Propelled by the desire to ensure that investors in the aviation industry continue to derive good dividends especially in 2018, the International Air Transport Association (IATA) has called on stakeholders globally to agree on a set of common principles that would now guide the industry operations.
Speaking at Aviation Day USA organised by IATA and the Wings Club, IATA’s Director General/CEO, Mr. Alexandre de Juniac, lamented the poor state of aviation infrastructure in many countries of the world, noting that the trend had dire impacts on the growth of the industry.
“Aviation is the business of freedom. It liberates us from the constraints of geography, distance and time, enabling us to lead better lives, and it makes the world a better place. To ensure that the business of freedom continues to grow the benefits it generates, we must be guided by five core principles,” he added.
Alexandre de Juniac, who listed poor infrastructure as one of the factors limiting the development of the industry noted that, “infrastructure development was not keeping pace with growth in demand for flights.” He said that IATA forecasts that 7.8 billion passengers will travel globally in 2036. That is nearly double the 4.1 billion who flew in 2017.
“To meet that demand, we need sufficient capacity in terms of runways, terminals and airspace. Quality must be aligned with our technical and commercial needs, and it all must be affordable.
IATA also reiterated its broader concerns on governments, like Nigeria, looking to fund airport infrastructure development through privatisation. “We have yet to see an airport privatisation that has, in the long-term, delivered on the promised benefits of greater efficiency for airlines and a better experience for our customers,” he said.
“To date, there has been no regulatory formula that effectively balances the interest of private owners to earn a profit with the public interest to have the airport serve as an engine of economic growth. By all means, invite private sector expertise to bring commercial discipline and a customer service focus to airport management, but leave ownership in public hands,” added de Juniac.
The diversion of federal fees and taxes intended for aviation-related infrastructure spending is also a cause for concern, said the IATA boss. “About 21 per cent of the average domestic ticket cost is taxes and charges. And instead of funding much needed aviation investments, too much of this money is being spent elsewhere,” he said. In Nigeria, airline operators have bemoaned the multiplicity of taxes paid to various airport and regulatory agencies, yet without tangible evidence seen in infrastructure development to support their business.
“It’s bad enough being taxed like a sin. It is unbearable to have those taxes spent elsewhere,” lamented de Juniac.
IATA also encouraged further rationalisation of the regulatory environment in the industry to remove barriers to innovation. “Aviation is being challenged by the digital revolution and constant innovation is critical to survival. Often, however, governments create regulatory barriers to innovation. Governments must avoid creating barriers to market innovation,” said de Juniac.
IATA also stressed the need for all operators to strive for safe operations. “We must be safe and we must always strive to be even safer. Aviation must thrive on partnership and cooperation, supported by global standards. Lastly, aviation must be sustainable, both environmentally and economically,” the IATA boss said.