* IATA meet of airline execs in Doha June 1-3
* Tracking efforts under scrutiny after MH370
* IATA to update 2014 airline profit forecast
* Passenger numbers up, but cargo remains tough
By Victoria Bryan and Al-Zaquan Amer Hamzah
DOHA/KUALA LUMPUR, May 30 Global airlines are
gathering in Doha for an industry summit intended to celebrate
100 years of commercial air travel, but now darkened by the
disappearance of Malaysian jetliner MH370.
The International Air Transport Association, which
represents about 80 percent of the aviation industry, has
pledged to find new ways to track aircraft as the international
search for MH370, now three months old, hits fresh obstacles.
"The loss of MH370 continues to be on everybody's mind,"
Tony Tyler, director general of IATA, said ahead of the meeting.
Equally on airlines executives' minds however is the cost of
fitting aircraft with the equipment needed to track them by
satellite - a keen worry particularly for smaller players.
The industry, where onerous approval procedures slow the
adoption of new technologies, has been criticised for not moving
faster to implement regular tracking standards after the crash
of Air France flight 447 in 2009.
"The bigger airlines that fly globally might have the cash
for it, but the smaller players already have their margins
stressed and don't have much money left to spare," an Asian
airline executive said, asking not to be identified.
Tracking will certainly be the dominant issue at the June
1-3 annual meeting in Qatar's capital of IATA, which groups 240
But airport regulation, changes to cargo laws and growing
concerns over the problem of dealing with unruly passengers will
also be on the agenda.
Earlier this month IATA pledged to set up a task force to
find ways of tracking aircraft in the short term while the
United Nations' aviation agency develops long-term standards.
Two UN agencies have held rare international meetings of
governments and industry on the issue in the past month, first
at the Montreal base of the International Civil Aviation
Organization (ICAO) and most recently in Kuala Lumpur, where
Flight MH370 departed on March 8 before vanishing without trace.
Previous regulatory studies on the issue have identified
costs as an issue, particularly the recurring satellite fees.
But a senior ICAO official expressed optimism after the
international gathering that airlines would go ahead soon with
real-time tracking without cost getting in the way.
Airline pilot and blogger Patrick Smith told Reuters: "We're
hearing more chatter about certain ideas than we did in the
One idea worth considering, he said, would be an
independently-powered transmitter that relays where the aircraft
is even if electric power is lost completely. A system of
continuous data streaming from onboard systems, as some others
have suggested, would be unnecessary as well as expensive.
With no clear agreement on the technology to use there is
still no clear time scale for when it might be implemented.
On the eve of the IATA talks, some officials pointed out it
would take a rare degree of co-operation between the big and
small players of a cut-throat industry to make the system work.
"If the vendors don't have the ecosystem of buyers to sell
to, it will end up being a small and expensive product that only
a few airlines can take on," said an Asian regulator attending
this week's Kuala Lumpur tracking talks.
IATA will also discuss the shape of the $750 billion global
airline industry as a cyclical recovery rubs up against concerns
over emerging market economies and China's slowdown.
While passenger numbers are rising, the air freight business
has been in the doldrums for some time: Cargo volumes rose by
3.2 percent in April, compared with a 7.5 percent rise in
passenger traffic. IATA delegates will discuss ways of
shortening shipping times to improve the competitiveness of
their cargo businesses.
"Partnerships could a be a way for airlines to combat the
weak cargo market," said Metzler analyst Juergen Pieper.
IATA will provide updated forecasts for the industry's
profitability on Monday during the meeting. Its current forecast
is for 2014 industry profit of $18.7 billion on $745 billion in
global revenue, equivalent to a profit margin of 2.5 percent, or
about $5.65 per passenger carried.
Qatar's capital Doha, which inaugurated its new $15 billion
airport in April, will be the first city in the Gulf to host the
But the growing significance of its airlines and those of
other Gulf states is also fuelling a row with European and U.S.
carriers who may raise their concerns at the meeting.
Through modern infrastructure and support from state
governments, Gulf airlines have drawn more travellers from
former hubs in Europe and Asia to the Middle East and helped the
Gulf to globalise its economy and diversify oil-based revenue.
In just over a decade, the share of global traffic accounted
for by Middle East airlines has increased to 9 percent from 4
percent, Tyler said.
European and U.S. carriers claim the state-owned status of
airlines like Emirates, Abu Dhabi's Etihad Airways and
Qatar Airways, and possible fuel subsidies, mean they are not
competing on a level playing field.
The Gulf carriers have denied receiving any subsidies from
their respective governments, though the issue was brought to
the fore earlier this month after reports that fast-growing
Etihad Airways had access to an interest-free $3 billion loan
from Abu Dhabi's ruling family.
(With additional reporting by Praveen Menon and Tim Hepher;
Editing by Sophie Walker)