The appointment comes at a time when the aviation industry is adversely impacted by the covid-19 pandemic, which has dented demand amid travel restrictions by certain countries
The International Air Transport Association (IATA) announced that Willie Walsh has officially taken on the role of Director-General of the organization. He succeeds Alexandre de Juniac.
“I am passionate about our industry and about the critical work that IATA does on behalf of its members, never more so than during the COVID-19 crisis. IATA has been at the forefront of efforts to restart global connectivity, including developing the IATA Travel Pass. Less visible but of equal importance, airlines continue to rely on IATA’s financial settlement systems, Timatic, and other vital services to support their day-to-day operations.
I am grateful to Alexandre for leaving behind a strong organization and a motivated team. Together, the IATA team is absolutely focused on restoring the freedom of movement that airlines provide to billions of people around the world. That means your freedom to visit friends and family, to meet critical business partners, to secure and retain vital contracts, and to explore our wonderful planet,” said Walsh.
“In normal times over four billion travelers depend on aviation each year and the distribution of vaccines has put the value of efficient air cargo in the spotlight. Airlines are committed to delivering safe, efficient, and sustainable services. My goal is to ensure that IATA is a forceful voice supporting the success of global air transport. We will work with supporters and critics alike to deliver on our commitments to the environmentally sustainable airline industry. It’s my job to make sure that governments, which rely on the economic and social benefits our industry generates, also understand the policies we need to deliver those benefits,” said Walsh.
Walsh was confirmed as IATA’s 8th Director-General by the 76th IATA Annual General Meeting on 24 November 2020. He joins IATA after a 40-year career in the airline industry. Walsh retired from the International Airlines Group (IAG) in September 2020 after serving as its CEO since its inception in 2011. Prior to that, he was CEO of British Airways (2005-2011) and CEO of Aer Lingus (2001-2005). He began his career in aviation at Aer Lingus in 1979 as a cadet pilot.
Walsh is deeply familiar with IATA, having served on the IATA Board of Governors for almost 13 years between 2005 to 2018, including serving as Chair (2016-2017). He will work from the Association’s Executive Office in Geneva, Switzerland.
WHAT ARE THE IATA PRIORITIES?
IATA’s messaging around its AGM has been consistent: the industry remains in crisis, states must support the reopening of markets and systematic testing is the safest way to achieve this.
While recent positive news around the efficiency of potential vaccines has given a more encouraging backdrop to hopes for a way out of the crisis than seemed likely just a couple of weeks ago, IATA executives have reiterated the view that states cannot wait for vaccines, given they are unlikely to become widely available until the second half of 2021 – and potentially much later for some regions.
Even when vaccines are available, testing will be required to keep markets open, IATA argues.
Against this backdrop, IATA now projects the industry will lose $157 billion over this and next year. This all but wipes out the profits the industry made over the previous five years – by a distance the most sustained period of airline profitability in its history.
States have already helped out with an unprecedented level of financial support. But IATA estimates airlines could require up to $80 billion before they return to a cash-positive situation a year from now.
If under de Juniac IATA has asked governments to step up during the crisis like never before, there will be no let-up under Walsh, his acceptance speech leaving little doubt where he sees the blame for the aborted restart of international services.
“They [people] have been denied the freedom we provide, not by a virus, but by a disjointed political response and the restrictions put in place by certain Governments who have failed to adapt and to adopt the sensible measures that would have allowed almost normal air services to continue,” he says.
”We need more than ever an effective industry body to serve and represent our interests.”
John Strickland, from JLS Consulting, says that IATA needs to get its message over to the world’s governments and regulators like never before. “Willie will likely look to sharpen IATA’s teeth on this, given he is recognized for his pull-no-punches, straight style of communication, and leadership,” he says.
”He can apply to IATA the same principles of business management which made IAG… such a successful airline group and apply these to the greater good of the industry when it faces the immense challenge of recovery post the Covid pandemic crisis.”
Beyond the immediate crisis, Strickland expects Walsh to even more strongly push the environmental agenda at IATA. Notably, under Walsh’s watch, IAG became the first major airline group to set out its net-zero ambitions in October last year.
Strickland also suggests Walsh could look to “broaden IATA’s church” by more closely embracing low-cost carriers – an area where IATA still lacks some of the biggest budget operators as members – and highlights his rapport with Ryanair chief Michael O’Leary.
Notably, Walsh worked closely with the leaders of EasyJet and Ryanair in establishing Airlines for Europe (A4E) as an alternative to the Association of European Airlines (AEA) – IAG carriers British Airways and Iberia were among the first to quit AEA in 2015 – with the aim of shifting more focus on to lobbying on the key issues network and low-cost carriers had in common.
At the launch of A4E, Walsh promised ”a very loud, very clear, very persistent voice representing airlines in Europe”.
States and governments around the world should probably expect something similar when Walsh takes up his IATA role.
HOW IATA HAS CHANGED ITS VOICE
Walsh will become the eighth leader of IATA, after his nomination to succeed Alexandre de Juniac as director-general was formally approved at the IATA AGM on 24 November. He will take up the role from April next year.
| Director-General | From | To |
|---|---|---|
| Willie Walsh | 2021 | |
| Alexandre de Juniac | 2016 | 2021 |
| Tony Tyler | 2011 | 2016 |
| Giovanni Bisignani | 2002 | 2011 |
| Pierre Jean Jeanniot | 1993 | 2002 |
| Gunter Eser | 1985 | 1992 |
| Knut Hammarskjöld | 1966 | 1985 |
| William Hildred | 1946 | 1966 |
| Source: IATA, Walsh to take over April 2021 |
HOW IATA HAS CHANGED ITS VOICE
Walsh will become the eighth leader of IATA, after his nomination to succeed Alexandre de Juniac as director general was formally approved at the IATA AGM on 24 November. He will take up the role from April next year.
| Director General | From | To |
|---|---|---|
| Willie Walsh | 2021 | |
| Alexandre de Juniac | 2016 | 2021 |
| Tony Tyler | 2011 | 2016 |
| Giovanni Bisignani | 2002 | 2011 |
| Pierre Jean Jeanniot | 1993 | 2002 |
| Gunter Eser | 1985 | 1992 |
| Knut Hammarskjöld | 1966 | 1985 |
| William Hildred | 1946 | 1966 |
| Source: IATA, Walsh to take over April 2021 |
Is COVID Fatigue Dampening Air Cargo’s Recovery?
The New Year recovery in global air cargo volumes stalled in March as volumes fell -3% versus comparative data for March 2019, but reduced airline capacity levels saw the ‘dynamic load factor and prices remain ‘relentlessly high,’ according to the latest market data from industry analysts CLIVE Data Services and TAC Index.
To give a meaningful perspective of the air cargo industry’s performance, CLIVE Data Services’ first-to-market data is continuing to focus on comparing the current state of the market to pre-Covid 2019 volume, capacity, and load factor data until at least Q3 of this year. This is being produced alongside the 2020 comparison.
For the four full weeks of March 2021, global volumes were unable to continue the recovery seen in January and February, relative to the same month of 2019. The -3% trend in demand for these weeks also worsened towards the end of the month, reaching -4% relative to the start of the month. Nonetheless, the air cargo market is in far better shape than a year ago when the outbreak of the Covid pandemic led to a sudden collapse in a global capacity. For context, March 2021 volumes were 29% up over March 2020, peaking at +55% in the last two weeks.
However, with airline cargo capacity down -14% versus 2019, CLIVE Data Services’ dynamic load factor – which considers volume and weight perspectives of cargo flown and capacity available – remained relentlessly high: 73% for the period, 7% points higher than in 2019. This decline in capacity relative to 2019 should be seen, however, in the context of passenger airlines starting their busier traditional summer schedules in March 2019 – which is obviously not the case this time around.
Niall van de Wouw, Managing Director of CLIVE Data Services, commented: “March data shows us the market is still very supply-driven. After indicators that the global air cargo market was seeing some ‘light at the end of the tunnel’ in January and February after a year of such high disruption, this latest industry data will reign in that optimism slightly. This may reflect Covid-19 fatigue in the buying habits of businesses and consumers as we see more reports of infection rates creeping up again in many countries, fears of a possible third wave of the virus, more lockdowns, and curfews, and concerns over both the supply and effectiveness of vaccines.
Flights are very full from a cargo point of view, but with no recovery in the passenger market, airline intercontinental operations are still mainly cargo-driven and they need higher prices to make these operations financially viable.”On the Atlantic, CLIVE reports record load factors in both directions, reaching 90% westbound for the last two weeks of March.
On eastbound sectors, for example, the Chicago (ORD) to Western Europe route reached levels of 80% earlier in the month, the tipping point at which prices often increase exponentially. In this market, they went up by around 25% during this timeframe, even though the load factor increased by ‘just’ 5% points. ‘And the prices came down just as fast again when the load factor dropped below this tipping point,’ CLIVE stated.
Comparing the current China-to-Europe trade lane to 2019 shows a similar pattern at a global level. The push forward in this market seems to be decelerating. Volumes in the second week of March were 7% higher than in 2019 but then dropped to 6% and 4% in the following weeks. But data shows westbound flights from China still filled to the brim with a ‘dynamic load factor for the month of 93%. Analyses by TAC Index continue to confirm the impact of high load factors on airfreight pricing. China and Hong Kong-Europe pricing for the last three years reveal an increase of 30% and 17% respectively year-on-year, or a rise of over 50% versus 2019.
- March 2019 – USD 2.70/kg
- March 2020 – USD 3.51/kg
- March 2021 – USD 4.09/kg
A comparison of London Heathrow (LHR)-North America airfreight prices for March over February shows an increase of GPB 0.28/kg or 8% in average pricing. Comparing March 2020 over March 2021, the average price rose by EUR 2.13/kg. The highest price in March 2021 of GPB 4.04 (week 4/2021) represented an increase of nearly 45%.
TAC Index says the increase comparing the first weeks of March 2021 to the same period of March 2019 shows an even more dramatic pricing increase of close to 400%, climbing from GBP 0.93 in 2019 to GBP 3.7 in this latest reporting period.“Pricing in March and February did not show big volatility month-over-month and, also, the intra-month volatility was not as big as in previous periods.
Whether this can now be viewed as a relatively stable situation on a much higher level than in 2019 remains to be seen. It is definitely interesting to note that pricing on all lanes discussed here are higher than at the end of March 2020 when the PPE impact kicked in,” stated Robert Frei, Business Development Director at TAC Index.
