Airlines need to be properly rewarded, says IATA chief amid supply chain woes
Bangkok (PTI): With supply chain woes continuing to impact aircraft deliveries, IATA chief Willie Walsh on Saturday said airlines need to be properly rewarded as he flagged concerns about talks of original equipment manufacturers planning to increase prices due to tariffs and other issues.
The International Airport Transport Association (IATA) represents nearly 350 airlines that account for around 85 per cent of the global air traffic.
Speaking at the 69th Assembly of Presidents of the Association of Asia Pacific Airlines (AAPA) here, IATA Director General Willie Walsh said there was huge frustration that the supply chain issues are not getting much better.
While airlines are a low margin industry, he said the margins of OEMs (Original Equipment Manufacturers) are high.
Taking examples, Walsh said engine makers are actually improving their financial performance during a period of massive disruption which has added massive costs to the airline industry.
Walsh pointed out that it is bothering when he hears suppliers talking about that they want to increase prices because of tariffs and other supply chain issues.
"There's got to be a correction to this. Airlines need to be properly rewarded. I don't object to anybody making profits....
"But we've got to see a greater balance and we need to see these critical suppliers raising their game and raising their game significantly to ensure that they're serving the industry in the way that we need to be served," he said.
The global aviation industry has been grappling with supply chain issues, especially after the pandemic, resulting in delayed aircraft deliveries even as airlines are looking to expand their fleets to meet rising passenger traffic demand.
At the Assembly, AAPA Director General Subhas Menon said tariffs will impact the nascent recovery of the supply chain and also increase non-fuel cost for the airlines.
"Supply chain recovery is now undermined by tariffs which increase supplier costs. While aircraft and engines are exempt, their raw materials, and components which come from many parts of the world, are not.
"Tariffs also affect demand through inflation. It is a double whammy as both supply, and demand sides of the market are affected," Menon said even as he added that air transport demand is buoyant.
Mentioning about sustainability, Menon emphasised that taxing airlines directly or indirectly through mandates has not worked and that Sustainable Aviation Fuel (SAF) production remains low.
A study, done by IATA in collaboration with consulting firm Oliver Wyman, said supply chain challenges are estimated to cost more than USD 11 billion for the global airlines industry in 2025.
The worldwide commercial aircraft backlog was more than 17,000 aircraft last year, higher than 2010-2019 period when the backlog stood at 13,000 planes per year.
The slow pace of production is projected to cost the airlines industry over USD 11 billion this year, mainly due to excess fuel, additional maintenance, increased engine leasing and surplus inventory holding costs, as per the study released in October.
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Inappropriate for MLAs seeking free IPL tickets, says D.K. Suresh
Bengaluru: Bengaluru Milk Union Ltd President D.K. Suresh on Monday said it is inappropriate for MLAs to seek free IPL tickets, adding that those interested in watching matches should pay for them personally.
Speaking to reporters near his residence in Sadashivanagar, he said, “IPL is a commercial tournament and does not represent the country. It is not right for public representatives to focus too much on such matters.”
Referring to the recent controversy during the RCB celebrations, he said, “let us find out who benefited the most from the statements made during the incident.” He also pointed out that BJP MLAs had received IPL tickets as well.
Responding to discussions about relocating the Chinnaswamy Stadium, Suresh said the government has already approved the construction of a new stadium at a location he had proposed.
“I had suggested building a stadium in Surya City and submitted a proposal for it. Bengaluru needs four stadiums in four directions to cater to its growing population and encourage youth participation in sports,” he said.
He noted that apart from Kanteerava Stadium, KSCA, and the Football Stadium, there are limited facilities in the city.
“When I was a Lok Sabha member, I had proposed allocating 100 acres in my constituency at Surya City. The land was later earmarked and the plan approved,” he added.
Suresh said he has discussed the project with Minister Zameer Ahmed Khan, Rajiv Gandhi Housing Corporation Chairman Shivalingegowda, and Anekal MLA Shivanna.
“The Cabinet has now approved the project, and a stadium will be developed on around 50–60 acres,” he said.
He further added that he has requested the Deputy Chief Minister to build another stadium at Shivarama Karanth Layout through the BDA, where 40 acres have been allocated. Plans are also being discussed to develop a well-equipped stadium in Bidadi.
Commending state government's recent bilingual policy move, Suresh said forcing children to learn three languages could affect their comprehension.
“It is a good decision to make two languages compulsory. Learning a third language should be left to the choice of students and parents,” he said.
Responding to criticism from BJP leaders, he said their tendency is to oppose every decision of the government.
“To please their central leadership, they take a pro-Hindi stance. Instead, they should advocate for the adoption of Kannada in all states,” he said.
When asked about the earlier three-language policy under Congress, he said, “the situation is different now. Today, the focus should be on quality learning. Kannada should remain the primary language, while students and parents can choose an additional language.”
