IATA calls for regional liberalisation

‘Commercial regulation is outdated’ Alan Peat IT IS outdated government regulations that represent the strongest obstacles to change, according to Giovanni Bisignani, director general and c.e.o. of the International Air Transport Association (IATA), speaking at the opening of the 59th annual general meeting in Washington. The association supports regional liberalisation as a step towards “wide open skies” and a regulatory framework that will allow for consolidation. It also supports liberalisation of national ownership and control laws to give airlines the freedom to merge, acquire and go to international financial markets. For this the a.g.m. adopted IATA’s “Washington Declaration” - a call on governments to help ensure a sustainable future for international air transport, Bisignani added. International air transport is governed by the 1944 Chicago Convention, said Bisignani. “The bilateral system, national ownership rules and the attitude of competition authorities are the three pillars of stagnation in international air transport,” he added. “The key question is: What should be regulated and how much? “Safety and security definitely must be regulated but commercial regulation established in the era of DC-3s is clearly outdated.” While airlines operate in a commercial competitive environment, according to Bisignani, airports and air traffic service providers are monopolies which account for US$40-billion of airline costs. “Running an airport cannot be the licence to print money that some monopoly service providers believe they have been granted,” he said. “The industry cannot afford to continue to support 20% average profit margins for airports and ATS providers.”