Earnings, SAF, order books and more from the IATA AGM in Dubai

All IATA happenings in Dubai: The World Air Transport Summit and International Air Transport Association (IATA) will wrap its annual general meeting and the World Air Transport Summit today in Dubai and here’s the news that emerged on day two of the conference.

AN OUTLOOK ON EARNINGS-

Middle Eastern carriers are set to rake in some USD 3.8 bn in net income in 2024, up from USD 3.1 bn a year before, according to an IATA press release. The region’s aviation sector benefits from robust economies and traffic at hubs, with the UAE continuing to attract visitors and KSA’s tourism and infrastructure investments driving strong growth in cargo and passenger figures, IATA notes. Robust demand for air travel is keeping up with carrier efforts to boost capacity. Geopolitical risks represent the most salient threat to the regional sector, with Levantine carriers seeing greater exposure. GCC carriers are less likely to be affected unless tensions between Iran and Israel flare up, IATA said.

On the global side: The global aviation sector is forecasted to see USD 30.5 bn in net income this year, with revenues reaching USD 996 bn, an all time high, IATA said. Total air cargo volume is forecasted to hit some 62 mn tonnes this year.

THE STATUS ON SAF-

SAF production is set to triple: Sustainable Aviation Fuels (SAF) production in 2024 is set to hit 1.9 mn liters, representing 0.53% of the aviation sector’s fuel requirement and on track for tripling target, Wam reports. “SAF will provide about 65% of the mitigation needed for airlines to achieve net zero carbon emissions by 2050. So the expected tripling of SAF production in 2024 from 2023 is encouraging. We still have a long way to go, but the direction of exponential increases is starting to come into focus,” IATA Director General Willie Walsh said.

And there’s a registry in progress: The IATA plans to launch a SAF Registry in 1Q 2025 to hasten adoption by tracking and reporting emissions cutbacks attributed to the biofuel, according to a press release. Emirates and Qatar Airways are regional carriers supporting the registry, alongside United Airlines, Air France, Air Canada, American Airlines, Singapore Airlines, Japan Airlines, DHL Group, and others. Airbus, Boeing, and GE Aerospace represent the OEMs supporting the initiative, together with fuel producer World Energy, IATA said.

How will it work? The registry will allow carriers to purchase SAF batches that are certified and tracked internationally, allowing carriers to account for their emissions reductions accurately, IATA explained. The initiative will also be neutral with regards to regulations and SAF type, allowing it to operate across different jurisdictions. Moreover, the registry will assist airlines in their efforts to meet compliance for carbon offset mandates, including the Carbon Offsetting Reduction Scheme for International Aviation (CORSIA) and the EU Emissions Trading Scheme (ETS), IATA explained.

A LOOK AT THE ORDER BOOKS-

Qatar Airways is reportedly close to making a decision on a major widebody order that will be split between Boeing and Airbus, Bloomberg reports, citing sources close to the matter. The order could include as many as 200 jets with a decision expected at the UK’s Farnborough Air Show next month, unnamed sources said.

What’s the split? The carrier is looking to order a mix of Airbus A350 and Boeing 777X widebodies, but the split has not been finalized, the sources also said. Qatar Airways already has 74 pending orders for 777Xs and 18 for A350s, data from Airbus and Boeing showed.

This is not the first we hear of this: The Qatari carrier issued a Request for Proposals (RFP) to Airbus and Boeing for a “big” order for new aircraft, its CEO Badr Al Meer said in March. Earlier reports had however indicated that the upcoming order would be composed of 100 to 150 Boeing 777X and Airbus A350 aircraft, but this has since been ramped up to 200.

Qatar Airways needs a large order to keep up with regional rivals, Bloomberg writes. Riyadh-based, PIF-owned airline Riyadh Air purchased 39 787-9s, with options for an additional 33 787-9s last year at the 2023 Paris Air Show and is looking to launch next year with an all Boeing fleet. Emirates also ordered 90 Boeing 777X, and an additional five 787s at a value of USD 52 bn in November 2023. These latest orders have placed additional pressure on Qatar Airways to revamp its fleet in order to maintain growth momentum, Bloomberg explained.

Israeli flag carrier El Al must take a decision soon on an order for narrow-body jets from Airbus and Boeing or risk losing delivery slots, Reuters reports, citing statements by CEO Dina Ben Tal Ganancia at the IATA conference in Dubai. “We will probably want to take a decision soon, otherwise we're going to lose the slots,” Ben Tal Ganancia said. El Al operates an all Boeing fleet, but is weighing its options on whether to go with Airbus’ A321neo narrow-body jetliner or Boeing’s 737 Max for a 30 aircraft order, the newswire said. The airline should be deciding within a few weeks on the order which is expected to be valued at USD 2 bn, CFO Yancale Shahar told Reuters. El Al hopes to take deliveries between 2026 and 2027, while acknowledging that Airbus’ order books are full until 2029, Ben Tal Ganancia also said.

IPO AND OTHER PLANNING-

Etihad Airways is pushing forward with plans for its IPO on the ADX, with the company “working very hard to make it happen whenever it is the time,” Etihad CEO Antonoaldo Neves told Bloomberg in an interview (watch, runtime: 4:34). Etihad owners told Neves to run the company as if it were listed, he adds in the interview.

REMEMBER- ADQ is considering listing Etihad on the public market “as soon as this year,” with the specific timing and size of the offering still undecided. ADQ is eyeing going after both a traditional IPO and direct listing, and has tapped banks to advise on its planned IPO on the ADX. Etihad would be the first major Gulf carrier to trade publicly if the IPO goes through.

Emirates Airlines is reviewing its contingency plans after the April floods cost it AED 400 mn in damages and claims, Emirates chief Tim Clark told a media briefing at the International Air Transport Association (IATA) meeting in Dubai, according to the National. “We've got to be far more aggressive, if you can call it that, and if necessary, stop the operations and [grapple] with all the fallout,” he said. The airline needs to spend more on manpower, ground equipment, and training in order to be more prepared if a similar crisis happens again, Clark added.