Airline fuel efficiency up 1.5 pct saves US$3.7 billion: IATA

GENEVA: Fuel efficiency in terms of capacity use per available tonne per kilometres (ATK) is expected to improve by 1.5 per cent or US$3.7 billion of fuel saving in 2019 as deliveries of new aircraft grow and fuel prices rise sharply.

The International Air Transport Association (IATA) chief economist Brian Pearce said continued fuel efficiency gains have partially decoupled carbon emission from expanding air transport services.

“Fuel is such a large cost that focuses intense effort in the aviation industry to improve fuel efficiency through replacing fleet with new aircraft, better operations and efforts to persuade governments to improve the airspace and airport inefficiency that waste around five per cent of fuel burn each year,” he said.

He said without the expected fuel efficiency gain this year, fuel burn and carbon emission would be 1.5 per cent higher in 2019.

“This represents saving over 16 million tonnes of carbon, as well as saving on fuel that would have cost the industry and its consumers an additional US$3.7 billion,” he said.

IATA forecast the airlines fuel bill will rise to US$200 billion in 2019, representing 24.2 per cent of average operating costs.

He said airlines also expected to continue hiring over the next 12 months, as capacity and traffic would grow strongly, although the pace of expansion is slower than in 2017.

“We estimate the total employment by airlines will exceed 2.9 million in 2019, a gain of 2.2 per cent compared to 2018.

“Productivity is likely to slow a little with the average employee generating just over 530,000 ATKs a year, which is a 2.9 per cent improvement over this year,” he said.

However, he said labour cost are now rising significantly with an expected average increase of 2.1 per cent in 2019.

According to IATA economic year-end 2018 report of the airline industry, airlines and customers are forecast to generate US$136 billion in tax revenues in 2019.

This is equivalent of 44 per cent of the industry’s gross value added paid to the governments in payroll, social security, corporate and product taxes.

It revealed that air transport is vital for manufacturers trade, particularly in components – the major part of the current cross border trade.

“We forecast the value of international trade shipped by air next year will be US$7 trillion, while tourists travelling by air in 2019 to spend about US$908 billion,” it added.

However, the aviation commercial activities remain highly constrained by bilateral and other regulations, leading to unnecessary high costs such as visa requirements.

Source: NST