Graham Warwick/SYDNEY
The International Air Transport Association (IATA) has entered the debate over liberalisation of air services. Concerned that the "patchwork progress" with liberalisation could harm co-operation between airlines, the organisation wants regulators to follow a common set of principles.
The principles, agreed at IATA's annual general meeting (AGM) in Sydney, on 2-4 June, do not recommend a particular mechanism for liberalisation, nor do they mention the contentious issue of removing restrictions on foreign ownership and control of airlines - seen as the main barrier to full liberalisation. "We are not taking a position on one model. Every region has to decide for itself," says IATA director general Pierre Jeanniot.
Instead, the organisation wants future regulatory systems to provide consistent safety and security oversight, adequate infrastructure, open access, continued interlining and mechanisms to improve business efficiency.
In a bid to set an example on liberalisation, Australian deputy prime minister John Anderson unveiled an international air services policy at the AGM, allowing 100% foreign ownership of a domestic airline. "Ownership and control restrictions force airlines without local equity to rely on debt and debt-laden airlines put our safety initiatives at risk," he says.
At the AGM, International Civil Aviation Organisation president Assad Kotaite endorsed IATA's liberalisation principles, but suggested relaxation of ownership restrictions should be added to the list. "Broadening of ownership and control provisions is inevitable, but unless the aviation community is directly involved in their evolution, the risks will be high," he says.
Rather than actively shaping regulatory reform, some feel IATA's liberalisation principles are mainly concerned with safeguarding the existing multilateral interline system, which enables airlines to co-operate on passenger ticketing and cargo handling. "As liberalisation unfolds, we need to protect what works now," says Jeanniot.
The interline system is coming under scrutiny from anti-trust authorities, led by the Australian Competition and Consumer Commission (ACCC), which announced at the AGM it is to review IATA's current anti-trust authorisation. "IATA effectively operates as a cartel," says ACCC deputy chairman Allan Asher.
Also at the AGM, an unexpected move by smaller airlines resulted in IATA being asked to give urgent consideration to the establishment of a single e-commerce portal for the global air transport industry.
In other actions, IATA adopted a fleet-wide fuel efficiency goal of a 10% improvement over the next 10 years, having achieved 17% since 1990.
Source: Flight International
