Airlines call for passenger compensation 'burden' to be shared with suppliers
Gary NoakesThe world’s airlines are beating profit forecasts, but should not be burdened by consumer protection rules that penalise them unfairly, Iata has said.
Iata has upgraded global airline profit forecasts, but said airlines were often penalised for delays that were not their fault and urged others involved to share compensation costs.
The association said it now expected industry net profits in 2023 to reach $9.8 billion, “more than double the previous forecast of $4.7 billion” made in December. Total revenues are expected to reach $803 billion, close to the 2019 total of $838 billion. However, the latest figure represents a net profit margin of only 1.2%.
A total of 4.35 billion people are expected to fly in 2023, close to the 4.54 billion who flew in 2019. Iata director general Willie Walsh said airline financial performance in 2023 was "beating expectations".
“Stronger profitability is supported by several positive developments," said Walsh. "China lifted Covid-19 restrictions earlier in the year than anticipated. Cargo revenues remain above pre-pandemic levels even though volumes have not. And, on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year.”
Iata called for a shake-up of consumer protection rules to “address shared responsibilities”. The association said the burden of care fell on airlines “regardless of which part of the aviation chain is at fault”.
Walsh called for “shared accountability”. He said: “The aim of any passenger rights regulation surely should be to drive better service. So it makes little sense that airlines are singled out to pay compensation for delays and cancellations that have a broad range of root causes, including air traffic control failures, strikes by non-airline workers, and inefficient infrastructure.”
Iata also called for the UK to take advantage of Brexit and reform EU261 compensation rules. “Proper reform of ‘UK 261’ provides a gilt-edged opportunity for a genuine ‘Brexit dividend’ which the present pro-Brexit government should not ignore,” it said.
Walsh added: “With more governments introducing or strengthening passenger rights regulations, the situation is no longer sustainable for airlines. And it has little benefit for passengers because it does not encourage all parts of the aviation system to maximise customer service. On top of this, as costs need to be recouped from passengers, they end up funding this system.”
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