Liberalisation of air transport "unimpressive"

Government delays in liberalising the aviation industry are “unimpressive” and “disappointing”, according to the International Air Travel Association (IATA).

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By  Barbara Cockburn Published  October 10, 2006

Government delays in liberalising the aviation industry are “unimpressive” and “disappointing”, according to the International Air Travel Association (IATA). Airlines have lost more than US$40 billion since 2001 and these losses are expected to continue unless commercial freedoms are introduced, said Giovanni Bisignani, director general and chief executive at IATA. “Failure to liberalise the air transport sector is delaying the recovery of a sick industry,” Bisignani told delegates at the International Civil Aviation Organisation symposium in Dubai. “The case for change and greater commercial freedom is immediate, but the government response is disappointingly slow.” He warned the future success of air transport is dependent on industry players having basic commercial freedom to serve their existing customers and capitalise on opportunities in emerging markets. “An agreement would add $5 billion to the bottom line of the industry. It is an opportunity we cannot afford to miss,” added Bisignani. “It is time to move from discussion and deliver results.” The US-EU negotiations on open skies and regulatory convergence has kick-started the liberalisation process and could provide a useful model for other governments to follow. “The fundamental question is the role of governments,” said Bisignani. “They’re the core of the debate. Making liberalisation work will require strong leadership.” He added that Dubai was “a shining example” of what commercial freedom can bring. Bisignani believes the region could economically benefit from a healthier air transport sector. A recent study by Boeing has reinforced this view by showing the spin-off effects of liberalisation. The impact of open skies would be a 63% increase in traffic, 24.1 million jobs and $450 billion in economic activity. “The challenge for government leaders is bringing their policies in line with recent changes in aviation and delivering on the industry’s vision for the next 60 years,” said Bisignani. “There is no time to sit and wait. The world is changing and so must air transport,” he added.

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