“AIRLINES MUST RESTRUCTURE FOR PROFIT”

“The fundamental laws of economics have not changed – and our industry should better manage itself accordingly,” said IATA Director General Pierre J. Jeanniot, at the opening of the Airline Financial Summit 2001 in New York, 5 April.

The Director General was commenting on the increasingly frail profitability of the air transport industry, caused by competitive pressure on yields, the large cost increases imposed by higher fuel prices over the past two years and the slow impact of the e-commerce revolution on airlines’ marketing costs.

“But there are more fundamental problems,” continued Jeanniot. “Only a profitable airline industry can deliver the type of price/quality ratio the consumer expects. Increased consolidation is required but is being held back by out-dated bilateral treaty provisions and archaic foreign ownership rules. These anachronisms are preventing a more efficient and consistently profitable structure to emerge.”

“Then - whilst airlines have been privatised, many airports and most ATC facilities remain as government monopolies, with perennial inefficiencies and capacity shortages. In some parts of the world, airports that have been privatised have been regarded as licenses to print money, in the absence of independent watchdog authorities.”

Jeanniot concluded his address by welcoming the Private/Public Partnership to run the UK National Air Traffic Service. “…and I see that the UK NATS is keen to cooperate, quickly, with adjacent ATC service providers. A hopeful step towards an efficient European ATC single sky !”