Fact Sheet: Infrastructure

  • Around 11% of the cost of air transport can be attributed to infrastructure charges.
    • In 2007, airlines and their customers paid at least $54.2 billion in these charges. (1)
    • In comparison, airline revenues (a proxy for the cost of air transport) totaled $508 billion. (2)  
  • IATA works with major airports, ANSPs, fuel suppliers, regulators and governments globally to deliver better service and cost savings through
    • Direct consultation
    • Negotiation 
    • Lobbying activities
  • The key principles of infrastructure charges that providers need to follow are:
    • Transparency
    • Cost-relatedness of charges
    • Consultation with airlines,
    • Equitable charges structure
    • Single till
    • Productivity improvements.
Economic crisis and rising costs

 

During times of crisis the need for improved cost efficiency is vital. 

  • Since 2001, airlines have done remarkably well in reducing costs.
    • 16% improvement in fuel efficiency
    • 58% increase in labor productivity 
    • 13% reduction in non-fuel unit costs. (3)  
  • Not all infrastructure providers have matched airline efficiency efforts
    • From 2002 to 2007, user charges levied directly on airlines grew by 61.9%. (4) 
  • And some governments continue to punish airlines with counter-productive taxation.
IATA infrastructure cost savings
  • In 2008
    • IATA generated total savings of $3.5 billion in charges, fuel and taxation
    • US$1.7 billion was real cost reductions. 
    • These savings were overwhelmed by $8.5 billion in increases.
  • IATA’s 2009 target for savings/cost avoidance is
    • $1.5 billion in charges, fuel and taxation
    • Including at least $1 billion in real cost reductions. 
    • As at end October 2009, our actual savings totaled $3.3 billion and increases totaled $2.2 billion.
  • In 2009, a number of providers have responded favorably to the crisis and IATA’s campaigns for cost savings.
  • Airport: Malaysia Airport Holding Berhad reducing landing fees 50% for two years, Copenhagen airport froze charges till 2011, reduced landing charges 25%, and agreed to various other savings over 5 years.
  • Air Navigation: in Mexico, SENEAM announced a 50% reduction in air traffic control fees for 3 months
  • Fuel: the Peruvian government exempted jet fuel from the ISC tax
  • Tax: the Dutch government cancelled the Dutch Air Passenger Duty
 

Cost increases persist

  • The 10 most prominently expensive airports in the world (5)
    • Toronto, Athens, New Jersey-EWR, London-LHR, Paris-CDG, Vancouver, Osaka, Vienna, Zurich, and Berlin.
  • The following providers have announced increases for 2009:
    • BAA and the UK CAA: London Heathrow’s 86% increase
    • Delhi and Mumbai airports: 207% increase
    • Dubai: passenger fee increase to AED 75
    • Quiport in Ecuador: 79% increase
    • ATNS (South Africa): proposing a 44% increase
  • Infrastructure improvements through air navigation and traffic management, can reduce the industry fuel bill and emissions by 12% through:
    • Improved arrival, departure and approach procedures
    • Shorter routes
  • In 2008, IATA achieved 214 route improvements, saving US$1.3 billion.

 

(1) $42.0 billion in airport charges (source: ACI 2007) + $12.2 billion in air navigation services charges (ICAO 2007)
(2) IATA 2008
(3) IATA World Air Transport Statistics, 53rd ed., 2009

(4) ICAO 2007

(5) Jacobs Consultancy Airport Charges

 

Updated November 2009