Focus should be on “building resilience” in the whole ecosystem, says the trade body.
IATA will “keep insisting” on finding efficiencies on costs related to passenger taxes and airport charges, in order to help the airline industry build its resilience against the higher fuel costs ushered in by the Middle East crisis.
Speaking at a regional media briefing during the IATA AGM in Rio de Janeiro on 6 June, the industry body’s vice-president for Europe, Rafael Schvartzman, said that “as jet fuel prices rise, it is even more crucial that airport charges do not run out of control”. He also singled out France and the Netherlands for introducing increased ticket taxes at a time when the industry faces sky high fuel costs.
“The Iran war crisis is a reminder that airlines face extraordinary events for which they should not be penalised,” says Schvartzman.
Responding to a question from FlightGlobal on how concerned IATA is about a recent warning from the European Commission that jet fuel supplies in the bloc could become increasingly tight if the situation in the Middle East does not improve in the coming weeks – and what contingency plans the industry is putting in place in case the crisis drags on – Schvartzman emphasises the need to focus on bringing down costs elsewhere in the ecosystem.
“If today you have a much higher cost base with fuel then you need to find efficiencies elsewhere,” he says. “That’s when we talk about taxes, charges and ATM efficiency, so that the whole ecosystem is building resilience.”
Schvartzman notes that airlines have “proven to be quite resilient” in their response to the crisis so far, through their ability to cut flights and redeploy capacity elsewhere.
“We will see what happens after the summer – some airlines are better prepared on hedging, some less so. But we will keep insisting on the need to look at the resilience of the whole ecosystem,” he says.
Flight bookings for May and June have been “flat” in Europe, says Schvartzman, but “demand is strong enough for Europe to expect a busy summer”. He points to a tendency for European travellers to stay “closer to home” in the June to September period, with growth seen in intra-European services.
In addition to taxes and airport charges, the European Union’s Entry/Exit System (EES) also drew criticism from Schvartzman. He says that airline passengers are “seeing too many delays” as the system is being rolled out, noting that “without action, problems will worsen”. IATA wants to see EES checks suspended if airport queues become too long over the summer.
The post IATA sees more urgent need to cut taxes and charges in Europe as higher fuel costs continue to batter airlines first appeared on FlightGlobal.