Professional Documents
Culture Documents
PLENARY
Chairman’s Opening
Remarks
Desmond Vertannes, Global Head of Cargo,
IATA
2010: The year air cargo rebounded!
Major contributor to
airline profits
3
IATA Cargo achievements in 2010
e-commerce
efficiency
Cargo security
propositions
Industry standards
best practices
But……
4
Will it continue?
Security
5
Will it continue?
Economic challenges
6
Will it continue?
Unforeseen events
7
Will it continue?
8
Moving forward…
9
Keynote: IATA State of the
Industry
Giovanni Bisignani, Director General & Chief
Executive Officer, IATA
Giovanni Bisignani
Istanbul, March 2011
any number
that was not
red was
a major
achievement
Our outlook for 2011:
Our outlook for 2011:
As oil prices rise
profits will fall
Assuming an average
oil price of $96 p.b.
Profits will
plummet 46%
To $8.6 billion
A pathetic
1.4% margin
It could have
been much
worse
The global
economy
continues
to improve
GDP growth
forecasts have been
upgraded to 3.1%
We expect cargo
to grow 6.1% to
46.2 million freight
tonnes
We see yields
improving by 1.9%
There are risks even
to this weak forecast
With a 1.4%
margin there
is no buffer to
withstand a shock
We must shore up the
competitiveness
of this industry
IATA is playing
a role
We are keeping
your money safe
Our financial
systems settle
$300+ billion p.a.
2010: CASS
handled $29 billion
With a success
rate of 99.994%
Another important IATA role
is to improve competitiveness
Since 2004 IATA achieved
over $55 billion in savings
$15.9 billion
savings: new
routes and more
fuel efficient
operations
$2.5 billion:
operational costs
$19.1 billion:
infrastructure
user charges
$17.6 billion:
Simplifying the
Business
These successes were team
efforts that benefitted
the entire industry
Safety
Safety is our #1 priority
…and we are
delivering results
Hull loss rate for 2010
was the lowest in
aviation history
1 accident for every
1.6 million flights
IATA carriers out-
performed the
industry
IATA carriers:
1 accident for every
4 million flights
The IATA
Operational
Safety Audit
(IOSA) has
played a
big role
All IATA carriers
have met its 967
standards and
recommended
practices
And are on the
IOSA registry
IATA Safety Audit for Ground
Operations (ISAGO) sets a
global standard
IATA Safety Audit for Ground
Operations (ISAGO) sets a
global standard
Individual sellers
are not professional
shippers
They do not
know their
responsibilities
They have listened
to our concerns
But have not taken
any action
Our other top priority
is security
There remains
a real threat
With collaboration
government intelligence
is a critical and effective
component of our defenses
I congratulate governments
On working with industry to deliver an
effective and targeted response
The relationship
with Secretary
Napolitano of the
DHS is driving
positive change
Industry and all
governments must
work together to
secure air cargo
The reality
Saying ‘no’ or
‘impossible’ only
excludes us from
the debate
To engage
governments
With our
knowledge,
expertise and
solutions
IATA will be co-sponsoring
a paper at ICAO
Effective cargo security
must be based on a
combination of 3 measures
1 We must take a
supply chain
approach
A layered
approach
Secure Freight initiative
A template for industry and governments
To work together in countries where
such programs don’t exist
2010: a pilot in Malaysia
Adopting Secure Freight in 2 other
countries a target by end 2011
The UAE will be one of those countries
Secure Freight
Should be driven by government and
industry co-operation
On investment, processes, technology
and risk assessment
2 We need governments to
certify better screening
technology
We do not advocate
100% screening
We need the
technology to
screen pallets and
oversize items
Governments must
co-operate on
mutual recognition
of standards
3 We must make better use
of electronic information
Governments must understand
e-freight’s capabilities
e-freight
20 documents we have
converted to electronic
format
Give a clear picture of
who is shipping what
and where
E-freight message standards:
a security declaration
A clear picture of
who has screened
what and where
The catalyst for
more extensive
use of e-freight
Including outbound
processing and
risk assessment
IATA Board of Governors has
given us clear targets
10% e-freight
volumes by the
end of this year
By 2015 the goal
is 100%
We began e-freight
in 2004
We achieved 100%
e-ticketing in
48 months
E-freight by the
end of 2010
We had countries
representing 80%
capability
But only 2.8%
penetration
Most governments
have now implemented
legislation
To recognize
electronic
documentation
Thailand, Indonesia,
Russia and Vietnam
still need to ratify
the Montreal
Convention 99
The $4.9 billion
savings that
100% e-freight
will bring
The $4.9 billion
savings that
100% e-freight
will bring
…are critical
to making this
a sustainable
business
If we can be faster
and cheaper
If we can be faster
and cheaper
…now it is up
to all of us
Shippers should
demand e-freight
convenience and
quality
Governments must
make e-freight a
customs and
intelligence
requirement
Freight forwarders
and airlines should
target the cost
savings and service
efficiency in their
business plans
Developed
our industry’s
first quality
standards
My vision:
evolve to
global
quality
standards
by end-2011
Cargo is
Cargo is a competitive industry
98% goes by sea, 2% by air
We handle the high value goods – 35%
If our 2% volume increased by just 1%?
The only way
to do it
…is by improving
competitiveness
Customers paying a premium
Demand quality
Customers paying a premium
Demand quality
They want to know that their shipments
are on time
…if not?
“What a
mess”
The inspirational
leadership of
Singapore’s
Minister Mentor
Lee Kuan Yew
Catch-up on using
technology
Improve safety
and security
Implement quality
standards
Success will
only come with
collaboration
This symposium
must not just be
a talking shop
We need
actions and
commitments
I will hand over to
Tony Tyler
CEO, Cathy Pacific
IATA will continue
to strengthen its role
IATA will continue
to strengthen its role
as a catalyst bringing industry
and government together
Connecting
the world
Safely, securely,
efficiently, with
high quality
standards
Giovanni Bisignani
Istanbul, March 2011
133
Turkish Airlines Historical Analysis
Turkish Cargo
134
Historical Analysis (Passenger)
40,000
30,000 29,100
25,102
25,000
22,597
19,636
20,000
16,946
15,000 14,134
12,031 11,991
10,26610,50410,410 10,27710,38310,420
10,000 8,599 9,281
7,274
6,099
4,688
5,000 3,307
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
F
Historical Analysis (Operating Profit)
800
389
400
255 247
200
100
52 70 60
23
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
5,000
Net Sales (m USD)
4,000
3,000
2,000
1,000
0
1991
2003
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2004
2005
2006
2007
2008
2009
2010
2011
Turkish Airlines Historical Analysis
Turkish Cargo
138
Our Destinations
200
41
150
37
40 New Routes 2011-
28 32 33 2010
100 34 28 26 28 28
27 Los Angeles
132 144
50 103 107 109 119 Guanzou
78 76 77 76 75 79 Şiraz
Malaga
0 Thessaloniki
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 F Manila
Int Dom Naples
Turin
Toulouse
Genoa
Valencia
Najaf
Mosul
Novosibirsk
Destinations
Planned
Codeshare 8.
Scheduled In Global Rankings
Will start in 2011
141
Connection via Istanbul
YTO
IAD
66 %
Right at the intersection of the industry’s major activity. Among intercontinental traffic
66 % of the passengers travel
Unique hub in Istanbul being able to connect in Europe in East - West Corridore
– Asia – Africa – Middle East corridore.
142
Turkish Airlines Historical Analysis
Turkish Cargo
143
Turkish Cargo – FTK (2002-2010)
138 %
International Cargo
FTK (Billion)
300 18,000
16,000 Freight Tonne Km
Turkish Airlines FTK (INT)
250 increase to 32 %
144
Turkish Cargo (2002-2010)
624%
Transit cargo shipments
increase to 624%
(2002-2010)
39,5%
Last year, transit cargo
shipments increase to 39,5 %.
145
Turkish Cargo – Transit (2002-2010)
60%
TRANSIT Cargo in TOTAL (INT)
51% 52%
50%
37% 39%
40%
28% 28% 30%
30% 23%
20%
10%
0%
2002 2003 2004 2005 2006 2007 2008 2010
146
Turkish Cargo in Europe
Total Cargo Carried (in tons)
Domesticİç HatInternational
Dış Hat
273,900
198,700 32 %
161,200 Last year, cargo shipments
145,200
126,500
increase to 32 %.
114,600
9 7 7
9.th carrier of Europe in 7. Rank in Europe in 7. Rank in Europe in
terms of total cargo terms of growth in ATK’ terms of growth in RTK
carried by 15,7 % by 23,2 %
*ATK: CapacityTon Km *RTK: Revenue Ton Km
147
Thank You.
March 2011
148
Networking Coffee Break
Sponsored by:
149
Keynote: Economic Overview
for the Air Cargo Industry
Brian Pearce, Chief Economist, IATA
The outlook: trends,
opportunities and threats
March 2011
Brian Pearce
www.iata.org/economics
6%
4%
2%
0%
-2%
-4%
1
1
Q
Q
09
10
00
01
02
03
04
05
06
07
08
20
20
20
20
20
20
20
20
20
20
20
Source: US BTS
Weighted Score (50 = No Change)
100
0
10
20
30
40
50
60
70
80
90
Mar 2006
Sep 2006
Apr 2007
Oct 2007
Apr 2008
Last Three Months
Oct 2008
Next Twelve Months
Apr 2009
Oct 2009
Apr 2010
Oct 2010
Source: IATA
Airline CFOs becoming cautious in January
Heads of cargo confidence losing altitude
IATA survey of heads of cargo
Source: IATA Survey
100 Volumes - next 12 months
90
80
Weighted Score
70
60
50
40 Yields - next 12
30 months
20
10
0
Mar 2006
Sep 2006
Apr 2007
Apr 2008
Apr 2009
Apr 2010
Oct 2007
Oct 2008
Oct 2009
Oct 2010
Source: IATA
Travel markets strong trend but cargo?
International air freight and passenger volumes
seasonally adjusted
260 14
RPK
240 13
RPK, billions
FTK, billions
220 FTK 12
200 11
180 10
160 9
2005 2006 2007 2008 2009 2010 2011
Source: IATA
Coincident indicators have slowed sharply
Semi-Conductor Shipments and Air Freight
Source: IATA, SIA 38
54 34
46 30
26
22
30 18
22 14
Shipments
10
14 6
6 2
-2
-2
-6
-10 -10
-18 International FTKs -14
-18
-26 Semi-Conductor Shipments
-22
-34 -26
- 03 -03 -04 -04 -05 -05 -06 -06 -07 -07 -08 -08 -09 -09 -10 -10
n c n c n c n c n c n c n c n c
J u De Ju De Ju De Ju De Ju De Ju De J u De Ju De
17
1.4
15
FTKs (billion)
14
1.2 13
12
11
1
FTKs 10
0.8 8
00
01
02
03
04
05
06
07
08
09
10
11
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Source: IATA, Haver
World trade rising rapidly once more
160
11 130
120
10
World goods trade 110
9 volumes
(right scale) 100
8 90
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
50
Japan business 10
Net balance intending to increase
investment
10
0
-10
-5
-30 UK business
(left scale)
-10
-50
-70 -15
Q1-2004 Q1-2005 Q1-2006 Q1-2007 Q1-2008 Q1-2009 Q1-2010 Q1-2011
Source: Haver
Mixed picture for the consumer
Consumer confidence
Source: Haver Analytics
120 0
China
100 -5
-10
80
US -15
60
-20
40
-25
20 Europe -30
(right scale)
0 -35
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Source: Haver
Leading indicators very positive
Purchasing Managers confidence survey and Air Freight Demand
Source: IATA, JP Morgan
70 38
34
International FTKs
65 30
PMI Value (50 = No-Change)
Ap 7
Ap 8
Ap 9
Ap 0
11
O 5
Ju 6
O 06
Ju 7
O 07
Ju 8
O 08
Ju 9
O 09
Ju 0
O 10
Ja 05
Ja 06
Ja 07
Ja 08
Ja 09
Ja 10
0
l-0
r-0
0
r-0
0
r-0
0
r-0
1
r-1
n-
n-
n-
n-
n-
n-
l-
l-
l-
l-
l-
-
-
ct
ct
ct
ct
ct
ct
Ju
15
60
10
Business
5 confidence 55
% change over year
Confidence index
0
50
-5
45
-10
-15 Premium 40
travel growth
-20
35
-25
-30 30
2006 2007 2008 2009 2010
Source: IATA
Rising oil price is the major threat this year
Jet Fuel and Crude Oil Price ($/barrel)
200
180
160
140
120
Jet fuel price
100 Futures
curve
80
60
20
Jan03 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11
140
Dollars per barrel (2009)
60
40
20
0
1980 1990 2000 2010 2020 2030 2035
150
800
130
Passenger fare 750
110 (right scale)
700
90
650
70
50 600
30 550
2006 2007 2008 2009 2010 2011
Source: IATA
Cargo yields little better than stable
Air Freight Yields (US$ per kilo)
Seasonally Adjusted
Source: IATA CASS
2.0 4.0
3.6
1.6 3.2
2.8
1.2 2.4
2.0
0.8 1.6
SE Asia-Europe
SE Asia-Europe (incl other charges)
1.2
0.4 Global - LHS 0.8
Global (incl other charges) - LHS 0.4
0.0 0.0
7
0
Ja 7
Ja 8
Ja 9
0
A 7
O 7
A 8
O 8
A 9
O 9
A 0
O 0
-0
-0
-0
-1
-0
-0
-0
-1
0
l-0
l-0
l-0
l-1
n-
n-
n-
n-
pr
pr
pr
pr
ct
ct
ct
ct
Ju
Ju
Ju
Ju
Ja
Source: IATA
Load factors sliding as capacity expands
Loads factors on international passenger and freight markets
58% 80%
77%
52% Freight
(left scale) 76%
% AFTKs
% ASKs
50%
75%
48%
74%
46%
73%
44% 72%
42% 71%
40% 70%
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Source: IATA
Plenty of wide-body capacity arriving
Asia Pacific
200
150
100
50
0
2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Ascend
Europe’s economic situation remains grim
10-year government bond yields, %
14
12
Greece
10
8
Ireland
Portugal
6
Spain
4 Italy
UK
2 US
Germany
0
97 98 99 00 01 02 03 04 05 06 07 08 09 10
Source: Haver
But optimism over ‘emerging’ markets
Forecasts for GDP growth
Source: EIU
9
8 2010 2011
7
% change over year
0
US Japan Europe ASPAC excl Middle East Latin World
Japan North Africa America
Source: EIU
Fuel prices will squeeze airline profitability
Global commercial airline profitability
8.0 20
6.0 15
EBIT margin
4.0 (left scale) 10
% revenues
2.0 5
US$ billion
0.0 0
-2.0 -5
-8.0 -20
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010E
2011F
Source: IATA
Panel: Air Cargo – Connecting the World
Moderator: Aaron Heslehurst, News Anchor & Presenter BBC World
2. Airline 33%
3. Customs 2%
4. Forwarder 8%
5. GHA 11%
6. Shipper 3%
7. Supplier 10%
8. Other 25%
John Batten
Executive Vice President Global Cargo
Swissport International Ltd
174
Air Cargo – Connecting the World
Key industry challenges in 2011
Security harmonization
Skills/Training
e-freight adoption
175
Air Cargo – Connecting the World
Jean-Claude DELEN
President
FIATA
176
Air Cargo – Connecting the World
Key industry challenges in 2011
Security measures harmonisation and mutual recognition of
regulated agents programmes
e-Commerce
177
Air Cargo – Connecting the World
Ram Menen
Cargo Committee Chairman &
Divisional Senior Vice President Cargo
Emirates
178
Air Cargo – Connecting the World
Key industry challenges in 2011
179
Air Cargo – Connecting the World
Sergio Mujica
Deputy Secretary General
World Customs Organization
180
Air Cargo – Connecting the World
Key industry challenges in 2011
Commitment and Leadership with Regard to Air Cargo Security.
Partnership with Border Agencies (National Level) and Relevant
International Organizations.
Provision of Accurate and Timely Advance Data Required for Risk
Assessments.
Participation in Trusted Operator Programmes: Authorized
Economic Operator/Regulated Agent/Known Consignor.
Capacity Building: Must Include All Links in the Chain.
181
Air Cargo – Connecting the World
Chris Welsh
Secretary General
Global Shippers’ Forum
and
General Manager Global & European Policy
Freight Transport Association (UK)
182
Air Cargo-Connecting the World
Global Shippers’ Forum
Four Priorities
World wide accredited quality service standards implemented
5. Taxation 1%
6. Modal switch 3%
7. Other 2%
3. Customs harmonization 7%
8. Skills/Training 8%
9. Other 4%
Do you believe WCS is the event where you can
influence the Air Cargo Industry?
1. Yes 65%
2. No 35%
1. High 51%
2. Medium 36%
3. Low 12%
190