AACO calls for further air liberalisation

The Arab Air Carriers Organisation (AACO) warned the region’s governments to lighten up on air liberalisation, calling for greater flexibility in traffic rights within the region at its annual general meeting in Kuwait last month.

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By  Barbara Cockburn Published  December 4, 2006

The Arab Air Carriers Organisation (AACO) warned the region’s governments to lighten up on air liberalisation, calling for greater flexibility in traffic rights within the region at its annual general meeting in Kuwait last month. Addressing an audience of industry delegates and his highness and prime minister of Kuwait, Sheikh Nasser Al-Ahmed Al-Sabah, AACO’s secretary general, Abdul Wahab Teffaha, said at the opening ceremony of the AGM that the industry was facing an unstable environment similar to that in 1980, when the organisation first held its AGM in Kuwait, but that despite the “instability” of some parts of the region, the air transport industry has maintained strong growth. “The continuation of Arab-Israeli conflict, the situation in Iraq and some other Arab territories, terrorism and the instability in the surrounding region, are all factors which have put tremendous pressure on the Arab air transport industry,” he said. “This has prevented the industry from taking advantage of all the potential in the Arab travel market.” He told delegates, including aircraft and engine manufacturers, aviation consultants, leasing companies and ground handling services, that the main challenges facing the industry were air transport liberalisation, ownership and control, alliances, customer relations and managing costs. Teffaha urged the region’s governments to adopt a more flexible policy with air liberalisation, but conceded that the Arab airlines are still in a transition period from a protective regulatory environment to a liberal one, “and transition from state-owned and supported airlines to commercially driven and privatised one is a painful process.” Despite the problems the region has encountered recently, he commended the industry for growing at rates which are “the highest in the world” and will conclude the year with passengers numbers travelling through Arab airports reaching 143 million, a significant jump from 35 million in 1980. Teffaha noted that investments in the Arab air transport industry are in excess of US$80 billion and said he hoped that the economic operational flexibility to destinations can stimulate the market “or where the market is ready for that stimulation, that this flexibility is within a level economic playing field, within a framework of minimum constraints on capacity, movement of people and goods and taxation.” He said: “Arab airlines had transported over 75 million passengers in 2006 on a network that covers all the four points of the globe and with revenue passenger kilometres four fold as many as in 1980.” Teffaha said that if living in an unstable environment is the region’s fate, growing and expanding will increase the tourism attractiveness of the Arab region. “Developing the intra Arab traffic to higher horizons, the high competiveness on the Arab airlines and the expansion of its role as national economic pillars are also the destiny of everybody who works in this industry. These are objectives which have to be accomplished in order for the Arab airlines to succeed in dealing with the challenges that the evolution of this industry and the customers’ needs would require it to deal with,” he said. Giovanni Bisignani, director general and CEO of International Air Transport Association (IATA), said: “The industry needs to move forward with a progressive approach to liberalisation. No need to change overnight, but governments must follow up on the vision of a staged approach to liberalisations agreed to at International Civil Aviation Organisation (ICAO) in 2003. “If we work together to make this happen in this region the result will be a financially healthy air transport industry.”

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