IATA to allow digital RMB in settlement system

China is an extremely important market for the International Air Transport Association, and the IATA will continue to strengthen its presence in the Chinese and North Asian markets, a senior official of the association said in Beijing this week.

The IATA represents some 300 airlines shouldering 83 percent of global air traffic. It just celebrated the 30th anniversary of the establishment of its China office in Beijing, where it is also the regional headquarters for the North Asia region, and the association highlighted its commitment to supporting the development of China's aviation industry.

The association said it would offer digital currencies in the settlement system that it operates for the aviation industry, and the first digital currency to be offered will be digital renminbi — expected to be available in China's billing and settlement system by the end of this year.

"China has obviously led the way. We will have trial runs taking place this week until December. We will extend the service to other countries, if they are interested in using digital currencies as well. China paves the way for the rest of the world," said Nick Careen, IATA's senior vice-president for operations, safety and security.

The move is expected to promote the internationalization of digital RMB in the global aviation industry, especially in the B2B application field, the association said.

"With China set to become the world's largest passenger market in the coming years, we look forward to deepening our partnership with the Chinese government, our member airlines and stakeholders to bring greater prosperity to the Chinese aviation market," Careen said.

With 33 member airlines in the Chinese mainland and 48 members in the North Asia region, the IATA is also running pilot projects for digital upgrades of passenger and cargo transportation in the region.

In addition, it is analyzing the benefits of artificial intelligence technology, which is expected to benefit the industry's training, schedule optimization and revenue management, and the application of AI is likely to happen quickly in the next few years, the IATA said.

Airlines have been highly interested in exploring AI. Still, safety is the No 1 priority for the aviation industry, and it ultimately requires human beings to make the right decisions, Careen added.

Meanwhile, the international air travel market has rebounded strongly after COVID-19, recovering to about 80 percent of capacity compared with pre-COVID levels, the IATA said.

As part of positive signs, Canada eliminated pandemic-era flight restrictions on Chinese mainland airlines in late October, thus opening the way for Chinese airlines to add more flights to Canadian destinations such as Vancouver and Toronto.

"This is a good sign. We anticipate the same taking place between China and the United States in the near future. In Europe, if things begin to settle, we will start to see rapid expansion and recovery of more international flights," Careen said.

Search volumes of flights from domestic cities to Canadian cities more than doubled after the announcement, with a one-way ticket averaging about 5,000 yuan ($690), according to Qunar, a Beijing-based online travel agency.

"The increase in the number of flights is expected to help create further price declines. Due to multiple factors, the China-North American air routes have not yet recovered to pre-COVID levels. The lifting of the restrictions indicates a positive trend," said Xiao Peng, a Qunar researcher.