IATA has called for governments to facilitate the growth of global connectivity by avoiding creeping re-regulation, maintaining the integrity of global standards and addressing a capacity crisis.
The call came in the IATA Director General’s Report on the Air Transport Industry at the 74th IATA Annual General Meeting and World Air Transport Summit in Sydney.
“Smarter regulation needs to counter the trend of creeping re-regulation. Global standards must be maintained by the states that agreed them. And we need to find efficient solutions to the looming capacity crisis,” summarised Alexandre de Juniac, IATA’s director general and CEO.
A creeping trend of re-regulation puts the gains of deregulation – which began in 1978 and ignited the spread of air transport’s benefits – at risk. Citing regulatory actions from around the world, de Juniac noted that regulatory over-reach now includes attempts to prescriptively regulate passenger compensation, seat assignments, the ticket options that can be offered to consumers and prices charged for various ancillary services.
“Regulations must add value. In assessing that, regulators must recognise the power of competition and social media to safeguard consumer interests. Governments should not distort market effectiveness with regulations that second-guess what consumers really want,” said de Juniac.
This is the spirit of IATA’s “smarter regulation” campaign which asks governments to align with global standards, take into account industry input and analyse the costs of regulation against the benefits.
Calling for a “vigorous defence of global standards”, IATA provided examples of how standards have been sidelined, including India’s taxation of international tickets in contravention of ICAO resolutions, and states planning new environment taxes even as the ICAO-brokered Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is about to commence as the global market-based measure for managing emissions.
Moreover, IATA highlighted that the Montreal Convention 1999 still has not been universally ratified nearly two decades after it was drafted. Its modernisations apply in only 130 states. There is also not 100 per cent compliance with Chicago Convention Annex 13 requirements for complete accident investigations. Of the approximately 1,000 accidents over the last decade only about 300 accident investigations have been concluded with published reports.
In addition, Annex 17 of the Chicago Convention sets baseline security requirements, and yet ICAO audits reveal that only 28 per cent of states meet them. Moreover, 37 per cent of states fail on resolutions of security concerns.
IATA is also urging governments to find sustainable solutions to ensure the infrastructure needed to meet growing demand for connectivity.
“We are in a capacity crisis. And we don’t see the required airport infrastructure investment to solve it. Governments struggle to build quickly. With cash-strapped finances, many are looking to the private sector for solutions. But be cautious. Expecting privatisation to be the magic solution is a wrong assumption,” warned de Juniac.
The privatisation of airport infrastructure has not lived up to airline expectations, IATA argued. “Privatised airports are definitely more expensive. But there is little difference in efficiency or investment levels compared to airports in public hands,” said the IATA chief.
The results of airport privatisations run counter to the results of airline privatisation which saw the cost of travel drop dramatically. Airlines do not accept that privatising airports must lead to higher costs. “How can making the transport infrastructure more expensive – which means less competitive – be a legitimate public policy objective?” challenged de Juniac.
While IATA research did not reveal a one-size-fits-all solution to ensure sufficient, fit-for-purpose and affordable airport infrastructure, it did point towards positive experiences for consumers and airlines with variations of corporatisation.