IATA Calls for Industry-wide Change, Slams High-cost Airports

MACAU SAR, CHINA (PRC), April 18, 2005 – International Air Transport Association (IATA) Director General and CEO Mr Giovanni Bisignani, in his keynote address at the 54th PATA Annual Conference, told delegates that air transport has to become a “low cost industry”. Citing continued rising oil prices and increased consumer demand for inexpensive travel options, Mr Bisignani predicted US$5.5 billion worth of losses for the airline industry in 2005. “It has never been cheaper to travel. And it has never been as safe,” said the IATA chief, noting that 2004 was the safest year ever for aviation. “More people than ever are flying … but we have never lost as much money.” According to IATA, the global airline industry has lost US$36 billion between 2001 and 2004. Mr Bisignani outlined IATA’s agenda for change within the airline industry: “[Change] begins at home with airlines simplifying their businesses to deliver value without the costs of complexity. Then we ask our airport partners to be dedicated to cost efficiency and to preserve fair competition. On monopolistic tactics employed by some airports, Mr Bisignani said: “We can’t support a part of the value chain that has a license to print money. The cost of inefficient infrastructure gets passed through the value chain to our common customer.” Mr Bisignani said that governments must “re-think the way that they tax the industry and give us the freedom to run our businesses as businesses”. On European proposals to add a tax to air travel to pay for developing nation debt, Mr Bisignani said: “This is a serious problem. Making travel more expensive will do more harm than good in the developing world.” In the spirit of the 54th PATA Annual Conference theme ‘Connecting Tourism’s Stakeholders’, the IATA boss said that industry stakeholders must learn to cooperate and communicate better. Mr Bisignani challenged IATA and PATA to join forces and bring other industry stakeholders together. “Our industry needs to change fast,” he said. “So let’s get started.”