CAIRO: Egypt’s decision to keep airports under government control was praised as a wise decision by the head of the International Air Transport Association (IATA).
“We have to congratulate [Egypt] for the decision to keep the airports under the control of the central government and not privatizing them,” Giovanni Bisignani, director general and CEO of IATA, told Daily News Egypt. “Six to seven years ago, IATA was thinking that it was a good decision to privatize airports, but this experience has been a disaster.”
Bisignani was in Cairo last week to attend the Arab Air Carriers Organization’s 43rd AGM Meeting, where officials addressed the latest innovations and ongoing challenges of the regional and global aviation industry.
In an interview after his meeting, Bisignani spoke to Daily News Egypt about the challenges facing IATA and how to tackle them innovatively with support from local governments.
In countries that have privatized airports, he explained, shareholders have taken advantage of their monopolies and increased usage charges by 10–20 percent each year. “When you have a monopoly you need a regulator,” he said.
Governments in the region had a vital role to play in keeping costs in check and creating the regulatory framework to balance burgeoning long-haul opportunities with short-haul regional liberalization, he said. The expansion of infrastructural development in the MENA region is impressive, Bisignani said. “The Gulf area is leading in the aviation infrastructure field, currently building eight runways,” he said.
“If we look at Europe, you will find that it is so difficult now to build an airport because of environmental reasons or congestion, so MENA has an important role to play.”
In the UK, for example, a decision to build a runway had been pending for 10 years before it was finally rejected.
He praised Tunisia’s decision to eliminate its 10 percent import tax on jet fuel — a decision that came after IATA intervention because it conflicted with the Chicago Convention.
Bisignani urged the region to set correct precedents with privatized infrastructure.
“We are now working with Jordan to curb unilateral increases in taxes and charges that followed the privatization of its airports.”
To remain competitive, he advised regional governments to take a more proactive approach to liberalizing air space, often seen as a major challenge to growth.
“I see cutting-edge examples of liberalization, as key markets such as Morocco, Jordan and Tunisia built open-sky agreements with Europe. The Damascus Convention of 2004 provides a framework for regional liberalization, but the number of countries ratifying it is disappointing,” said Bisignani.
Egypt has been successful in terms of efficiency, he said, citing the new runway which allows planes to fly directly into and out of the desert, decreasing environmental concerns.
“The region’s rapid growth must be accompanied by a strong safety record,” said Bisignani, who challenged MENA governments to adopt IATA’s two safety audits — the IATA Operational Safety Audit (IOSA) and the IATA Safety Audit for Ground Operations (ISAGO) — as part of national requirements.
Egypt was the first government in the world to mandate IOSA, joined later by many MENA countries including Lebanon, Syria and Bahrain, and soon Jordan, he said. Today, 35 MENA carriers are on the IOSA registry, including all 26 IATA members.
MENA has also taken a leadership role on ISAGO. Lebanon will make it mandatory for ground handlers from June 2011 and 13 ground handlers in the region are already on the registry, according to IATA.
The region’s hull loss rate for Western built aircraft slipped from zero accidents in 2006 to 3.32 accidents per million flights in 2009, according to an IATA statement. According to Bisignani, “at 4.6 times the global average of 0.71, this is a concern.”
He cited the process of developing a “sophisticated audit process for safety on planes, the IATA Operational Safety Audit” — an idea first met with concern from IATA’s board, fearful of losing members who do not meet the “tough” requirements. But at the time, he was adamant that this internal audit must be a condition for membership if IATA was to take its safety commitment seriously.
“IATA eventually had to terminate 22 members who did not meet requirements, after a two-year period where the association offered free consultancy to potential members on improving safety, we had to acknowledge that a target was a target and those who did not meet requirements had to go,” Bisignani said.
He noted the outcome of the 37th Assembly of the International Civil Aviation Organization (ICAO), which placed aviation ahead of all other industries in dealing with climate change.
“Governments confirmed ICAO’s leadership role in managing aviation emissions and agreed on a collective aspirational goal to improve fuel efficiency by 2 percent by 2050, while capping emissions from 2020 with carbon-neutral growth.”
They also agreed to develop a framework for economic measures that minimize market distortions, treat air transport in line with other sectors, ensure that emissions are accounted for only once,” said Bisignani.