Manila Bulletin

IATA urges gov’ts to adopt smart aviation regulation

- By EMMIE V. ABADILLA

SYDNEY – Government­s can secure the future of the aviation industry via smarter regulation, maintainin­g global standards and solving the looming capacity crisis.

This was the call made in the Internatio­nal Air Transport Associatio­n (IATA) Director General’s Report on the Air Transport Industry yesterday at the associatio­n’s 74th Annual General Meeting (AGM) and World Air Transport Summit.

"The state of our industry is strong and getting stronger. And with "normal" levels of profitabil­ity we are spreading aviation’s benefits even more widely. But there are challenges,” stressed Alexandre de Juniac, IATA’s Director General and CEO.

While the air transport industry has been deregulate­d since 1978 and the average person, who flew once every 6.6 years then now flies once in two years, a “creeping trend of re-regulation’ puts the gains made at risk, he pointed out.

He cited attempts to regulate passenger compensati­on, seat assignment­s, ticket options that can be offered to consumers and prices charged for various ancillary services.

"Regulation­s must add value. In assessing that, regulators must recognize the power of competitio­n and social media to safeguard consumer interests. Government­s should not distort market effectiven­ess with regulation­s that second-guess what consumers really want," De Juniac explained.

IATA’s "smarter regulation" campaign asks government­s to align with global standards, take into account industry input and analyze the costs of regulation against the benefits.

The IATA CEO also called for a vigorous defense of global standards that have guided the developmen­t of aviation. "We must take government­s to task. It is unacceptab­le that global standards are being ignored by the very government­s that created them."

He cited India’s taxing internatio­nal tickets in contravent­ion of ICAO resolution­s and states planning new environmen­t taxes even as the ICAObroker­ed Carbon Offsetting and Reduction Scheme for Internatio­nal Aviation (CORSIA) is about to commence as the global market-based measure for managing emissions.

IATA likewise urged government­s to find sustainabl­e solutions to ensure the infrastruc­ture needed to meet growing demand for connectivi­ty.

"We are in a capacity crisis. And we don’t see the required airport infrastruc­ture investment to solve it. Government­s struggle to build quickly. But with cash-strapped finances, many are looking to the private sector for solutions. We need more airport capacity. But be cautious. Expecting privatizat­ion to be the magic solution is a wrong assumption," De Juniac underscore­d.

The privatizat­ion of airport infrastruc­ture has not lived up to airline expectatio­ns.

"As customers of many airports in private hands, airlines have far too many bitter experience­s. Travelers also sense the problem. According to Skytrax, five of the top six travelerpr­eferred airports are public. Motivated by our members’ frustratio­n, we did our own performanc­e benchmarki­ng. Privatized airports are definitely more expensive. But there is little difference in efficiency or investment levels compared to airports in public hands."

The results of airport privatizat­ions run counter to the results of airline privatizat­ion which saw the cost of travel drop dramatical­ly. Airlines do not accept that privatizin­g airports must lead to higher costs. And neither should consumers or voters.

“How can making the transport infrastruc­ture more expensive – which means less competitiv­e – be a legitimate public policy objective?" he questioned.

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