Sunday, June 7, 2009

IATA's Post-Crisis Flight Plan

KUALA LUMPUR, MALAYSIA - The financial news in the airline industry continues to be glum, but the International Air Transport Association today revealed ambitious plans for the world's airlines notwithstanding the present economic downturn.

IATA's Director General and CEO, Giovanni Bisignani, told hundreds of industry-insiders and media at today's annual general meeting that his organization of 226 commercial airlines has set a goal of carbon-neutral growth for the year 2020. Presently, airlines generate about 2 percent of the carbon gases believed to contribute to global warming; the steadily increasing number of flights has led observers to expect that number to rise to 3 percent if left unchecked. Airlines take a good deal of flack from environmentalists and national governments for not being green enough, so this new target is an attempt by the airline industry to meet that criticism.

How will the world's airlines meet this lofty goal?

According to IATA, it's do-able, provided airlines get support from aircraft manufacturers committed to cleaner aircraft. Airlines wouldn't mind seeing some of the trillion or so dollars being handed out in stimulus plans to develop cleaner biotech fuels. Beyond that, airlines think they can cut back on carbon emissions by flying new, more fuel-efficient aircraft, making greater use of bio-fuels and prodding regulators to create a new "single European sky' to replace the many bilteral agreements and zigzag air routes with one streamlined continental system.

Additionally, Bisignani called for harmonization of airport security measures around the world, so that millions of air travelers can expect the same set of rules and procedures wherever they may roam; that's certainly not the case with today's maddening crazy-quilt of rules.

In his annual state of the industry speech, Bisignani - a free-market champion - also called on governments to lift restrictions on foreign investment and the outright purchase of airlines in other nations. The present regime is antiquated, he argued, and nationalistic restrictions on ownership make it difficult for airlines to raise sufficient capital to operate and upgrade. It's hard to argue with him, especially when considering the crumbling state of transportation infrastructure in places such as the United States, where I live. The U.S. restricts foreign ownership of American carriers to 25 percent, partly for reasons of national pride and partly in the believe that this saves jobs from being lost to overseas carriers.

IATA insists this only harms airlines and thus airline passengers. Bisignani summed it up nicely with this tart observation: "All we want is access to global capital, but old rules stand in the way of a healthier industry. If we cannot pay the bills, saving the flag on the tail will not save jobs.''

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