IATA SEES ôLAST CHANCEö FOR REMOVAL OF REGULATORY OBSTACLES
As international airlines continue to accumulate losses, the International Air Transport Association called for regulatory reforms to allow the airline industry to adapt.
“Our industry needs change. Government regulation keeps our industry from changing,” Giovanni Bisignani, director general and chief executive officer, told a conference of the International Civil Aviation Organization in Montreal. Bisignani stressed that the ICAO conference “may well represent the last chance to set our industry on the right regulatory track.”
IATA cited three regulatory obstacles to change: the bilateral system, national ownership rules and the attitude of competition authorities. The airline association argued that the industry needs economies of scales through mergers or acquisitions, together with the proper competition supervision.
“Bilateralism should evolve into a regional system with the merger of the single markets,” Bisignani said. The North Atlantic “could be the starting point in seeking a new way.”
Airlines should also be free to merge and approach the international financial markets for capital. This means that national ownership limits must be scrapped wherever they represent an obstacle to development.
“These limits are denying airlines the freedom of action given to all other businesses,” Bisignani said.
IATA conceded that many developing countries consider a national airline to be an attribute of sovereignty and an asset for economic development. It said some governments might wish to keep a “golden share” to make sure their national interests are taken into account. However, the airline association said that such governments should not “create obstacles for those who wish to liberalize further.”
IATA also criticized what it called “dogmatic competition policies combined with a lack of understanding of how air transport operates” on the part of the competition authorities.