The aviation sector must make a convincing case that the path to net zero carbon emissions by 2050 is credible without the need for technology that currently does not exist.

That was the message from Iata director general Willie Walsh on the opening day of this week’s Aerospace Tech Week in Munich.

Walsh told delegates that the industry faces restrictions to growth, as is happening today in the Netherlands, if it does not make the case.

“We need to convince people there’s a means to get there [net zero by 2050] without having to rely on some new technology that does not exist.

“The focus will turn to how we make things more efficient to support growth because at the moment people see anything that restricts growth as being a positive.

“We need to convince people that the path to net zero in 2050 is credible.”

Asked about suppliers and entities in the aviation sector that are in a significant position of power because they are effective monopolies, Walsh said:

“We need to focus more on airports than other parts of the supply chain because we have suffered at the hands of airports more than others. That has changed as a result of Covid.”

Walsh said some of the consolidation in the industry has been positive, but efforts to become more sustainable have been undermined when the sector is “at the mercy of some of these monopolies”.

“We have seen this right across the board. There have been increases in charges because they have been able to do that. They have got away with it because they do not face competition.”

Iata has projected airline industry margins of 2.4% to 2.5% in 2024 and over the decade prior to Covid margins averaged around 3% to 3.5%.

Walsh said there are very few industries that can survive on such thin margins and that there are “very few people that would get out of bed in industry to work so hard to deliver margins as low as that.”

“It’s important that the industry improves its financial sustainability because financial sustainability and environmental sustainability comes hand in hand. It’s going to cost a lot of money.”

He added: “It’s still frustrating when people look at the industry and all they see is the top line; they look at the revenues. Few understand either the operating or net margin in the industry.

“I believe this is a very rich industry, there are examples of very good performing airlines, but it’s a tough industry if you look at it globally.

“A better appreciation of the challenges we face will help when it comes to dealing with monopoly suppliers liked airports and air traffic control.

“There needs to be a better appreciation of the damage taxation will cause the industry because there are people who believe the way to achieve sustainable goals is to tax the industry.”

With load factors today regularly in the high 90 percentage points having been in the 60s and 70s only a few decades ago, Walsh said the industry as improved significantly.

“If you tax people flying, all you will do is remove the ability to fly for some people, you wont reduce the flights. You are not going to have an environmental impact.

“The industry can still be profitable at those lower load factors. We need to understand all of the data and analyse it to make sure that the decisions we take will achieve the goals we are hoping for and not have unintended consequences.”

Walsh said the supply chain issues that have beset the industry since Covid are “better than it was” but that the industry “still has a long way to go”. “It’s very, very frustrating,” he said.

But he said most airlines have now factored that into their plans for this year and are aiming for lower growth than would otherwise have been the case.

Issues with the supply of parts continues to impact on maintenance schedules and new aircraft deliveries. “All this is quite frustrating in a market in which demand is very robust,” Walsh said.

“At a time when the industry is looking to add additional capacity not being able to do so is very frustrating. It’s a bigger issue than we expected at the beginning.

“I do not think that the disruption we experienced during the pandemic was fully appreciated by everybody. It will take time to get back to where we were.

“People will now factor in greater lead times. It’s going to impact the industry, but the major problems we encountered in 2022 as we started to rebuild, most of those have been overcome.”