Airlines “beyond frustrated” due to supply chain issues: IATA DG

Willie Walsh, Director General of the International Air Transport Association (IATA), speaks during IATA annual meeting in Istanbul, Turkey June 5, 2023.
| Photo Credit: REUTERS

Airlines globally were “beyond frustrated” due to supply-chain issues, said Willie Walsh, the Director General of the International Air Transport Association at its annual general meeting.

The issue has severely impacted Indian airlines who among them have nearly 100 aircraft grounded, or one in seven aircraft in India, due to delays of spares and engines. This compelled Go First to seek insolvency and resulted in hike in airfares because of the effect on capacity.

“OEM suppliers have been far too slow in dealing with supply chain blockages that are both raising costs and limiting our ability to deploy aircraft. Airlines are beyond frustrated. A solution must be found,” Mr. Willie Walsh said in his address on Monday in Istanbul.

Also read | Govt. wants airlines to self-monitor airfares on routes served by Go First

He also reprimanded airports globally for their “bad behavior” for raising tariffs for airlines.

“Schiphol Airport has no shame. After a self-made operational disaster in 2022 the airport continues its three-year 37% charges hike—with 12% this year. In South Africa, airports want a 38% charges increase, only to be outdone by ATC demands for a 63% hike,” Mr. Walsh cited some examples on airport tariffs.

Despite these factors accompanied by the rise in fuel costs with “crack spread for jet fuel at historic highs for most of 2022 until April this year”, it was “truly impressive” that airlines were turning a profit.

“Airlines are en route to a profitable, safe, efficient, and sustainable future,” he said, while sharing that passenger traffic was at 90% of pre Covid-levels and forecasting $9.8 billion in net profit this year for the global airline industry. However, profit margins continued to be “wafer thin” as airlines will earn an average profit of $2.25 per passenger. “The value retained by airlines for the average plane trip won’t even buy a subway ticket in NYC,” he said in what is likely to indicate that high airfares are here to stay.

[The reporter is in Istanbul on the invitation of IATA]