IATA Urges Airlines to Face Challenges Head-On at AGM

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IATA Urges Airlines to Face Challenges Head-On at AGM

Unread post by bimjim » Tue Jun 05, 2018

https://www.ainonline.com/aviation-news ... s-head-agm

IATA Urges Airlines to Face Challenges Head-On at AGM
Emma Kelly
June 5, 2018

The international air transport industry faces challenges involving creeping re-regulation, maintaining the integrity of global standards, and dwindling airport capacity, International Air Transport Association director general and CEO Alexandre de Juniac told delegates at the association’s annual general meeting in Sydney, Australia, this week.

At the same time, rising oil and labor costs and the growing forces of protectionism continue to cloud the horizon for the world’s airlines, delegates heard.

IATA wants “smarter regulation” principles from governments, said de Juniac, who highlighted creeping re-regulation” issues in Brazil, Italy, the Philippines, and Latin America as examples, while U.S. Senate proposals to regulate what airlines can charge for re-booking, cancelation, checked baggage, and seat selection amount to “stunning reversal of U.S. deregulation.”

De Juniac also urged governments to implement global standards to which they have agreed. “We must take governments to task,” he said. “It is unacceptable that global standards are being ignored by the very governments that created them.” For example, the IATA director cited issues in India, where the government helped create resolutions prohibiting tax on international tickets and yet it continues to tax international travel. Furthermore, even while CORSIA represents the industry’s global scheme designed to manage emissions, countries including the Netherlands and Sweden are developing new environment taxes and charges.

Meanwhile, the industry finds itself in a capacity crisis, as 100 of the world’s biggest airports suffer capacity constraints, according to IATA. There remains a lack of required airport infrastructure investment to solve the problem, said de Juniac. Privatization of airports is not the solution, he added, citing IATA performance benchmarking research showing that privatized airports prove to become more expensive than those in the public hands. Corporatization, with governments retaining ownership, generally provides a better outcome for consumers and the economy, according to IATA.

“We need more airport capacity, but be cautious. Expecting privatization to be the magic solution is a wrong assumption,” de Juniac warned, adding that airlines have not experienced an airport privatization that has fully lived up to its promised benefits over the long term. Some 14 percent of airports accounting for 40 percent of global traffic worldwide currently operate under some form of privatization, according to IATA. “We are not against privatization, but need a better approach,” said Nick Careen, IATA’s senior vice president airport, passengers, cargo, and security.

In response, members unanimously passed a resolution calling on governments to prioritize long-term economic and social benefits delivered by an effective airport ahead of any short-term financial gains from privatization. Other resolutions passed at the AGM included denouncing human trafficking and committing to anti-trafficking initiatives.

Despite uncertainty surrounding tariff wars and business confidence taking a hit, the industry remains positive about travel growth, said Brian Pearce, IATA’s chief economist. The association expects air travel to increase by 7 percent this year, down from last year’s 8.1 percent but still ahead of the 20-year 5.5 percent average. The association expects total passenger throughput to reach 4.36 billion, while cargo demand grows by 4 percent.

“The industry faces some pretty severe challenges so we expect slower growth in passenger and cargo traffic this year,” said Pearce. “It’s by no means as good as last year, but still in pretty good shape.”

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