In the wake of crisis comes opportunity. As became clear at the IATA Annual General Meeting (AGM) in Washington at the start of June, there is a new resolve to tackle problems rather than wait for the crisis to pass. But how long will such a mood prevail?
Giovanni Bisignani neatly captured the mood, bursting out of his first IATA board meeting as general director to declare enthusiastically: "It's the new IATA!" The tone was set for what proved arguably the most dynamic IATA Annual General Meeting (AGM) in recent memory.
There was every reason for gloom as airline leaders gathered in Washington, yet the mood was surprisingly upbeat. That was hardly due to any sense that the crisis is easing - for many, the challenges are still a clear and present danger, especially for the US hosts. Neither was there much hard progress to report. But there were signs of a new resolve to tackle the industry's deep and long-standing flaws, rather than simply hunker down until the storm has passed.
It remains to be seen how long this new-found sense of purpose lasts now that executives are back at their desks and the big issues of the day begin to look a little less urgent. But these extraordinary times do appear to have opened a window of opportunity for some extraordinary change. As became clear in Washington, the industry has scented a rare chance to drop, at last, some of the cumbersome baggage that is no longer needed on the voyage.
For his part, Bisignani is clearly keen to grasp this opportunity for change. "We knew that the industry had changed and IATA had to change too," he says. "You have to remake the rules of the game. And I think we'll make it." Whether IATA and its members do indeed make it in this brave new world remains an open question, but the immediacy, directness and even courage of some of the messages coming out of the AGM were striking.
Certainly, Bisignani and his largely reshuffled management team deserve the credit for getting down to business. Much of the formality had gone. The gavel came down on the board of governors report in half an hour rather than half a day, as Bisignani proudly notes. From the outset he has been determined to bring some passion and immediacy to the annual gala.
There were even two spontaneous rounds of applause during Bisignani's state of the industry address as he posted up a couple of issues, already rehearsed in the board meeting, which IATA now means to address. The first came as he made one of a stream of vocal attacks on the level of airport and air traffic charges. In a move perhaps more important for its symbolism than its financial impact, IATA reduced its own fees to members by 10%. The second round of applause came, apparently led by the US contingent, as IATA for the first time in public forum declared the need to reform pilot work practices. He also went on to make what IATA is calling the "Washington Declaration", announcing open season on the foreign ownership limits, bilateral system, competition policy and a host of other government regulations that have retarded the development of international air transport into becoming a truly global business.
Others too warmed to the theme, including Dr Cheong at Singapore Airlines and Lufthansa's Jürgen Weber, although they are by way of parting shots as they now step down. Other big names including Alitalia's Fausto Cereti, Iberia's Xabier d'Irala and American's recently departed Don Carty (understandably absent from the event) are also moving on, adding to the sense of a brave new world with new people in it.
The AGM itself took place against the backdrop of Europe's renewed push to negotiate open skies with the USA - only days after the event closed, Brussels finally won its mandate to start talks. US transportation secretary Norm Mineta had opened the proceedings at Washington with a public announcement that he would put to Congress a plan to raise the US foreign ownership limit from 25% to 49%, which significantly would bring it into line with Europe. While the initiative is perhaps no more than a gesture, which stands little foreseeable chance of passing into law, it does signal intent.
There are still plenty of obstacles ahead before the talk of change, in liberalisation or elsewhere, translates into hard action. In Washington there were uneasy mutterings from those carriers outside the main North Atlantic axis, for whom the challenges are different and for whom talk of consolidation and liberalisation look like foreign preoccupations. Even among the committed there is the danger that if and when traffic recovers and the pain eases, the impetus for radical change will give way to the pursuit for market advantage.
The epic task ahead for IATA and its members is to ensure that they assemble in Moscow a year from now, with hard evidence that change is on track. As they struggle to get there, executives might take heart from the Unisys marketing tag-line, projected large alongside the IATA logo at Washington by the event's main sponsor: "Imagine it done."
Source: Airline Business
