IATAÆS JEANNIOT CALLS FOR AIRLINE INDUSTRY RESTRUCTURING
Pierre J. Jeanniot, director of the International Air Transport Association, said bilateral treaty provisions and archaic foreign ownership rules are preventing airlines from making profitable restructuring moves.
Jeanniot, speaking at the opening of the Airline Financial Summit 2001 in New York last Thursday, said these restrictive rules keep airlines from necessary consolidation.
“Only a profitable airline industry can deliver the type of price/quality ratio the consumer expects,” he said.
Jeanniot noted the frail profitability of the air transport industry, caused by competitive pressure on yields, cost increases caused by higher fuel prices over the past two years and the slow impact electronic commerce has had on airlines' marketing costs.
“The fundamental laws of economics have not changed — and our industry should better manage itself accordingly,” he said.
Jeanniot also pointed out the inefficiencies that airlines face at airports. While airlines have privatized, many airports and air traffic control facilities remain as government monopolies, with perennial inefficiencies and capacity shortages,” he said. And those airports that have privatized have been regarded as licenses to print money, in the absence of independent watchdog authorities.