Hilarious – airlines profitable after all…

It’s not just down to differing definitions and here I show my scars of countless ICAO/EUROSTAT (and IATA) stats meetings trying to get statistical definitions harmonised between differing organisations so that even the definition of a revenue passenger was the same across the board.

I frequently had problems at meetings with differences in the system financial results that IATA published in World Air Transport Statistics and the Form EF-1 results published by ICAO because of definitional aspects like non airline activities etc etc etc.

You have to remember that IATA is a trade association and there to represent and lobby on behalf of its members. It does not represent all carriers and given that people like Easyjet, Ryanair and Southwest are not members (although FR was for some years) it probably represents less of the industry now than it did ten years ago.

Back in the late 80s the IATA Director General was Gunter Eser and he would not allow the IATA PR people to release any negative publicity about the airline industry unless it was absolutely necessary and everything had to go through his office for approval before public release. The next DG Pierre Jeanniot was more reasonable but his successor Bisignani is a different kettle of finish altogether for reasons I wont go into here but it is noticeable that these results were issued just before the IATA AGM in Berlin this week.

The beauty of IATA financial stats in the days when I compiled them was that the most widely used statistic could not be tied up against anything else that was published – quarterly financial statistics for international scheduled services. ICAO didn’t collect this stuff and airlines did not break down costs and revenues in their annual reports, so who could prove our figures wrong?

“so who could prove your figures wrong?”

Hey there are a lot of fuzzy figures out there….like Airbus Industrie claiming that the A320 is cash postive, yet refusing to divulge the financials of the program. By the way, not my claim, but Pierre Sparaco’s in last weeks Aviation Week.

It’s not just down to differing definitions and here I show my scars of countless ICAO/EUROSTAT (and IATA) stats meetings trying to get statistical definitions harmonised between differing organisations so that even the definition of a revenue passenger was the same across the board.

I frequently had problems at meetings with differences in the system financial results that IATA published in World Air Transport Statistics and the Form EF-1 results published by ICAO because of definitional aspects like non airline activities etc etc etc.

You have to remember that IATA is a trade association and there to represent and lobby on behalf of its members. It does not represent all carriers and given that people like Easyjet, Ryanair and Southwest are not members (although FR was for some years) it probably represents less of the industry now than it did ten years ago.

Back in the late 80s the IATA Director General was Gunter Eser and he would not allow the IATA PR people to release any negative publicity about the airline industry unless it was absolutely necessary and everything had to go through his office for approval before public release. The next DG Pierre Jeanniot was more reasonable but his successor Bisignani is a different kettle of finish altogether for reasons I wont go into here but it is noticeable that these results were issued just before the IATA AGM in Berlin this week.

The beauty of IATA financial stats in the days when I compiled them was that the most widely used statistic could not be tied up against anything else that was published – quarterly financial statistics for international scheduled services. ICAO didn’t collect this stuff and airlines did not break down costs and revenues in their annual reports, so who could prove our figures wrong?

I would rather avoid the word suspicious and rather say that in different parts of the world airlines’ declare their profits on different date/months.
Accounting standards are not all uniform across every nation in the world.
Also it is better to see the figures relating to each airline’s Cash Flow Statement rather than purely the profit in the Income Statement.
Profit can be here (declared) today and in fact gone (already committed to settle existing debts) not just tomorrow but ‘yesterday’.
Good cash flow that is well managed and any excess sensibly invested is to be lauded as good governance of any airline fitting that financial management style.

Ack. That does seem suspicious.

Oh yes, I did read the whole report, thank you.

However, (speaking as a former IATA employee who knows what sort of things go in the Geneva/Montreal control bunkers) a turn round of some $5bn just before the IATA AGM is somewhat suspicious given the prevailing economic climate.

Perhaps Bisignani was primarily referring to European airlines, and the report is referring to world airlines……you did read the second part of the report didn’t you?: “Europe jets lag” and “The bulk of the revenue turnaround is predicted to come from Asia (excluding Japan)….” It further goes on to say that the ash caused some 1.8bn in lost revenues.