Liberalising the region

IATA’s CEO and director general Giovanni Bisignani called for greater freedom to do business under air liberalisation in the Middle East region.He spoke a lot of sense at last month’s 39th Arab Air Carriers Organistion AGM held in Kuwait.

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By  Barbara Cockburn Published  December 4, 2006

|~||~||~|IATA’s CEO and director general Giovanni Bisignani called for greater freedom to do business under air liberalisation in the Middle East region.He spoke a lot of sense at last month’s 39th Arab Air Carriers Organistion AGM held in Kuwait. “We cannot rely on a 60-year-old bilateral system that requires governments to negotiate our markets. This worked in the 1940s when we had nine million passengers flying government-owned airlines,” he said. There is no space for a government-owned airline now that there are two billion passengers a year traveling across the globe. Bisignani said: “To fill the airports of the future you will need maximum flexibility to develop new markets. Liberalisation must be part of that equation. It stimulates traffic and is a catalyst for economic growth.” But according to one delegate, Bisignani’s words caused a ruffling of feathers. He thought Bisignani’s comments will not have won him any allies. But Bisignani did not seem too worried to have learned this. He said: “I’m being frank and honest. If I’m not, nothing will get done.” Is it not ironic that AACO’s AGM was held in Kuwait – a place where the government owns the airline and refuses to help it grow and profit? Last year the government opened the industry to competition and Marwan Boodai’s entrepreneurial Boodai Group stepped up to the mark and launched low cost carrier Jazeera Airways which last month celebrated its first anniversary. Kuwait Airways Corporation chairman and managing director, Sheikh Talal Al Mubarak Al Sabah, talked frankly to journalists after the AGM about his frustration with the government’s reluctance to make further progress on the airline’s privatisation and will not invest any money in the airline which, he said, is making “huge losses”. “Liberalising the market was a positive move,” he said, adding that KAC has to operate like a private company by not relying on the government for support. One AACO delegate predicted that Kuwait Airways will only last another 18 months or two years because the “stubborn government” will not fund its own airline. “It’s just my opinion but KAC is making losses, so how can it make profits? Kuwait’s got Jazeera Airways and another airline will launch, soon I think,” he said. “I predict that the government will let KAC die out. But if the government would invest some funds in its airline, then the the project could be a good case study of how to liberalise a national and state-owned airline.” ||**||

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