023.

10 Source: IATA S&E Economics, using data from IATA CargoIS

50%

40%

30%

20%

10%

-10 %

-20%

-30%

-40%

-50%

60%

50%

40%

30%

20%

10%

-10 %

-20%

-30%

145%

130

115

100

85%

Jan-20

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23

Jan-19 Jan-20 Jan-21 Jan-22 Jan-23Jul-19 Jul-20 Jul-21 Jul-22

Nov-20

Nov-17

Nov-18

Nov-19

Nov-20

Nov-21

Nov-22

Nov-21

Mar-20

Mar-17

Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

Mar-23

Mar-21

Jan-21

Jan-22

Mar-22

May-22

Jul-22

Sep-22

Nov-22

Jan-23

Mar-23

May-20

May-17

May-18

May-19

May-20

May-21

May-22

May-21

Jul-20

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22

Jul-21

Sep-20

Sep-17

Sep-18

Sep-19

Sep-20

Sep-21

Sep-22

Sep-21

250

230

210

190

170

150

130

110

Industry and regional CTKs, % vs 2019

Mar-23

Economics

IATA Annual Review 2023

08 Air cargo monthly demand compared

with the pre-Covid levels

09 Growth in air cargo demand (CTKs)

andglobal trade, % change year-on-year

10 Global air cargo yields and load factors

Relative performance of air cargo growth

Global goods trade

Industry-wide CTKs

Seasonally adjusted cargo load factor,

indexed (Jan 2019 = 100)

Air cargo yields (USD per kg, incl.

surcharges), indexed (Jan 2019 = 100)

Industry

Latin America

Africa

Middle East

Asia Pacic

North America

Europe

Preighters were phased out in 2022

Despite the strong comeback of passenger aircraft

belly capacity, the share of international CTKs

transported by passenger aircraft remains lower than

pre-pandemic levels. Cargo volumes transported

by passenger aircraft and by dedicated freighters

were previously balanced. During the crisis period,

passenger aircraft were used as cargo-only carriers,

called “preighters,” to address the capacity shortage.

They transported 16% of total international CTKs in

2021. As air passenger demand recovered in 2022,

however, preighters were phased out, and passenger

aircraft only carried about 30% of total international

CTKs. By December 2022, preighters accounted for

just1% of total international CTKs.

11 Source: IATA S&E Economics, using data from IATA Monthly Statistics

Export orders contracted

The purchasing managers’ index (PMI) for export

ordersis historically a leading indicator of air cargo

demand. The key 50-mark indicates there are no

changes in export orders, compared to the previous

month. The PMI was in below-50 territory for much

of 2022—February being the only exception—which

signals a deterioration in new export orders and thus

in air cargo demand. However, the recent upward

trends observed in January and February 2023 imply a

possible improvement in air cargo demand for 2023.

12 Source: IATA S&E Economics, using data from IATA Monthly Statistics and Markit

International CTKs (millions) by type

Jan-19

Nov-19

Nov-21

Nov-20

Mar-19

Mar-21

Mar-20

Jan-21

Jan-20

Jan-22

Mar-22

May-22

Jul-22

Sep-22

Nov-22

Jan-23

Mar-23

May-19

May-21

May-20

Jul-19

Jul-21

Jul-20

Sep-19

Sep-21

Sep-20

60%

50%

40%

30%

20%

10%

-10 %

-20%

-30%

-40%

-50%

-60%

2008

2014

2013

2009

2015

2023

2010

2016

2011

2017

2012

2018

2019

2020

2021

2022

Growth in industry

CTKs (LHS)

Manufacturing New export orders PMI (50 = no change)

Global PMI new

export orders

component (RHS)

Economics

IATA Annual Review 2023

11 International air cargo demand

transported by dedicated freighters,

passenger belly, and preighters

12 Global manufacturing new export

orders PMI and air cargo growth

(% year-on-year change in CTKs)

Dedicated freighters

Passenger Belly

Preighters

65%

62%

24%

34%

48%

64%

52%

19%

14%

17%

Airline nancial performance

Mixed performance for passenger

andcargoin 2022

The nancial standing of airlines is swiftly rebounding

from the substantial decits experienced in 2020.

The performance of passenger and cargo markets

were, however, mixed in 2022. Passenger revenue

increased an estimated 80%, driven by higher

yields and the recovery of international passenger

volumes. Meanwhile, cargo revenue is expected

to have decreased due to a drop in cargo volumes

and despitean increase in cargo yields. For both

passengerand air cargo services, the dierence

between the attained load factor and the necessary

load factor for breaking even has been diminishing,

anda return to protability is on the horizon.

13 Source: IATA Financial Forecast (December 2022)

Highlights of industry revenue and costs

Airlines experienced a signicant increase in their

costs in 2022. A primary contributing factor is

the war in Ukraine, which has led to a sharp rise

in globalcommodity prices. The appreciation of

the USdollar and higher interest rates have also

contributed to the increase in airline costs, while the

rise in labor and other input costs in some markets

poses additional challenges for the industry’s

protability. Although oil prices and the crack

spreadare expected to ease from their 2022 level,

theywill likely remain elevated in 2023. Therefore,

costvigilance, including strategies to continue

improving fuel eciency, will be critical for the industry.

14 Source: IATA S&E Economics, using data from S&P Global, Renitiv Eikon, IEA

Total revenue for passenger and cargo carriers

reached60% of the pre-pandemic level by the end

of2021, and 87% by the end of 2022. With total

revenuearound $780 billion, this signies a slim

marginof 0.6% or just one dollar per passenger.

15 Source: IATA Financial Forecast (December 2022)

NOTE: Discussion and charts based on December 2022 forecast

160

140

120

100

US$ per barrel

USD billion

Litres fuel used per 100 RTK

2000

2005

2011

2001

2007

2006

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2002

2008

2003

2009

2004

2010

900

800

700

600

500

400

300

200

100

2015

2021

2018

2022

2023

2016

2019

2017

2020

% ATKs

Fuel use/100 RTK

Jet fuel price

Breakeven load factor

Achieved load factor

Passenger revenues

Cargo revenues

2021:

60% of 2019

2023:

93% of

2019

2022:

87% of

2019

Economics

IATA Annual Review 2023

13 Breakeven and achieved cargo

andpassenger load factor

15 Global airlines revenue, by type

(USD billion)

14 Fuel eciency and the price of jet fuel

Industry snapshot 2022

The nancial standing of airlines improved across

all regions in 2022, with North American carriers

taking the lead. Only North American airlines are

estimated to have achieved a net prot in 2022,

however, though airlines from Europe and Middle

Eastwere not far behind.

16 Source: IATA Financial Forecast (December 2022)

After a signicant net loss of nearly $140 billion in

2020, the industry’s loss reduced to approximately

$40billion in 2021. This recovery continued in

2022,with net losses diminishing further to an

estimated $7 billion.

17 Source: IATA Financial Forecast (December 2022)

The airline industry experienced a substantial

declinein return on invested capital (ROIC) at the

beginning of the pandemic. Over the last two years,

however, the ROIC has been steadily recovering.

Coinciding with the resurgence in airlines’ ROIC

post-pandemic, aircraft deliveries have been

increasingrapidly, with 1,270 aircraft delivered by

the end of 2022. This trend highlights the enduring

condence and resilience withinthe airline industry.

18 Source: IATA Financial Forecast (December 2022)

% revenues

-5%

-10 %

-15%

-20%

-25%

-30%

-35%

North America

European

Asia-Pacic

Middle East

Latin America

Africa

Number of aircraft delivered

Net prot, USD billion

ROIC as % invested capital

EBIT margin, %

1900

1800

1700

1600

1500

1400

1300

1200

110 0

1000

900

800

700

600

500

400

-20

-40

-60

-80

-10 0

-120

-14 0

-16 0

-5

-10

-15

-20

-25

15%

10%

-5%

-10 %

-15%

-20%

-25%

-30%

-35%

-40%

Aircraft deliveries

Airlines ROIC

EBIT margin

Net post-tax prot

2021

2022

2000

2005

2011

2001

2007

2006

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2002

2008

2003

2009

2004

2010

2000

2005

2011

2001

2007

2006

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2002

2008

2003

2009

2004

2010

Economics

IATA Annual Review 2023

16 Airline region operating margin,

% revenue

17 Airline industry net prots and

EBIT margin

18 Aircraft deliveries and airline

industry ROIC

IATA studies

One size does not t all: A study

of airline business models in Europe

Travelers in Europe benet from a highly competitive

air travel market where airlines operate with unique

business models to oer a broad range of travel

options. An IATA 2022 report provides an in-depth

analysis of network carriers and low-cost carriers

(LCCs) in the European airline market, nding that the

business models serve dierent market segments.

Although network carriers are the primary providers

ofair transport connectivity both within Europe

and in the intercontinental markets, LCCs dominate

direct route demand in the intra-European market.

The reportalso found that the COVID-19 pandemic

had varying impacts on both types of carriers, due

to their dierent market focuses and exposure

to travel restrictions. The report concludes that

network carriersand LCCs complement each other,

and policiesshould not favor one business model

over theother. Instead, regulations should focus on

improving all transportation options to be faster,

better, cheaper, and sustainable—a general lesson

thatapplies globally.

19 Source: One Size does not t all: A study of airline business models in Europe,

IATA, 2022.

Understanding the Pandemic’s Impact

on the Aviation Value Chain

Since 2005, IATA has worked with McKinsey &

Companyto assess value creation across the

aviation value chain. The latest report shows that the

COVID-19 pandemic has caused signicant value

loss for all sectors, with the global decline in airline

trac resultingin a loss of $390 billion in 2020 and

2021. Sectors with a higher share of xed costs, such

as airports, suered signicant losses compared

with sectors with a more variable cost base, such as

groundhandlers. However, air cargo carriers and freight

forwarders experienced yield increases and value

creation due to supply-demand imbalances. Although

the aviation industry’s return on invested capital (ROIC)

rebounded in 2021, the recovery was uneven across

sectors, with airportsrebounding the least. As the

industry recovers, there is an opportunity to increase

the value of all participants in the value chain through

performance improvements and collaboration.

20 Source: McKinsey value chain modeling for IATA

-6.9% ~-14% -9.3% -39.5% -12.6% -3.1% -2.7% -20.6%

5.8% -22.4%

(4.4)

(4.9) - (4.6)

(1.5)

(34.3)

(1.7)

(0.8)

Economic prot as share of revenue

, %

(0.8)

(104 .1)

(6.8)

(0.8)

(146)

Manufacturers

Ground

Lessors

Airlines

MRO

ANSP

Airports

GDS/

Travel tech

Freight

Forwarders

Catering

TOTAL

Segment A

Network carrier-served only

Segment C

Network carriers-LCC overlap

Segment B

LLC-served only

Segment A

Network carrier-served only

Segment C

Network carriers-LCC overlap

Segment B

LLC-served only

13% 72% 15%

79% 6% 15%

4 A true-origin-to-true-destination (O-D) refers to a unique air travel itinerary,

which consists of origin airport – connecting airpot #1 – connecting airport

#2 – connecting airport #3 – connecting airport #4 – the destination airport.

For example, a ight departing from London (LHR), and arriving in Zürich (ZRH)

via Paris (CDG), is on a dierent O-D itinerary compare to a trip departing from

London (LHR) arriving in Zürich (ZRH) via Geneva (GVA).

1. Based on invested capital excluding goodwill, extrapolated to total industry.

2. Computed as cumulative economic prot divided by cumulative sector revenues

over the period

Economics

IATA Annual Review 2023

19 Intra-European Airline Network by

Origin-Destination ight itinerary

20 Economic prot/loss by subsector,

2021, USD Billion

Intra-Europe O-D passenger demand share

Intra-Europe No. O-D itineraries share

Regulations

IATA Annual Review 2023

REGULATIONS

Harmonized

regulations

can facilitate

economic

growth

viation is a global network

that needs globally

harmonized regulations

to operate with maximum

safety and eciency. Air transport

is also an economic multiplier

and eective, enabling regulation

and taxation that reects best

practices can help aviation

maximize its economic and social

contributions. Governments around

the world exhibit varying degrees of

understanding of these principles.

IATA and its members strive to be a

positive partner with governments

to work for smarter regulation and

taxation regimes.

Slot reform should

focus onpassenger

andeconomicbenets

Slot regulation exists to help

manage insucient airport capacity.

Where demand exceeds capacity,

the World Airport Slot Guidelines

(WASG) ensure that capacity is

managed fairly, transparently, and

eciently. Following the industry’s

Regulations

IATA Annual Review 2023

recovery from the impact of the

pandemic, slot regulation and policy

eorts have moved away from

emergency relief toward a strategic

restoration of global networks and

air connectivity, thereby increasing

choice for travelers. In 2022 and into

2023, the Worldwide Airport Slot

Board has focused on slot process

renement to facilitate recovery

while identifying areas of the WASG

that can be enhanced. The aim is

to manage scarce airport capacity

in a fair and transparent manner,

balancing the needs of competition

and access with consistent and

reliable schedules for airlines and

their passengers.

● Engagement with Brazil’s civil

aviation authority (ANAC) to

review its slot regulation resulted

in ANAC’s recognition of the

WASG. ANAC will in particular

apply the WASG in managing

congestion issues at Sao Paulo’s

Congonhas Airport.

● COVID: flexibility has remained

a key issue for the slot

process as airlines navigated

different recovery rates in

various countries and regions.

The available airport and air

traffic control (ATC) capacity

challenged the ability of airlines

to recover. Several airports

experienced operational

disruption in summer 2022,

requiring schedule reductions

to match the capacity available.

Slot flexibility was therefore vital

to facilitate flight consolidation

rather thancancellation. Airlines

also relied on slot coordinators

to grant alleviation from slot use

rules on an ad hoc basis referred

to as Justified Non-Use of Slots

(JNUS) when cancellations were

required due to matters outside

of airlines’ control.

● The EU Commission resumed

its slot regulation review in

late 2022 and IATA continues

to highlight to DG Move how

effective slot regulation has

beenin the EU the last decade.

It has facilitated competition,

choice and access against a

backdrop of hugely congested

infrastructure on the ground and

in the air. There is a view in the

EUthat tightening slot rules will

bring benefits, but the inflexibility

that will result from stricter

regulations has been proven to

cause harm. In this case, forcing

airlines to operate flights would

be contrary to the aims of the

EU’sGreen Deal. The evidence

is that demand-led scheduling is

more sustainable. IATA’s position

is that slot regulation delivers

consumer benefits, and there

is no evidence of fundamental

structural issues, or of misuse

ofslots. Improvements should

focus on accurate capacity

declaration at slot-coordinated

airports, to deliver the European

Commission’s priorities.

Legal action to preserve

the Balanced Approach

atSchiphol Airport

To protect the Balanced Approach

to noise management, IATA joined

with a number of airlines serving

Amsterdam’s Schiphol Airport

in a legal challenge to the Dutch

government’s ‘experimental

regulation’ to cut ight movements

at the airport to 460,000 per

year from November 2023. The

industry’s legal challenge was

successful: the judge ruled that the

State had not followed the correct

procedure in introducing the

proposal. According to European

rules, the State can only reduce the

number of aircraft movements at an

airport after going through a careful

process. This process includes,

among other things, showing

that other measures to limit noise

pollution are insucient.

The issue was of the utmost

importance to airlines:

● They needed clarity on the

application of the Balanced

Approach in international and

European law.

● They needed certainty for the

2023/24 Northern Hemisphere

Winter Season schedules.

● They needed to continue

operating slots under grandfather

rights as opposed to having

them taken away. As there is no

precedent or methodology in

place for taking grandfather slots

away from an airline, it would be

difficult to ensure fairness and

prevent loss of connectivity. It

also would have meant that new

airlines that were hoping to get

slots at the airport would be unable

to get them, negatively impacting

consumer choice and competition.

In April, the Dutch government

signaled its intention to appeal

thedecision. Worse, it’s pursuing

aproposal to lower Schiphol’s

annual capacity to 440,000

ightsfrom 2024.

Regulations

IATA Annual Review 2023

Deterrence is the key

topreventing unruly

passenger incidents

Unruly passenger incidents are a

shared concern for regulators and

the industry. During the pandemic,

there was an appreciable spike

in reported incidents relating to

non-compliance with crew orders,

mainly face mask requirements.

The overall incidence of unruly

passenger events increased in

2021 to 0.4 incidents per 1,000

ights, up from 0.32 the year

before, prompting action by

some governments. The United

States, for example, introduced an

awareness campaign backed by a

zero-tolerance approach. Others,

like France, introduced civil and

administrative penalties—such as

spot nes—to ensure a wider range

of enforcement mechanisms to

deal with dierent types of unruly

passenger events. Having access

to a wider range of penalties other

than full prosecution enhances the

deterrent to unruly incidents.

The 41

ICAO Assembly listened to

concerns raised by the industry and

urged governments to introduce a

three-step approach.

1 Ensure the traveling public are

aware of the types of prohibited

conduct and the legal and other

consequences for misbehavior

in line with ICAO Standards

and Recommended Practices

(SARPs).

2 Enhance the deterrent by

● ratifying the Montreal Protocol

2014 (MP14) so that law

enforcement can deal with

incidents onboard flights

that land in their territory,

irrespective of where the

aircraft is registered, thus

removing a key impediment

toprosecution.

● reviewing their enforcement

mechanisms and considering

civil and administrative

penalties to ensure all offenses

and acts are subject to

enforcement action without

only relying on criminal

prosecution.

3 Support industry initiatives aimed

at improving the prevention and

management of incidents.

Some 44 countries approximating

to one third of global passenger

trac have now signed up to MP14,

with Angola, Armenia, Kenya,

Luxembourg, Niger, Oman, Peru,

Romania, Rwanda, Sierra Leone and

the United Arab Emirates becoming

signatories in 2022 or the rst

quarter of 2023.

Countries are looking at enhancing

prevention and management.

IATA is supporting the Irish and

Norwegian CAAs with new multi-

stakeholder campaigns that bring

together police, airports, airlines,

ground handlers, restaurant,

bar and duty-free operators to

agree specic actions to avoid

incidents. These include enhancing

responsible service of alcohol in

airport bars and restaurants, and

communications to passengers on

“The lessons of

light-touch consumer

protection regulation

are being forgotten.”

the prohibition of drinking duty-free

alcohol onboard.

The lessons of light-touch

consumer protection

regulation are being forgotten

The 2022–23 period marked 45

years since US domestic airline

deregulation and 30 years of the

Single Aviation Market in Europe. It

is therefore disappointing to note

that the benets of promoting

customer choice—which helped to

deliver a ve-fold fall in yields (an

indicator for average fares) since

1980—risks being forgotten by a

new generation of regulators.

The trend toward the populist

introduction or tightening of

consumer protection rules continued

around the world, particularly in

the Americas and Europe. IATA has

engaged extensively with regulators

in, among others, Brussels, London,

Washington DC, and Ottawa. The

industry advocates for proportionate

regulation that balances the

legitimate interests of consumers

with the ability of airlines to compete,

innovate, and oer the connectivity

that generates such huge economic

and social benets.

Additionally, the strong recovery in

passenger demand in 2022 created

many operational challenges as the

industry had to restart from a low

base. Some of the issues highlighted

the imbalance in existing consumer

protection regulations where the

problems are often completely

outside of airlines’ control yet the

burden for nancial compensation

falls on carriers alone.

An example of this is the Canadian

Transportation Agency (CTA)

proposal in April 2023 to make

airlines more accountable for

service failures and disruptions

regardless of who is at fault. Airlines

argue these accountabilities should

be shared across the commercial

air system and include airlines,

airports, and Nav Canada—the air

navigation service provider. This

issue is a priority area for IATA and

airlines, and IATA will accelerate

advocacy for a model of shared

accountability.

Regulations

IATA Annual Review 2023

Practical guidance to enhance

the travel experience for

passengers with disabilities

Airlines are committed to enabling

all passengers to y in safety and

dignity. In the case of passengers

with disabilities, this creates several

challenges that the industry is

looking to overcome in partnership

with the disabilities community. It

is estimated that more than one

billion people, around 15% of the

world’s population, have a disability

of some kind. In terms of numbers

of travelers, this percentage will

likely increase as the population

ages in many of the largest

aviationmarkets.

In 2022, the primary focus was on

developing guidance to improve

the transportation of mobility aids.

Key elements of the guidance,

published in February 2023, include:

● Better processes for booking and

information exchange, including

the use of Special Service

Request (SSR) and Passenger

Name Record (PNR) codes.

● A recommendation to create an

electronic mobility aid tag, fixed

to the mobility aid.

● Advice to airlines on developing

a communications toolkit for

engaging with passengers with

disabilities.

● Best practices for the collection,

loading, and return of mobility

aids.

● A recommendation for dedicated

specialized ramp personnel to

handle mobility aids.

● Best practices for how to properly

resolve instances where mobility

aids are damaged.

In an example of practical

assistance rendered to members,

IATA and the wider travel chain,

working with regulators, enhanced

the websites of the three main

Italian carriers (ITA, Air Dolomiti

and NEOS) to make them more

accessible and provide a more

satisfying booking experience.

Thewebsites also give better

guidance to passengers with

disabilities so they know what

information to provide in advance

of travel to ensure they receive

theneeded support.

Another notable development

in 2022 was the passing of a

Resolution at the 41

session of the

ICAO Assembly—at the request of

the industry—committing ICAO to

develop guidance on the design

and implementation of a policy

aimed at making air transport more

accessible for passengers with

disabilities and reduced mobility.

IATA will support a dedicated ICAO

work program that will in turn drive a

more consistent policy approach to

accessibility around the world.

TAXATION

The taxation of aviation must be

in line with principles enshrined

in the Chicago Convention and

ICAO best practices. Moreover, the

industry believes that the taxation

of airlines and their passengers

should be considered carefully by

governments to ensure that the

risks of reduced connectivity to the

economy do not outweigh the short-

term nancial gains of any tax.

Some governments are looking to

introduce so-called green taxes,

often passenger taxes, that do

nothing for the environment. If

a government is looking to raise

money from aviation under an

environmental pretext, then it must

reinvest the revenues in projects

to directly cut emissions from

aviation. It could reduce the cost

dierential between sustainable

aviation fuel and fossil jet fuel,

for example. In 2022, IATA and its

members engaged with numerous

governments on a wide variety

oftax issues.

Base erosion and protsharing

There is a G20/OECD (Organisation

for Economic Co-operation and

Development) project to create a

minimum corporate income tax to

be applied globally. This is primarily

targeted at technology industries

and other transnational businesses,

not at airlines, but nevertheless

brings an array of challenges,

including data collection and other

nancial and administrative costs.

IATA is working with the OECD to

ensure that this project arrives

at a fair outcome for airlines.

Article 8 of the UN Tax

ModelConvention

IATA and its members will continue

to make the case for tax policies,

which ensure aviation is paying its

fair share, while enabling greater

connectivity that strengthens the

economy and, in turn, government

revenues. One new issue that

is particularly concerning is the

proposed review of Article 8 of the

UN Tax Model Convention. In double

tax treaties and bilateral air service

agreements, Article 8 is the article

expressly dealing with prots from

the operation of aircraft and prots

from the operation of ships. The

proposed revision would expose

airlines to further tax obligations,

including the collection, calculation,

and reporting of nancial data

for each jurisdiction where

they operate or have economic

activities. The industry opposes

this revision on several grounds,

including ICAO taxation policies,

and will advocate strongly against

itin 2023.

Regulations

IATA Annual Review 2023

INFRASTRUCTURE

USERCOSTS

Airports and air service navigation

providers (ANSPs) play an essential

role in the aviation industry. Due to

the nature of their business, they are

natural monopolies. According to an

opinion survey conducted by IATA,

most travelers agree that airports

are essential to the economy, but

at the same time consider these

as monopolies. This is likely based

on the experience of nearly 90% of

travelers who said that they mostly

used their local airport as other

viable options do not exist.

Therefore, eective economic

regulations must be put into

place to ensure that airports and

ANSPs do not abuse their market

dominance. As critical pieces of

national infrastructure, they have an

important and well-recognized role

in supporting the competitiveness

of local and national economies.

At its best, economic regulation is

a proxy for competition to ensure

continuous eorts at delivering

cost-eciency. This is not an

uncommon approach for public

utilities. This again is backed up

by the opinion survey in which

most respondents stated that

airports should be subject to price

regulation, similar to public utilities.

There are globally agreed ICAO

principles for agreeing charging

levels. Airports and ANSPs

can recover their costs on the

principles set forth in Article 15 of

the Chicago Convention and ICAO’s

four key charging principles of non-

discrimination, cost relatedness,

transparency, and consultation

with users. In reality, these

principles are not always followed

by infrastructure providers or fully

enforced by regulators.

There are some clear examples

where the demands of airports

and ANSPs for charges increases

deserve the scrutiny of regulators.

These include:

● Amsterdam Schiphol Airport:

The airport intends to increase

its charges 37% over three years

beginning in 2022. Considering

the poor performance of

the airport in 2022, the 12%

increasescheduled for that year

deserves careful scrutiny.

● In South Africa, airports want a

38% charges increase, only to

be outdone by South African

ANSP demands for a 63% hike.

Both far outstrip inflation. And

there have been no recent capital

expenditure projects that would

justify such a hike.

● In Mexico, the main airport

groups increased their passenger

facilitation charges (PFC) on

average 58% over the last eight

years. The PFC sometimes

represents more than 60% of a

domestic ticket price, curbing the

ability for the Mexican citizens to

visit friends and family.

● In Europe, ANSPs added €1.9

billion to the 2022 cost base.

Despite this, delays were three

times more than expected, and

both capacity and environmental

targets were missed.

Lack of transparency remains an

issue with increases in charges

often decided without the required

user consultation process. In

some cases, the rst notication

of an increase is its ocial

“Lack of transparency

remains an issue with

increases in charges

often decided without

the required user

consultation process.”

Regulations

IATA Annual Review 2023

announcement. A case in point is

the decision by the Government

of Denmark to implement a new

air navigation service at the Nuuk

Flight Information Region (FIR)

to cover the Greenland airspace.

This political decision was

announced without consultation

and transparency, eventhough

theairspace is managed by

Canadaand Iceland.

Along similar lines, we are seeing

increasing non-compliance to ICAO

user charges setting principles and

policies by countries. One such

example is charging administrative

fees to process overight permits

for airlines, especially by authorities

in Africa. It is a trend across

the continent with Ethiopia, the

Central African Republic, Togo,

andTanzania implementing various

schemes for administrative fees

with little or no transparency on

thecosts involve.

Where ICAO principles are followed

by regulators, there are good

results. Dublin Airport, for example,

was advised by its regulator that

the proposed 73% increase in

the per passenger fee to €13.81

for the 2023–2026 period was

unacceptable. Instead, a 5%

increase from 2022 levels to €8.39

was approved. This clearly shows

how eective economic regulation

can be in preventing abuse.

The best-case scenario is when

the infrastructure provider

proactively opens meaningful

consultations prior to making

proposals to regulators. Airways

New Zealand, for example, released

a consultation in 2022 to establish

new rates for their air navigation

charges for the subsequent

three-year period. IATA worked

with Airways New Zealand to

establish a pricing framework

based on the trac forecast, which

led to an out-of-cycle price reset

and a smallreduction of 0.5%

in air navigation charges for the

remainder of this nancial year.

The Airways New Zealand

approach, however, is rare. The

unreasonable rate hikes that

continue to emanate from airports

and ANSPs demonstrate the value

of the ICAO charging principles

andrigorous economic regulation

that supports those principles.

Environment & Sustainability

IATA Annual Review 2023

ENVIRONMENT & SUSTAINABILITY

Making sustainability

an industry priority

ustainability is a critical

challenge for the

airline industry and its

stakeholders. The industry

continues to strengthen its eorts

to reduce its environmental

impact while calling for enabling

policy frameworks to develop

keyelements of aviation’s net

zerostrategy.

Adoption of a Long-Term

Aspirational Goal at ICAO

In October 2022, at the 41st ICAO,

member states adopted a Long-

Term Aspirational Goal (LTAG) to

achieve net zero CO₂ emissions by

2050. This important step forward

by states aligns with both the

objectives of the Paris Agreement

and the net zero CO₂ emissions by

2050 resolution agreed by airlines

at the 77th IATA Annual General

Meeting in October 2021.

In the run-up to the ICAO Assembly,

the industry strongly encouraged

governments to adopt the LTAG.

Supportive government policies

are critical to the success of

reaching the industry’s goal of net

zero CO₂ emissions by 2050 and,

with the adoption of the LTAG,

bothgovernments and industry are

focused on reaching net zero. As a

result, the industry expects much

stronger policy initiatives inkey

areas of decarbonization, such

as incentivizing the production

capacity of sustainable aviation

fuels (SAF), thereby reducing their

cost. The progress made in many

economies on the transition of

electricity production to green

sources, such as solar power

and wind, is an example of what

can beachieved with the right

government policies, particularly

inproduction incentives.

Environment & Sustainability

IATA Annual Review 2023

CORSIA baseline revised

to85% of 2019 level

The ICAO Carbon Osetting and

Reduction Scheme for International

Aviation (CORSIA) will stabilize

emissions in the short to medium

term as a step to reach the net

zero goal. Under CORSIA, airlines

are required to purchase eligible

emission units to oset increases

in CO₂ emissions above a baseline

that was originally dened as the

average of emissions in 2019

and 2020. In 2020, given the

extraordinary impact of the COVID

crisis on demand, ICAO’s Council

decided that 2019 emissions

from international aviation will

be CORSIA’s baseline for its pilot

phase (2021–2023).

CORSIA’s baseline for the 2024–

2035 period was subsequently

revised during the ICAO’s 41st

Assembly, taking into account

a commitment to CORSIA’s

reinforcement and an agreement

to stabilize emissions from

international aviation at 85% of the

2019 level. Although the industry

had hoped for a baseline of 100%

of 2019 emissions, it withdrew its

opposition in the interest of united

state support for CORSIA. Many

governments emphasized CORSIA’s

role as the only economic measure

applied to manage the carbon

footprint of international aviation. In

the industry’s view, the Assembly’s

agreement strengthens CORSIA.

Lowering the baseline to 85% of

2019 emissions will nevertheless

place a signicantly greater cost

burden on airlines. Consequently,

it is more vital than ever that

governments reinforce CORSIA

as the only economic measure to

manage the carbon footprint of

international aviation. States must

honor, support, and defend CORSIA

against any proliferation of economic

measures that will risk undermining

CORSIA and the collective eort to

decarbonize aviation.

SAF gained momentum but

more policy support needed

The industry expects SAF to play

the largest role in decarbonizing

aviation. IATA estimates that

around 65% of the mitigation

needed for net zero carbon

emissions in 2050 will come

from SAF. In 2022, global SAF

production reached at least 300

million liters—a 200% increase on

the 2021 production total of 100

million liters. This scenario, with the

right supporting policies, positions

the SAF industry on the verge

of an exponential capacity and

production ramp-up and drives it

toward a potential production

of 30 billion liters by 2030.

To April 2023, over 490,000

commercial ights have been

operated using SAF, and the growing

number of airlines signing otake

agreements with producers sends a

clear signal to the markets that SAF

is needed in larger quantities. Since

the beginning of 2022, 57 otake

agreements have been signed

between airlines and SAF producers.

With every single drop of SAF

produced bought by airlines,

there is a supply issue that

market forces alone will not solve.

Governments—that through the

LTAG share the same 2050 net zero

goal as the industry—must put in

place comprehensive production

incentives for SAF. Such incentives

successfully transitioned

economies to renewable sources of

electricity, and they are needed for

aviation to decarbonize.

In August 2022, the US Government

passed the Ination Reduction Act

(IRA), which will see the country

invest a record $369 billion in

clean, renewable energy. The SAF

Blenders Tax Credit, as part of the

IRA, oers a baseline tax credit of

$1.25/gallon of SAF produced with

an emission reduction factor of

50%. For every increment 1% of

emission reduction factor, an extra

$0.01 of tax credit is added—up

to a maximum of $1.75/gallon of

SAF produced. This incentive goes

directly to the producer/blender and

will result in a) reducing the cost of

production for SAF, and b) reducing

the opportunity cost of producing

SAF relative to a producer’s other

co-products, such as renewable

diesel. This whole-of-government

approach to incentivize the

production of SAF is expected to

result in the production of at least

11billion liters of SAF by 2030.

In March 2023, the European

Commission published its proposed

response to the IRA in the form of

the Net Zero Industry Act (NZIA),

which aims to scale-up clean

technology manufacturing in the

EU with a target to provide at least

40% of the EU’s annual deployment

“The industry

expects SAF

to play the

largestrole in

decarbonizing

aviation.”

Environment & Sustainability

IATA Annual Review 2023

needs for strategic net-zero

technologies by 2030. This could

be an opportunity to create a more

robust SAF industry in Europe.

The proposed legislation still

needs approval from the European

Parliament and the EU Council.

IATA opposes SAF mandates

on airlines. Several countries

established a SAF mandate, with

set requirements to include a

minimum of SAF in jet fuel for

all commercial ights from the

country’s airports. Imposing a

purchase obligation on airlines

when supplies are insucient is not

sound policy. As SAF is in the early

stages of market development,

mandates should only be used if

they are part of a broader strategy

to increase the production of SAF

and complemented with incentive

programs that facilitate innovation,

scale-up, and unit cost reduction.

Government policy has an

instrumental role to play in the

deployment of SAF and IATA

encourages policies which are

harmonized across countries and

industries, while being technology

and feedstock agnostic. Incentives

should be used to accelerate SAF

deployment.

Developing carbon

calculationtools and

expanding partnerships

In 2022, IATA launched IATA CO₂

Connect, an online tool based on

IATA’s CO₂ Calculation Methodology,

which provides the most accurate

CO₂ emission calculations for

any given commercial passenger

ight. IATA CO₂ Connect responds

to the growing demand for CO₂

data transparency linked to airline

specic and actual fuel burn

information and load factors.

Thissets it apart from theoretical

data models that already exist

onthe market.

Holistic schemes and

guidance for environment

andsustainability

The IATA Environmental

Assessment (IEnvA) program is

an evaluation system designed to

independently assess and improve

the environmental management

of an airline. It requires airlines and

their supply chain aliates to keep

track of, mitigate, and manage

environmental and sustainability

risks. This assessment is aligned

with internationally accepted

management standards to

eectively address the most

signicant environmental

challenges that the aviation industry

faces today. Some 50 airlines are

part of the IEnvA program, with

35 of them fully certied and the

other in the process of being

certied. In addition to running the

IEnvA program, in 2023, IATA has

launchedthe IATA Environmental

Assessment for Airports and

Ground Service Providers (IEnvA

forAirports and GSPs).

The IATA Airport Development

Reference Manual is the essential

guide for the development of

sustainable world-class airport

facilities. It is the industry reference

manual for all aspects of airport

planning, capacity denition,

and facilities design. The latest

edition contains new chapters

on environmental sustainability,

pandemic resilience, accessibility,

universal design, an alternative

approach to capacity calculations,

guidance forecasting and planning

for the construction delivery phase,

and the concept of operations.

Other sustainability

challenges also require focus

Making aircraft cabins more

sustainable is a priority for the

industry. Airlines recognize the

importance of reducing, reusing,

and recycling cabin waste from

their ight operations to minimize

their environmental footprint.

Passengers are increasingly

concerned about the impact of

cabin waste, notably single-use

plastics (SUPs), while governments

are focusing on minimizing food

waste. The dichotomy is that less

packaging can lead to more food

waste. Hence, airlines are concerned

that asymmetric regulatory systems

will inhibit their ability to respond to

these challenges.

IATA and four other industry

groups, together with more

than 20 airlines, 11 airports and

airport groups, and a catering

company, have signed a joint

statement calling for the European

Commission to review its approach

to international catering waste

so that the aviation sector can

make a more positive contribution

to the circular economy through

cabin waste prevention, reuse, and

Environment & Sustainability

IATA Annual Review 2023

recycling initiatives. The adoption

of smarter International Catering

Waste regulations will result in

less cabin waste, more material

recovery, nancial benets, and

improved customer satisfaction. It

will further support policymakers

in maintaining high animal health

status through thorough checks,

thereby contributing to the EU’s

ambitious circular economy goals.

The issue at hand is that health

authorities believe food waste

could compromise animal health

through the importation of disease

even though there is no risk-based

assessment to prove this.

In 2022, UN Member States agreed

to develop a legally binding deal to

end plastic pollution. The details

are expected in 2024. With this

in mind, IATA engaged with the

UN Environment Program (UNEP)

process to contribute the airline

perspective to the agreement,

as airlines are unique in having to

comply with dierent regulations

at both ends of a journey. In

addition, IATA is working with

UNEP to develop a UNEP-IATA

guidance on Rethinking Plastics

in Aviation, which will provide

an overview of regulations,

guidance on SUP replacement,

and recommendations for the

industry. It will also address

concerns regarding the patchwork

of unharmonized measures that

theindustry faces.

IATA is also active in addressing the

challenge of illegal wildlife trade.

In 2023, IATA assumed the role of

Vice-Chair of the United for Wildlife

(UfW) Transport Taskforce, which

brings together global transport and

freight industry experts, including

airports, shipping companies, and

airlines, with law enforcement and

other agencies to identify and

facilitate action led by the private

sector. Since its inception, 79 airlines

have signed the Buckingham Palace

Declaration on the Transportation of

Illegal Wildlife Products. Signatories

from the aviation community

also include Airports Council

International (ACI), African Airlines

Association (AFRAA), Association

of South Pacic Airlines (ASPA),

Airlinesfor Europe (A4E), Airlines

Association of Southern Africa

(AASA), and individual airports.

Moreover, IATA is working on a

pilot project with an enforcement

authority in Southern Africa on

the automated detection of illegal

wildlife concealed in baggage

usinga machine-learning algorithm.

It is additionally raising awareness

with enforcement authorities of

advances in aviation digitization

and automation that could

provideadditional sources of

digitalintelligence.

EU Energy Taxation

Directive (ETD)

This is a European Commission

proposal to introduce and gradually

increase a jet fuel tax over a

period of 10 years. This requires

unanimous agreement from all

member states, and there is some

reluctance to introduce such a tax.

A compromise was put forward

by the Czech Presidency at the

end of 2022 but was not adopted.

The compromise has been further

modied to exempt island member

states on a temporary basis and

negotiations are continuing.

Governments must honor their

obligations under the Chicago

Convention that exempts jet fuel for

international ights from taxation.

As with most aviation taxes, this is a

pure money grab by governments,

which will undermine the freedom

for people to move within the EU and

which has no environmental benet.

European businesses surveyed

in October 2022 listed “reducing

the cost” as their number one

request when asked what European

governments should prioritize in

terms of improving air transport.

The ETD proposal goes against

the needs and wishes of European

travelers and business, and IATA

and industry representatives

continue to campaign against it.

“In 2022, UN

Member States

agreed to develop

a legally binding

deal to end

plastic pollution.

The details are

expected in 2024.”

Diversity & Inclusion

IATA Annual Review 2023

DIVERSITY & INCLUSION

25by2025 driving better

female representation

across the industry

hen 25by2025 was

launched in 2019, it

was a rallying call for

the industry to look

at the gender imbalances and to

take steps to redress them. Three

and a half years after the launch,

there areimprovements across the

industry against the key metrics.

At the end of 2022, there were

176signatories to the pledge,

including 23 from Africa /Middle

East. 36 from the Americas, 25

fromAsia-Pacic, 12 from North

Asia and 80 from Europe.

As part of the ongoing eort to

monitor diversity, equity and

inclusion, IATA continues to

collect data from all the 25by2025

signatories on a yearly basis. As

the number of signatories has

increased, so too has the available

Diversity & Inclusion

IATA Annual Review 2023

data, giving a more robust picture

ofthe shape of the industry.

Collected data shows that the

overall number of women in

aviation increased 42% in 2022

and the number at senior levels

is at 28%, a near 15% increase on

2021. The most visible change is in

technical roles where 18% of jobs

are occupied by women compared

with 12% in 2021. The percentage

of women on the ight deck is now

at 5%, which represents a 23%

increase over last year.

As a result of the changing

paradigm, in 2022 ve female

CEOs were appointed, at Austrian

Airlines, El Al, Hahn Air, KLM Royal

Dutch Airlines, and Pegasus

Airlines. As a result, the total

number of women CEOs among

IATA member airlines reached 28.

These changes at the leadership

level prove the value of diversity

and inclusion and are a beacon of

change for the entire industry.

To help the industry become

diverse and inclusive and to make

its commitment to reaching—or

exceeding—25by2025 targets

a reality, IATA continues to

organize quarterly calls with all

the signatories where they share

best practices and discuss the

business benets of making the

industry more diverse. The focus

“Developments at the

leadership level prove

the value of diversity

and inclusion and are

a beacon of change

forthe entire industry.”

of those meetings is to inspire

others to make bold decisions

and not shy away from becoming

a driving force for a diverse and

inclusive industry.

In addition to quarterly calls,

IATA is committed to the annual

Diversity & Inclusion Awards

that focus on recognizing female

leadership in the industry.

The 2022 winners included

the CEO of Pegasus Airlines,

Güliz Öztürk (Inspirational Role

Model Category), Kanchana

Gamage, Founder and Director

of The Aviatrix Project (High Flyer

Category) and airBaltic (Diversity

&Inclusion Team category).

To further strengthen the

importance diversity and

inclusion plays in the industry,

IATA partneredwith PWC to

showcase best practices and

inspire the aviation value chain

to drive diversity and inclusion

initiatives. During 2023, this

partnership will be complemented

with a maturityassessment that

airlines can take to benchmark

themselvesagainst their peers.

Passenger Experience

IATA Annual Review 2023

PASSENGER EXPERIENCE

Getting passengers

ready to y

Passenger Experience

IATA Annual Review 2023

s a result of the COVID-19

pandemic, many projects

aimed at improving the

passenger experience

were put on hold. With trac

rebounding signicantly during

the main travel seasons in 2022,

it became clear that investments

in automation and digitalization

needed to be revived.

Arriving at the airport

ready to y

Several new IATA standards will

bring the aim of having travelers

arrive at airports ready to y one

step closer to reality. In 2022,

for example, IATA releasedits

recommended practice on

Digitalization of Admissibility.

This will enable travelers to

digitally prove admissibility to

an international destination,

avoidinga stop at the check-

in deskor boarding gate for

documentchecks.

Programs are already in use in

various airports enabling travelers

to move through such airport

processes as boarding without

producing paper documentation

because their boarding pass is

linked to a biometric identier.

But in many cases travelers still

have to prove their admissibility

at a check-in desk or boarding

gate with physical checks

of paper documentation,

includingpassports, visas

andhealth credentials.

The Digitalization of Admissibility

standard will advance the

realization of One ID by providing

a mechanism for passengers

to digitally obtain all necessary

pre-travel authorizations directly

from governments before

their trip. By sharing the “OK

to Fly” status with their airline,

passenger airport document

checks will become redundant.

One ID enables travelers to

movefrom curb to gate using

asingle biometric travel token,

suchas a face, ngerprint

or iris scan and can provide

their information direct to

governments without airlines

acting as intermediaries.

“The new standards

have been developed

to protect passengers’

data and ensure

that travel remains

accessible to all.”

In the future, travelers will

be able to:

● Create a verified digital identity

using their airline app on their

smartphone.

● Send proof of all required

documentation to destination

authorities in advance of travel.

● Receive a digital approval of

admissibility in their digital

identity/passport app.

● Share the verified credential—not

all their data—with their airline.

● Obtain confirmation from their

airline that all is in order.

Data Security

The new standards have been

developed to protect passengers’

data and ensure that travel remains

accessible to all. Passengers

remain in control of their data and

only veried approvals—not the

data behind them—are shared

peer-to-peer, with no intermediating

party. This is interoperable with

ICAO standards, including those

forthe Digital Travel Credential.

Manual processing options will

be retained so that travelers

will have the ability to opt out of

digitaladmissibility processing.

Cargo

IATA Annual Review 2023

CARGO

Maintaining air cargo’s

positive progress

he air cargo business

has been reshaped as a

result ofthe COVID-19

pandemic. Its contribution

to the bottom line of airlines

is more evident, for example,

with both revenues and yields

remaining above pre-pandemic

levels. However, air cargo volumes

havecome under pressure

since mid-2022 as governments

introduced economic cooling

measures. Nonetheless, industry

growth drivers, such as the

expanding middle class, the need

for quick delivery of high-value

goods and pharmaceuticals,

andthe growing e-commerce

market are strong.

To maintain air cargo’s positive

development, the industry is

focusing on the following areas:

● Sustainability

● Digital Transformation

● Safety

Sustainability

Sustainability is a priority for the

entire aviation industry, including

air cargo. The development of

sustainable aviation fuels (SAF)

has emerged as the key driver in

realizing net zero carbon emissions

by 2050. The increased production

of SAF has led to growing demand

from shippers, customers,

and regulators for immediate

carbon-neutral shipping options

and assurances of sustainable

operations. To address this need,

IATA has made signicant progress

in three key areas:

● Effective CO2 Emissions

Calculations

To ensure CO2 data

transparency,accurate and

standardized emissions

calculations are essential, and

IATA is aiming to provide airline-

specic data linked to actual

fuel burn, in conjunction with the

industry-approved methodology,

Cargo

IATA Annual Review 2023

RP1678. This will provide the

basis for CO2 Connect for Cargo,

a tool that will provide reliable

and standardized emissions

calculations.

● IEnvA for Cargo

The reach of the IATA

Environmental Assessment

(IEnvA) program has been

extended to various stakeholders

in the air cargo value chain,

including airports, cargo handling

facilities, freight forwarders, and

ramp handlers. This enables a

collective move towards a more

sustainable industry.

● Waste Reduction across

theCargo Supply Chain

The cargo industry is actively

collaborating to reduce waste

generated throughout the cargo

supply chain, including plastic.

Through concerted eorts,

such as optimizing packaging,

exploring alternative materials,

and implementing recycling

initiatives, a more sustainable

andcircular economy within the

cargo industry will be fostered.

Digital Transformation

Digitization is another key priority

for the air cargo industry, focusing

on the following three main goals:

● 100% Airline Capability of

ONE Record by January 2026

Work across the industry to

ensure the full implementation

of ONE Record by January 2026

continues. The various data

standards in use for transporting

documents will be replaced with a

unied record for every shipment,

streamlining processes and

enhancing eciency.

● Developing Digital Standards to

Support the Global Supply Chain

Tracking device standards,

knownas the IATA Interactive

Cargo guidelines, have been

nalized, improving the

monitoring of the quality and

accuracy in worldwide shipping of

time and temperature-sensitive

● Enhancing Countermeasures

IATA has been collaborating with

the European Union Aviation

Safety Agency (EASA) and the

Federal Aviation Administration

(FAA) to develop a test standard

for re-resistant aircraft

containers in the event of a

lithium battery re. The goal is for

Unit Load Devices (ULDs) to be

capable of containing a lithium

battery re for up to six hours,

thus mitigating potential risks.

● Addressing the Challengeof

Lithium Battery-Powered

Vehicles

IATA has successfully established

a single standard for identifying

all lithium battery-powered

vehicles, including hoverboards,

e-scooters, e-bikes, and

traditional passenger vehicles,

throughout the transport process.

This new standard, which comes

into eect on 1 January 2025, will

ensure consistency and safety

in the transportation of lithium

battery-powered vehicles.

● Expansion of CEIV Lithium

Battery Program

IATA’s Center of Excellence for

Independent Validators (CEIV)

Lithium Battery program has

experienced signicant growth

in the last 12 months with 31

companies now certied. This

program encompasses the

entire supply chain, including

airlines, freight forwarders, cargo

handlingfacilities, and shippers.

goods. Additionally, collaboration

with the European Commission’s

“FEDeRATED” project supports

the development of interoperable

technologies and data

architectures for multi-modal

transport.

● Compliance and Support

forDigitalized Customs

andTrade Facilitation

Aviation is working with

governments to reduce

operational barriers at borders,

and secure the ow of goods.

Notably, IATA has been

activelysupporting the rollout of

the EU’s Pre-Loading Advance

Cargo Information (PLACI)

System, contributing to the

industry’s modernization.

Safety

Safety is a primary concern for the

air cargo industry, with a particular

focus on the safe transportation

oflithium batteries.

Eorts in this area have centered on:

● Stopping Rogue Shippers

IATA has been actively urging civil

aviation authorities to take strong

action against rogue shippers,

emphasizing the importance

of complying with shipping

regulations. Moreover, IATA

is advocating for government

support of ICAO’s eorts to

strengthen the standards

outlined in Annex 18: The Safe

Transport of Dangerous Goods.

“Safety is a primary

concern for the air

cargo industry.”

Safety

IATA Annual Review 2023

SAFETY

Transitioning to

Risk-Based IOSA

ver 32 million ights

were operated in 2022,

an increase of 25%

compared with 2021,

but still 31% below the 2019

(pre-pandemic) gure.

This rapid ramp up in services

did not negatively impact

overall safety levels, which

continued to improve in some

key metrics. Industry-wide,

the number of fatal accidents,

the fatal accident rate and the

fatality risk all declined last year

versus 2021 and the ve-year

rate of 2018-2022. The all-

accident rate for IATA member

airlines improved against

bothyardsticks as well.

Region 2022 2021 2018-

2022

Africa 0.00 0.00 0.28

Asia Pacic 0.00 0.33 026

Commonwealth of

Independent States (CIS)

1.18 0.00 0.98

Europe 0.00 0.27 0.12

Latin America and

theCaribbean

0.95 0.00 0.34

Middle East and North Africa 0.00 0.00 0.00

North America 0.00 0.14 0.06

North Asia 0.46 0.00 0.12

Global 0.17 0.13 0.16

Region 2022 2021 2018-

2022

Africa 7.05 5.59 4.09

Asia Pacic 0.00 0.00 022

Commonwealth of

Independent States (CIS)

0.00 42.53 13.30

Europe 0.00 0.00 0.00

Latin America and

theCaribbean

0.00 0.00 1.86

Middle East and North Africa 0.00 0.00 1.44

North America 0.00 0.00 0.35

North Asia 0.00 0.00 0.00

Global 1.47 1.77 1.12

2022 by the numbers

2022 2021 5-year average

(2018-2022)

All accident rate

(accidents per one

million ights)

1.21

(1 accident every

0.83 million ights)

1.13

(1 accident every

0.89 million ights)

1.26

(1 accident every

0.81 million ights)

All accident rate for IATA

member airlines

0.49

(1 accident every

2.1 million ights)

0.61

(1 accident every

1.6 million ights)

0.76

(1 accident every

1.4 million ights)

Total accidents

39 29 43

Fatal accidents

(1 jet and

4 turboprop)

(1 jet and

6 turboprop)

(3 jet and

4 turboprop)

Fatalities onboard

158 121 231

Fatality risk

0.11 0.23 0.13

IATA member airlines

fatalityrisk

0.02 0.00 0.05

Jet hull losses (per

one million ights)

0.17

(1 major accident every

5.8 million ights)

0.13

(1 major accident every

7.6 million ights)

0.16

(1 major accident every

6.4 million ights)

Turboprop hull losses

(per one million ights)

1.47

(1 hull loss every

0.68 million ights)

1.77

(1 hull loss every

0.57 million ights)

1.12

(1 hull loss every

1.2 million ights)

Total ights (million)

32.2 25.7 34.4

Jet hull loss rates by region of operator

(per 1 million departures)

Turboprop hull loss rates by region of operator

(per 1 million departures)

Safety

IATA Annual Review 2023

The global average jet hull loss rate

rose slightly in 2022 in relation to

the ve-year average (2018-2022).

Five regions saw improvements, or

no deterioration, compared to the

ve-year average.

The number of turboprop accidents

declined in 2022 compared with

2021 but they accounted for four

of the ve fatal accidents in 2022

with loss of life to passengers and

crew. Although sectors own by

Safety

IATA Annual Review 2023

“IATA remains focused

on the three pillars

of the IATA Safety

Strategy, relating to

Safety Leadership;

Safety Risk; and

Safety Connect.”

turboprops represented just 10.6%

of total sectors own, turboprops

were involved in 36% of all

accidents, 80% of fatal accidents,

and 16% of fatalities in 2022.

Six regions showed improvement or

no deterioration, in the turboprop

hull loss rate in 2022 when

compared to the ve-year average.

The two regions to see increases

compared to the ve-year average

were Latin America/Caribbean and

sub-Saharan Africa.

IATA is working to support the

LatinAmerica/Caribbean region

with the adoption of safety best

practices through regional bodies

of IATA and ICAO.

In parallel, the priority for Africa

continues to be implementation

ofthe ICAO’s safety-related

standards and recommended

practices (SARPS).

Increased use of data-driven

analysis, using tools such as IATA’s

Global Aviation Data Management

(GADM) program, can also help

deliver regional improvements. In

addition, in both regions, the IATA

Standard Safety Assessment (ISSA),

for operators of smaller aircraft

that are not eligible for the IATA

Operational Safety Audit (IOSA)

program, can provide support.

Wanted: prompt and thorough

accident reports

Most accident fatalities in 2022

(138 out of the total 158) have yet

to be classied. This illustrates

the shortfall by countries and

their accident investigation

authorities as prompt and accurate

investigation reports are critical

to improving safety and required

under ICAO Annex 13. Advocating

for more timely publication of

comprehensive accident reports

will be an IATA priority in 2023.

Other 2023 priorities include:

● Improving runway safety, which

means continuing to look at, and

coordinate activities relating

to, a number of precursors

to runway events, including

aircraft performance, unstable

approaches, and hard landings.

● Ensuring the Ground Proximity

Warning System (GPWS)

database of obstacles is accurate

and remains updated. There

were no Controlled Flight into

Terrain (CFIT) accidents in 2022.

When they occur, however,

CFIT accidents account for a

substantial number of fatalities.

Between 2017 and 2021, six

CFIT accidents resulted in 108

fatalities. IATA has successfully

campaigned for more frequent

database update cycles, and it will

continue this activity in 2023.

● Ensuring that flight crew respond

promptly to Traffic Collision and

Avoidance Systems (TCAS) alerts.

Although the last midair collision

between two commercial aircraft

occurred more than 20 years

ago, such accidents account for

a substantial number of fatalities.

Addressing airspace where

TCAS-related maneuvers occur

more frequently will support the

reduction of these hotspots.

Beyond these activities, IATA

remains focused on the three pillars

of the IATA Safety Strategy, relating

to Safety Leadership; Safety Risk;

and Safety Connect.

IOSA

Since IOSA was formally rolled

outin 2003 with Qatar Airways

as the rst participant, it has

become the global standard

foroperational safety audits.

Since 2005 (the rst year in

whichcomplete data is available),

the all-accident rate for IOSA

airlines is more than twice as

good as for non-IOSA airlines

(1.40 vs. 3.49). In 2022, carriers

on the IOSA registry had an

aggregate safety record that

wasfour times better than

non-IOSA carriers.

In 2022, IATA began transitioning

IOSA to a risk-based model.

UnderRisk-Based IOSA, audits

will be tailored to the airline’s

individual operating prole

and history. Additionally,

IOSA is introducing a maturity

assessment of the operator’s

Safety Management System

(SMS) and other safety critical

programs. By focusing on

pertinent safety risks while

maintaining a baseline of safety,

Risk-Based IOSA will contribute to

raising the safety bar even higher.

Safety

IATA Annual Review 2023

Aviation Spectrum 5G

Protection of the civil aviationradio

spectrum and aircraft safety

systems is an IATA top priority.

The rollout of C-band 5G

telecommunications operations

at 188 US airports beginning

in January 2022 created the

threat of enormous disruption to

aviation, owing to the potential

risk of interference with radio

altimeters (radalts) that are critical

to aircraft landing and safety

systems. Disruptions were only

avoided by an eleventh-hour

compromise between the US

Federal Aviation Administration

(FAA) and the respective telecom

service providers (telcos). Under the

compromise, the telcos agreed to

restrict the power levels of their 5G

C-band towers near US airports and

approach paths until 1 July 2023

(subsequently the telcos agreed

to extend this to 1 January 2028).

Even with this agreement, however,

the continuing risk of interference

with aircraft radalts wasseen as so

signicant by the FAA that airlines

were only permitted to operate at

aected airports in lowvisibility

(Category 2 and Category 3)

conditions through oneof

twomethods:

● Alternative Means of Compliance

(AMOC) under which avionics

and aircraft original equipment

manufacturers (OEMs) establish

that specific aircraft / radalt

combinations provide sufficient

resilience against interference

to continue to utilize low visibility

landing procedures at the

affected airports.

● Modifying existing radalts or

replacing them with newer

models at airline expense, to

enable unrestricted operations

atagreed 5G power levels.

In May 2022, the FAA informed

airlines that, as of 1 July 2023, the

AMOC process would end. Rather,

there will be a blanket requirement

dening a minimum performance

level for radalts to continue to

utilize instrument landing systems

at the 188 aected US airports.

Radalts not meeting the minimum

performance level would have to

be replaced or upgraded at airline

expense. The cost of eet-wide

radalt upgrading is estimated at

more than $638 million. From 1

February 2024, aircraft that have

not been retrotted will be banned

from operating in US airspace.

IATA continues to advocate for

an extension of the 1 July 2023

deadline, which is not achievable

formany airlines owing to supply

chain and other challenges.

Furthermore, the required retrots

are a temporary x as they are

not suciently resilient in the

face of full power 5G C-band

transmissions. New 5G tolerant

radalt standards are being

developed but are not expected

to be approved before the second

half of 2024. Following that, radalt

makers will begin the lengthy

process to design, certify, and build

the new devices for installation in

thousands of existing aircraft and in

all new aircraft delivered between

now and 2028. Four-and-a-half

years is a tight timeframe for an

undertaking of this scale.

The situation in the United States

is fortunately, unique. With a few

limited exceptions, governments

have recognized the importance of

ensuring that aviation and 5G can

co-exist. In Europe, for example,

the dedicated 5G spectrum is

in the 3.4GHz to 3.8GHz range,

far enough away from that used

by radio altimeters. The power

levels are generally far lower too.

French transmission power is ten

times lower than that licensed

in the United States. Elsewhere,

Australia, China, and Japan have

all taken sensible precautions. In

Japan, for example, the macro cell

power levels are only 4% of that

permitted in the United States

and the small cell power levels

are less than 1% of US levels. At

present, Canada has limited 5G

C-band transmission power. It has,

however, introduced exclusion

zones on an interim basis, and

antennas have a national down-

tilt requirement. IATA is working

with other aviation stakeholders

to ensure the industry’s

interests are represented in

radio spectrum allocations.

IATA takes a leading role in

dening and representing airline

requirements at the International

Telecommunications Union (ITU)

World Radiocommunication

Conferences (WRC), which meet

every three or four years.

Ligado Markets

Another threat to aviation radio

spectrum comes from Ligado

Networks, which received

US Government approval to

operate a nationwide wireless

broadband network using

transmitters operating near the

spectrum employed by the Global

PositioningSystem (GPS).

The industry is concerned that

Ligado’s transmissions adjacent to

GPS frequency bands will create

interference for GPS receivers,

potentially disrupting aviation safety,

navigation, and landing systems that

require GPS to be fully operational.

Additionally, the FAA’s NextGen Air

Trac Management modernization

program depends on GPS as one of

its foundation technologies.

IATA has joined a broad coalition

of stakeholders across many

industries that also rely on GPS

to oppose the Ligado Networks

decision. IATA is also advocating

with other stakeholders against

Ligado’s application to operate

a similar wireless broadband

networkin Canada.

Safety

IATA Annual Review 2023

“IATA is working

with other aviation

stakeholders to

ensure the industry’s

interests are

represented in radio

spectrum allocations.”

Security

IATA Annual Review 2023

SECURITY

Evolving security

to meet new risks

nternational aviation security

is evolving with some key

governments, including the

United Kingdom and United

States, beginning to move to

a more balanced approach

between regulators and industry.

Governments continue to hold the

primary responsibility for security,

though some are inviting industry

expertise and the appetite for

prescriptive measures is shifting

toward a willingness to let the

industry be responsibl e for the

performance of its measures. In

sum, governments are engaging

with airlines, allowing airlines

to take on a more active role,

rather than just issuing rules

and regulations. This includes

regulators’ recognition of airlines’

Security Management System

(SeMS), an element of the IATA

Operational Safety Audit (IOSA)

since 2007.

The overall baseline of security

measures contained in Annex

17 to the Chicago Convention

provides a robust framework in

the coordination and overall civil

aviation protection regime. In 2022,

with industry encouragement, ICAO

completely reformed international

incident reporting guidance

and mechanisms, creating an

internationally harmonized

language and taxonomy for the

Security

IATA Annual Review 2023

reporting, sharing and analysis

of incidents. This will lead to a

stronger system.

Concurrently and with industry input,

Annex 17 Aircraft Operator Security

Program (AOSP), a standard that

created signicant unnecessary

administrative duplication and

burden on the industry, was

completely overhauled and

streamlined. Under the old standard,

which was in eect for 47 years, each

state required its own AOSP. With the

updated standard in eect, states

have the option of recognizing the

AOSP of an airline from a dierent

state of registry. Instead of the state

requiring the full security program, a

State Supplemental Procedure has

been created to reect any additional

measures imposed on carriers by

that state.

Furthermore, in September 2022,

ICAO publicly shared guidance

material into key security

management functions that all

stakeholders adopt but that was

previously restricted. Additionally

in 2022, Amendment 18 to Annex

17 was published. Signicantly,

this Amendment incorporates a

higher recognition of industry best

practices and expertise than was

previously the case.

Conict zones

Safety and security risks

associated with hostilities within

conict zones are a major concern

for airlines. A prime example

are the wide-ranging airspace

restrictions imposed on civil aircraft

operators in and around Ukraine

following Russia’s invasion. The

broader issueis the unhelpful

mix of politicsand aviation that is

unrelated to safety concerns, but

that has led to the inability of many

airlines to operate over large parts

of Russian airspace.

Africa and the Middle East

remain regions of notable risks,

as illustrated by the destruction

of civilian aircraft during the

2023 hostilities in Sudan. States

continue to issue Notice to Air

Missions (NOTAM) to assist airlines

in managing ight operation risk

exposure and avoidance. However,

this approach remains largely an

after-the-fact notication, lacking

globally harmonized procedures,

and varies between States in the

types of restrictions applied.

IATA continues to support the

development of policy that

supports information sharing

among states and between states

and industry and the harmonization

of restrictions and related areas

via the Safer Skies Consultative

Committee (SSCC). The SSCC has

been focused on updating ICAO

best practices related to conict

zones and capacity development

when conducting risk assessments.

To limit unintended reactive

responses through greater civil and

military information sharing, IATA,

in partnership with the SSCC, hosts

informal unclassied intelligence

industry briengs on situations of

evolving relevance. The ability to

host such unclassied briengs

puts important information into

the hands of people who need it

to conduct risk assessments in

airspace security and safety.

Lastly, in 2022, IATA released

itsAVSEC Insight product, which

is an open-source intelligence

tool(see sidebar above).

Passenger Security

In 2022, IATA renewed its focus

on highlighting redundancies and

ineciencies in the passenger

security checkpoint process. In

line with the IATA Global Passenger

Survey results, IATA released a

clear expectation statement on the

adoption of evolving technology

in passenger screening and

overall improvements in the global

baseline. Challenges remain, and

the patchwork of security measures

that oer zero trust and a lack of

mutual recognition between airports

for international connections on

thefollowing items persist:

● Screening Devices

Passengers pay a high price

in terms of inconvenience at

airport checkpoints—removing

shoes, laptops, and liquids out

of carry-on bags and strict limits

on liquids and gels. States have

been too slow in introducing

advanced screening equipment

that eliminates the need for

these measures. The December

2022 announcement by the UK

Government adds momentum

to a development that has

already occurred at airports

in other countries, including

JapanandBahrain.

● Interstate Cooperation

Cooperation and information

IATA AVSEC Insight

IATA AVSEC Insight gathers risk-related information from a

wide variety of sources, including niche and local-language

news media as well as NOTAMs (Notice to Air Missions)

and other ocial sources. It enables users to manage and

identify business risks at an early stage, monitor them

in real time, and conduct post-event analyses. The tool

covers threats and continuity risks from natural disasters,

civil unrest and protests, geopolitical developments,

transnational crime, and cybersecurity to name a few.

AVSEC Insight incorporates advanced machine learning

and natural language processing capabilities to ensure

the platform becomes more intelligent and robust as the

dataset grows. Information can be customized by the

user to risk prole and operational needs, by country,

city, airport or ight information region (FIR). Better and

faster identication of risk means safer and more secure

operations and resource optimization.

Security

IATA Annual Review 2023

IATA also continues to

maintain regular engagement

with governments on the

implementation of risk-based

security for passenger and hold

baggage security.

Aviation cybersecurity

Cyberattacks are increasing across

all industries and aviation is no

exception. Preparedness at the

highest level is essential, especially

in view of the rapid introduction of

new digital technologies across

the aviation value chain. Moreover,

airlines and their supply chains

need to ensure that they are able

to comply with developing aviation

cybersecurity regulations around

the world.

IATA continues to work on

standards and guidance material

that aims to strategically

strengthen the implementation of

airline cybersecurity management

programs while minimizing risks.

From a cybersecurity counter-

terrorism perspective, the ICAO

AVSEC Panel on Threat and

Risks has raised the risk level

of cyber-attacks from low to

medium. Thus, countries are

incrementally applying regulatory

requirements for incident reporting

and risk assessment obligations.

Concurrently, non-sector specic

ransomware risk has intensied,

including automated data theft

campaigns and targeted extortion

operations against organizations.

Airlines, like all businesses, rely

increasingly on technology and

communications links across

the supply chain. This extends to

aircraft, which have complicated

supply chains and, in operation,

interact with many parties.

Assessing and mitigating the risks

requires cybersecurity by design,

so that resilience is built into

systems rather than added after

they are in operation.

sharing among States, and with

industry, is not yet sufficient to

ensure risk-based measures are

applied in a timely and efficient

manner. The policy framework

exists to address this, but it will

require aligning certification of

screening technologies across

national boundaries, more trialing

of new technology with screeners

and passengers, and the sharing

of results. In sum, there needs to

be better international support

for innovation in passenger

screening systems.

● Trust

Bilateral and multilateral trust

has not achieved critical levels

at passenger checkpoints. It is

insufficient to eliminate wasteful

duplication at intermediate points

of the passenger journey, for

example, and reviews of secondary

security measures for continued

relevance, such as gate screening,

are far too rare. The gold standard

is Canada/Europe where certain

airports honor one-stop security

without mandating transit and

transfer screening measures.

But even where agreements

are in place that would permit

expansion of this model, too

many airports are not sufficiently

coordinated and/or are unwilling

to undertake the infrastructure

and process changes that would

be necessary to make it happen. In

addition, some countries maintain

immigration on arrival mandates

that prohibit the ability for bilateral

and multilateral adoption of one-

stop measures, the United States

being the prime example.

The risked-based approach

A risk-based model has not

replaced prescriptive one-size

ts all approaches. Even without

a clear link to risk or vulnerability,

unilateral countermeasures still nd

their way into national regulations,

such as secondary screening

imposed on airlines. This was

recently made evident by the recent

law mandating that FAA impose a

rule requiring secondary cockpit

barriers for future aircraft deliveries

in the United States, despite the

eectiveness of existing post 9/11

cockpit door measures.

“Preparedness at

the highest level is

essential, especially

in view of the rapid

introduction of new

digital technologies

across the aviation

value chain.”

Modern Airline Retailing

IATA Annual Review 2023

MODERN AIRLINE RETAILING

A world of

100% oers

and orders

odern Airline Retailing

(MAR) was launched in

2022 to support airlines in

their eorts to meet rising

customer expectations brought

on by customer experiences in

the online shopping world. Those

experiences cannot be met by the

legacy standards, processes, and

technology that underpin airlines’

indirect sales and distribution.

This initiative builds on the New

Distribution Capability (NDC)

standard but is more encompassing.

A consortium comprising 12

airlines / airline groups was

created in December 2022 to

accelerate the adoption of MAR.

The consortium members have

all started the retailing journey

and have committed subject

matter experts to help develop

the variousworkstreams that are

described in more detail below.

Modern Airline Retailing

IATA Annual Review 2023

Becoming a modern retailer

The MAR program is built on three

pillars: digital identication of

customers and participants in

the value chain; oers using NDC

standards; and standardizing

fulllment with a standardized order

document. Each of these pillars is at

a dierent level of maturity.

Digital identication

IATA’s One ID standard will allow

passengers to streamline their

journey with advance information

sharing and a contactless process

at the airport based on biometric

recognition. In turn, airlines can

oer a seamless experience across

dierent channels and touchpoints,

including during the shopping

process, should the customer

choose to be identied.

Concurrently, as airlines move

toward MAR and a world of oers,

identication and codes for

organizations in the distribution

value chain need to adapt to a

non-legacy environment to enable

airlines to create oers based on

the identity and prole of the seller

involved. Several gaps have been

identied in the existing identity

process:

● Airlines are not able to fully

identify all parties in the

distribution value chain.

● IATA coding structures cannot

scale to cover all parties.

● Codes do not provide end-

to-end security and offer

loopholes forfraudulent use

andimpersonation of identities.

Airlines and other travel industry

suppliers will benet from clear,

digital identication of potential

partners to make relevant dynamic

oers to the seller at the other end

of the transaction. Travel sellers,

meanwhile, will be in full control of

their own identity and information

and will only have to disclose to

the airline or supplier the relevant

information required to request

a tailor-made oer and complete

a transaction. Stronger identity

verication mechanisms will reduce

fraud and provide end-to-end

security in the transaction process.

Retailing with oers

Retailing with oers is the most

mature pillar of MAR, made possible

by the introduction of NDC. Some

airlines already have over 30% of

their indirect bookings coming

through NDC channels. Because

NDC is built on modern internet

language, rather than the decades

old EDIFACT standard, airline

products can be displayed in

indirect channels exactly as they

appear on the airline’s own website.

Major announcements underscore

the pace of transformation. In April

2023, American Airlines removed

40% of its domestic fares from

EDIFACT-powered channels. The

fares are only available through

direct or NDC-enabled channels.

Given the size of the airline and

the market, this represents an

enormous development.

Finnair will end indirect ticket sales

via EDIFACT channels entirely

in 2025 and Air France-KLM has

started to shift some price points

to NDC and direct channels only. Air

France-KLM also announced that

by 2027 90% of their indirect sales

will be through NDC channels.

A key benet of NDC is the ability

to introduce continuous pricing.

Historically, using EDIFACT, airlines

have been limited to just 26 fare

classes (corresponding to the

number of letters in the English

alphabet). Rather than be restricted

to 26 fare classes and the jump

in prices that implies, continuous

pricing means the customer can

“IATA’s One ID

standard will

allow passengers

to streamline

their journey.”

Consortium: Catalyst

fortransformation

The consortium consists of 12

airlines / airline groups: American

Airlines, Air France-KLM, British

Airways, Emirates, Finnair, Iberia,

LATAM, Lufthansa Group, Oman

Air, Qatar Airways, Singapore

Airlines, Turkish Airlines and

Xiamen Airlines.

The role of the consortium is

to work together through IATA

to accelerate the identication

of the technical standards

and pathways that take the

industryto a world of 100%

Oers and Orders.

To date, the consortium

has developed a reference

architecture that describes

the business capabilities an

airline will need in a world

of oers and orders. The

airline passenger service

systems of today will need to

be transformed into a typical

retailing platform comprising

oer and ordermanagement.

Theconsortium has also

delivered the business case for

moving to this world, and bythe

end of 2023 will have delivered

the potential transition pathways

for airlines and examined the

impactof this transition on

otherindustry players.

Modern Airline Retailing

IATA Annual Review 2023

access more acceptable price

levels more often. Many airlines

are testing continuous pricing, and

a few have large scale results. Air

France/KLM and United Airlines, for

example, reportedly have 50% and

40%, respectively, of their dotcom

and NDC sales continuously priced.

There are estimates that the ability

to hit consumer price points with

more granularity could boost

passenger revenues up to 4%.

Delivering with orders

The third pillar in the transformation

to MAR is delivering with orders.

Travelers will no longer need to

juggle between dierent reference

numbers and documents (passenger

name records-PNRs, e-tickets and

electronic miscellaneous documents-

EMDs). They will have a single

order detailing all that they have

purchased. Airline internal processes

surrounding revenue accounting

and reconciliation, meanwhile,

will be greatly simplied. Industry

standardsto support this transition

have already beendeveloped as

partof the ONEOrder project.

The changes go far beyond the

passenger facing elements.

Airlines rely on numerous systems

to operate their commercial IT.

The core system is the Passenger

Service System (PSS), with

reservation, inventory and

departure control systems also

vital. In a 100% oers and orders

environment, it is expected that

the core IT will consist of Oer and

Order Management modules that

will be far less costly than operating

a PSS for two main reasons: using

Oer and Order Management

modules will simplify some

processes and new IT players are

expected to provide more modern

solutions, increasing competition.

Servicing and disruption costs are

also expected to be reduced for

airlines implementing Oer and

Order Management modules and

this will signicantly improve the

customer experience, especially in

times of disruption. For example,

today a rerouting means changing a

booking, reissuing ticket(s) and also

potentially rebooking ancillaries.

This process will be signicantly

simplied in a world of orders.

According to a 2019 report from

McKinsey, airline retailing has a

value creation potential of up to

$7 per passenger. This is achieved

through a combination of increased

revenue and cost savings. Revenue

benets will include customers

having much greater access

to airlines’ ancillary products

and services and the increased

sales stimulation potential from

continuous pricing. On the cost

side, there are anticipated savings

from moving away from legacy

IT to modern Oer and Order

Management modules.

“Travelers will no longer need to

juggle between dierent reference

numbers and documents. They

will have a single order detailing

all that they have purchased.”

Financial Services

IATA Annual Review 2023

FINANCIAL SERVICES

Optimizing

nancial systems

he performance of IATA

Financial Settlement

Systems (IFSS) mirrored the

accelerated post-COVID

industry recovery throughout 2022.

The systems played a critical role

in facilitating the swift, secure, and

reliable movement of funds across

the air travel value chain during the

crisis. In 2022, the IFSS processed

$363.3 billion, excluding $18.5

billion in refunds, up 80.1% from

$201.7 billion in 2021, or $185.8

billion excluding $15.9 billion in

refunds. It did so while maintaining

extremely high levels of eciency

and security.

The Billing and Settlement Plan

(BSP) expedites and simplies the

selling, reporting, and remittance

procedures of IATA-accredited

travel agents and improves

nancial control and cash ow

for approximately 400 airlines. In

2022, the BSP processed $139.1

billion, net of $18.5 billion in

refunds, without which the amount

would have been $157.6 billion.

This compared with $58.8 billion

in 2021 net of refunds, or $74.7

billion including refunds. At the

close of 2022, there were 152 BSP

operations covering 180 countries

and territories. Their overall, on-

time settlement rate was 99.998%,

compared to 99.997% in 2021. The

default rate in 2022 was 0.007%,

versus 0.005% in 2021.

Cargo Account Settlement

System (CASS) simplies the billing

and settling of accounts between

airlines and freight forwarders. In

2022, CASS processed $66.1 billion,

with an on-time settlement rate of

99.998%. This contrasts with $57.4

billion and an on-time settlement

rate of 99.999% in 2021. At the end

Financial Services

IATA Annual Review 2023

of 2022, 96 CASS operations were

serving more than 250 general

sales and service agents (GSSAs)

and over 241 airlines.

Last year, IATA successfully

deployed the modernized CASSLink

invoicing system in the US air cargo

market, in collaboration with its

wholly owned subsidiary, Cargo

Network Services. Deployments to

other CASS markets are continuing

this year. Designed to meet the

billing and payment requirements of

the air cargo value chain, today and

in future, CASSLink is the most price

competitive solution in the market.

The IATA Clearing House (ICH)

provides fast, secure, cost-

eective settlement services

to 495 airlines and associated

companies in the aviation value

chain. In 2022, the ICH processed

$43.1 billion and had a settlement

rate of 99.997%. In 2021, the ICH

processed $19.2 billion and had a

nancial settlement success rate of

100%. The on-time settlement rate

was 100% for 2022 and 2021.

The IATA Currency Clearance

Services (ICCS) is a global cash

management system that enables

more than 467 airlines to centrally

control and repatriate their BSP

and CASS sales, including from

countries with severe currency

liquidity issues. The ICCS

processed $36.7 billion in 2022

compared with $22.5 billion in 2021.

Simplied Invoicing and

Settlement (SIS) is a cost-eective

electronic invoicing platform

that is legally compliant in 45

countries. It enables the exchange

of electronic data among airlines

and between airlines and direct

operating cost suppliers. The use

of a single standard, the IS-XML,

simplies business activity for

the industry and allows suppliers

to use one invoicing standard

for all their airline customers.

SIS automation and cost control

can save companies up to 2%

in operating expenses. In 2022,

SIS had more than 100,273

participants, including 455 airlines,

399 suppliers, 2,088 other entities

(air operators, GSSAs, GSAs, etc.),

and 97,331 IATA accredited agents.

SIS processed over 1.35 million

interline and supplier invoices

during 2022 and settled more than

$56.9 billion compared with $25.9

billion in 2021.

Enhancement & Financing

(E&F) gives air navigation

service providers (ANSPs)

and airports access to IATA’s

globally trusted systems and

processes for accurate billing data,

standardized e-invoices that can be

automatically validated, and secure

fund collection. E&F helps airlines

avoid late payment penalties,

reconciliation concerns, and

disputes through a standardized

billing process with a single point of

contact for questions or disputes.

In 2022, E&F processed $2.9 billion

versus $2.0 billion in 2021.