The airline industry needs an international voice like never before on issues ranging from insurance and security to ownership rules and airport charges. The question is who can, or will, step forward to take the lead?
The airline community has always secretly prided itself on the fact that it is a little more racey than less jet- setting industries, but during the trauma of the past few months that sense of excitement has started to wear thin. If the great and the good, gathered at the IATA annual general meeting in Shanghai, had one collective wish, then it was that aviation could behave more like a "normal business". But the fact is that this is not a normal business, with normal problems. The big issues with which airlines grapple need to be solved on a world stage, fraught with the complexities of international politics and under a constant media spotlight. In general there is little disagreement about the broad sweep of policy, about what can and should be done. The question is over who, if anyone, is capable of making it happen. Step forward IATA?
There is hardly any shortage of problems looking for an international solution. And 11 September has shown the speed with which they can rise up the agenda. Almost overnight, insurance turned from being a routine cost item, to an outright emergency that could technically have grounded the world fleet. The airline community remains on notice that its war risk insurance could be withdrawn at a moment's notice. Further terrorist action, even if it does not directly involve an airliner, could see insurers rushing again to press the panic button. The rush to tighten airport security has also created a wealth of uncertainties and a potentially massive cost burden.
And none of the issues which threatened the industry prior to 11 September have gone away. The future of air traffic services continues to bubble near the surface; the environmental debate is ready to flair up again at any time; and then there is the even more fundamental question of reforming a creaking bilateral system still based around sovereign states and national carriers.
Each of these issues ultimately needs to be resolved at international level and there is the rub. The natural forum for action should be ICAO, with its pseudo-regulatory power. However, with 187 contracting states each with a single vote, it is unlikely ever to be the swift and decisive player that the airline industry needs. It has moved surprisingly fast to get things moving on security and will devote its next assembly to the topic, but that is still a year away. On war risk insurance it believes a global solution may take as long as three to five years to achieve.
In the past, it has rather been Washington that set the pace, with ICAO following at a distance. US policy on areas such as safety assessment or open skies bilaterals have tended to set de facto world standards. But for two reasons, this role is no longer so clear. First, the USA is no longer the only power bloc with aspirations to set world policy. The European Commission too sees itself as Washington's equal and has not been afraid to demand its say or threaten to use its teeth. The result has often been running transatlantic battles over issues such as competition or the environment.
Second, US policy appears to have become more inward looking, seeking solutions that play well at home rather than abroad. That was already true before 11 September as the new administration set about putting domestic policy at the top of the agenda. After the terrorist attacks the focus has, naturally enough, become more, rather than less, preoccupied with national concerns.
While the rest of the airline world was in Shanghai calling for an integrated, international approach to aviation security, in Washington they were preparing to launch the new Homeland Security agency, which as its name suggests has little remit or apparently ambition to play a more global role. That is understandable enough given the massive task that it faces in, among other things, totally transforming security throughout the world's biggest airport system. Yet what is being done in the USA has huge implications for the rest of the world. The nightmare is for a proliferation of expensive, incompatible and ultimately inefficient solutions.
It is just that kind of fragmentation that IATA was founded to avoid. True, the association has no regulatory authority and not the same influence it could wield in the days before deregulation. But what it does have could be more important: a powerful international membership and a global brand that any other business association could only dream of. To this it needs to add the ability to react fast and decisively to events and make the airline lobby heard. The incoming IATA director general Giovanni Bisignani has promised to concentrate on doing just this, picking up where his predecessor left off.
There are no guarantees that IATA can become such a slick body or that its members will allow it the freedom to speak up. But if it does not succeed, then the industry may have missed one of its best opportunities to take a lead in shaping policy for the world stage.
Source: Airline Business
