IATA today debuted what it deems as a landmark agreement among seven states and the European Commission (EC) pledging to ease restrictions in bilateral aviation agreements that limit market access, pricing and access to capital markets.
The "Multilateral Statement of Policy Principles" regarding the implementation of Bilateral Air Service Agreements was signed today during the second annual IATA Agenda for Freedom Summit in Montebello, Canada.
States that have agreed to the non-binding principles are Chile, Malaysia, Panama, Singapore, Switzerland, the United Arab Emirates and the USA. The European Commission has also agreed to the principles.
IATA director general Giovanni Bisignani stresses those parties account for roughly 60% of global aviation. During the first meeting last year in Istanbul, 14 countries and the European Commission attended the summit.
In the agreement finalised today, the states and the European Commission agreed to three key elements.
First, the parties agreed to the possibility for airlines to access global capital markets through an agreement of the states not to exercise bilateral rights that would allow them to block international services from airlines with non-national ownership structures. The states also agreed to consider the possibility of waiving ownership restrictions.
The second element entails the states and the EC agreeing on principals that seek to reduce restrictions on market access and to expedite the further opening of markets in future bilateral negotiations.
A final pillar of the agreement is the states agreeing on principles to allow greater freedom to price airline services in line with market realities.
Bisignani today during a conference call with reporters said carriers are battling the current global economic downturn with "one hand tied behind their back" due to the current bilateral system. He also stresses that carriers are not asking for a cash bailout similar to the banking industry, rather, the industry seeks "commercial freedom to run our business like a normal one".
Responding to question about the absence of countries such as China, India or Japan in joining the initial agreement Bisignani explained certain countries need additional time to discuss the framework with their transportation ministers. He specifically said he looks forward to New Zealand signing the pact.
IATA also today cited results from a study it commissioned to InterVISTAS to examine liberalisation in 12 markets: Australia, Brazil, Chile, India, Mauritius, Morocco, Peru, Singapore, Turkey, The United Arab Emirates, Uruguay and Vietnam.
Results of the study show that lifting restrictions on market access and ownership and control would increase annual GDP in the 12 economics by 0.86% or US$67.6 billion. The study's conclusions also show that easing restrictions in both those areas would reduce average fares by 38%, and generate 2.4 million jobs.
Obviously there are governments that will not be interested in the easing of various bilateral restrictions. But Bisignani says IATA is ready to supply information if "governments need support in taking this decision".
Source: Air Transport Intelligence news
