Good morning. I am very pleased to be here in Morocco for the 58th AACO AGM, meeting under the high patronage of His Majesty King Muhammed VI.
Thank you for the warm welcome and hospitality we have received since arriving in Rabat and thank you again for the wonderful event last night. IATA and AACO have a long history of collaboration and are partners in supporting the development of air connectivity in the Middle East and North Africa region.
Thank you to Secretary General Abdul Wahab Teffaha and the Executive Committee for the invitation to be here. And my special thanks to Abdelhamid Addou, Chairman and CEO of Royal Air Maroc and gracious host for this meeting.
Both of our organizations are dedicated to serving our members' needs. And our work with AACO is led by Kamil Alawadhi, our Regional Vice President, who is very familiar to all of you.
Globally, 2025 is shaping up well despite political and economic uncertainty, armed conflict, and trade friction. Looking over the first nine months of the year, passenger demand is up 4.8% and cargo demand by 3.2%. Considering the circumstances, these are strong numbers, particularly so for cargo. And this year it's the cargo performance that once again demonstrates the resilience of our industry and the speed of reaction to changing external factors. When you examine the three largest trade lanes - Asia/North America, Asia/Europe, and Europe/North America, which together account for almost 60% of Cargo Tonne Kilometers, you see clear evidence of our ability to adapt. As demand on the primary trade lane, Asia/North America, declined due to trade tariffs (year to date CTKs are down 1% versus last year), we saw capacity shifting to Asia/Europe where demand is up 10.2% YTD and to Europe/North America, where capacity is up 7.6% YTD.
Of course, demand and profitability are different. I am optimistic about our estimate of a collective industry net profit of $36 billion in 2025. But that is just a 3.7% margin on almost $1 trillion of revenues. We are in a tough, low margin, highly regulated business where it is hard to make ends meet. In those circumstances, our job as your association is to make your work easier, your operations more efficient, and your costs more manageable.
With that in mind, today, I will report on
- The outcomes of the 42nd ICAO Assembly
- The work we are doing on supply chain issues, and
- Broader initiatives where I believe your engaged participation will bear mutual benefits.
42nd ICAO Assembly
Let me begin with the ICAO Assembly.
Three of the Assembly's most important results confirmed support for existing ICAO principles. We defended both the slot allocation regime and ICAO's principles for setting airport charges against unhelpful changes. And our proposal to respect and reinforce ICAO principles on passenger rights regulations was broadly supported. As a result, these remain strong tools in our efforts to manage insufficient capacity, keep airport charges reasonable, and protect consumers with globally harmonized rules.
The Assembly was also very helpful in supporting our calls for governments to abide by the agreements they make at ICAO. These include:
- Supporting our calls for states to file accident reports in line with the requirements of Annex 13. Given that only about half of accident investigations produce a final report in line with Annex 13 requirements, this is a critically important reminder.
- Backing our calls for governments to keep aviation free from GNSS interference—something you in this region are unfortunately very familiar with.
- Reinforcing the call for governments to respect aviation safety when allocating radio frequency spectrum. In particular, we must maintain guard bands around critical frequencies such as those used for radio altimeters. Failure to do so in the 5G rollout in the US, Canada, and Australia led to significant costs in retrofitting aircraft—retrofits which are now suffering delays because of supply chain issues. We must not make the same mistakes as the 5G rollout continues in other markets or when 6G is eventually accommodated.
- Emphasizing ICAO's competency and principles in taxation. This is of vital importance given developments with the UN's model tax agreement that give states the option to tax airlines at the source of their revenues. The current treatment of airline corporate tax has no leakage, is fair, and efficient—well worth defending!
The Assembly also looked at progress towards net zero carbon emissions by 2050. It reaffirmed the commitment of governments to the Long Term Aspirational Goal (LTAG) and it set up a Finvest Hub to help gather the funding needed for the enormous undertaking of decarbonization which includes the production of SAF and LCAF at scale.
We also received support for a global SAF accounting and reporting framework—two areas where IATA has been particularly active having launched the SAF Registry (now operated independently)—and built consensus on global standards for the accounting principles needed to make it work.
Lastly, I would highlight the Assembly's defence of CORSIA. It is particularly timely for two reasons.
