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14 Nov, 2005

Airports To IATA, Take A Hike

AUCKLAND — Airports Council International, which represents the interests of over 1,530 airports in 175 countries and territories, is to recommend to its members that they cease involving the International Air Transport Association (IATA) in discussions on user-charges at global airports.

A resolution to this effect passed at the ACI General Assembly in Auckland on November 7 will give Thailand’s airport authorities grounds to reject the future involvement of IATA in assessing the costs to be paid by airlines at Suvarnabhumi airport.

IATA, the global grouping of airlines, has been targetting airports as part of efforts to help its members save US$1 billion in industry taxes, charges and fuel fees.

In a speech at the IATA annual meeting last May, IATA Director-General Giovanni Bisignani said: “We pay US$42 billion each year to airports and ANSP’s (air navigation service providers). That is 12% of our costs. Airlines don’t expect a free ride. But, like travellers, we demand value for money. The days of ‘we spend and airlines pay’ are over.”

In response, his airports counterpart, ACI Director-General Robert Aaronson told his members last week that the days of talking to IATA on this issue are also over.

He said that while he had favoured adopting “a positive approach to airport-airline relationships to resolve our differences” based on a “partnership attitude to reach commonly agreed solutions…that relationship has not worked in many locations.”

“IATA has aggressively, and not very accurately, relied on rhetoric and media pressure to inflame charges negotiations that should be straightforward business negotiations.

“In fact the best and speediest agreements have been made where IATA had no role, and where airports engaged in direct discussions with airline customers and the boards of airline representatives. We can no longer rely on IATA as a serious industry partner when it comes to business issues.”

The resolution passed by the ACI general assembly said: “ACI recommends that its members negotiate user charges and other business matters directly with individual airlines and groups of airlines (e.g. boards of airline representatives) but not with IATA. Continued engagement with IATA too often will lead to unsatisfactory outcomes for airports, whereas airlines may be more sensitive to local economic, political and cultural issues.”

In the coming year, Mr Aaronson said, he would advocate a “new approach” that would rely more on the recommendations of a newly launched ACI members’ advisory service on user charges.

ACI would also work with the International Civil Aviation Organization to set up joint courses on user charges to “assist airports in understanding and applying the ICAO standards. We also plan to develop global economic performance benchmarks under the leadership of the ACI World Economics Standing Committee,” Mr Aaronson said.

He said that while the ACI needs “to move away from IATA in the area of business relationships, I want to emphasize that our successful and essential partnership in areas such as security, facilitation, and technical matters must be maintained.”

He chided the airlines for not getting their own house in order, saying that “sick customer airlines create significant uncertainties and difficulties for airports.”

“Airports operate in a tough market. Many (but far from all) of our airline partners are sick. Some suffer from high cost curves dictated by high labour costs and exacerbated by the spike in fuel prices.

“But there are also structural problems caused by continued reliance on outmoded business models and a resistance to adapt to a changing marketplace. Even IATA admits that all carriers must reinvent themselves as ‘low cost carriers’.”

He noted that airports, too, were competing strongly with one another to attract traffic.

“Here in the Pacific region, for example, Tokyo, Incheon, Hong Kong, Singapore, Bangkok and Kuala Lumpur, compete for transfer traffic. And in the past two years, Dubai has also become a key transfer point between Europe and Oceania, competing for some of the same business.

“There is also strong competition from other transit modes, particularly fast rail in Europe and Japan, and the automobile on shorter sectors in both Europe and the U.S. Airports also compete for cargo services, both all-freighter services and express parcel services.”

Mr Aaronson noted the board’s strategic plan emphasized five major areas for ACI to focus its future activities:

<> Increased communications on global airport issues through strengthened presence at ICAO and through a proactive media outreach;

<> Serving as the primary source of statistics and forecasts on the airports industry;

<> Knowledge sharing, information and assistance to ACI members, including training activities;

<> Support to the regions, with special emphasis on developing nations;

<> Forums for interaction and exchange between airport managers and world class businesses.

Referring to the growing fear of a worldwide avian flu pandemic, he said that ACI has been in close contact with the World Health Organization (WHO) “to ensure that we remain on top of this issue, so that we can react speedily as guided by the WHO and national health departments.”

“There is no need for exaggerated reactions, nor has the WHO issued any travel warnings at this time. They will advise us immediately of any status change that requires action on our part. Our experience with SARS showed that airports can implement preventive measures quickly and that preparedness is a key to effective containment.”

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