Iata has welcomed the commitment of G-20 finance ministers to deliver a “strong and co-ordinated international response” to address the renewed challenges facing the global economy.
The world airline body urged speedy follow-up given worsening economic conditions, particularly in Europe.
The commitment of the G-20 came as US treasury secretary Tim Geithner warned that Europe’s sovereign debt and banking crisis was the “most serious risk now confronting the global economy” and as International Monetary Fund managing director Christine Lagarde called on Europe “to do whatever it takes” to support the weaker members of the European Union.
Iata chief executive and director general Tony Tyler said: “We can clearly see a worsening trend in the aviation sector with profitability due to slump to $4.9 billion in 2012 which is a razor thin margin of just 0.8%. The economic uncertainty centered on Europe is the biggest downside risk that we face.
“It is critical that governments find solutions to stabilise the situation and stimulate growth. We welcome the commitment of the G-20 finance ministers and look forward to quick follow-up action.”
He warned: “The European industry rests on a knife edge. Any worsening of the debt and banking crisis could plunge it into deep losses for 2012.
“As European governments look for a way forward it is important that they avoid any additional taxation on the industry to preserve its ability to catalyze economic growth.”
Iata argues that Europe is already disadvantaged by high taxes – including the £2.5 billion UK Air Passenger Duty which is the biggest aviation tax in the world and recently introduced departure taxes in Germany and Austria which combined collect more than €1 billion.
Europe will be introducing a further $1.2 billion burden in 2012 with the inclusion of international aviation in its “misguided and seriously flawed” emissions trading scheme – the weight of which will be primarily borne by Europe’s carriers.
“Europe’s policy-makers must focus on aviation as a catalyst for economic growth,” added Tyler.
“If there are stimulus monies available aviation provides positive opportunities. Investments to support the development of sustainable biofuels and accelerate progress on the Single European Sky would leave Europe with a more efficient air transport sector, a greener economy and sustainable jobs generation.”