Singapore Air Show

Japan urged to lead privatization move

 - February 18, 2008, 10:29 PM

International Air Transport Association (IATA) director general and CEO Giovanni Bisignani has challenged Japan to make the privatization of its airports an example of global best practice. He also wants the country to champion efforts toward a zero carbon emission industry at the upcoming G8 Summit.

Japan is currently debating caps for foreign ownership of its privatized airport assets. “I don’t care who owns the airport,” Bisignani told the international business community there last week. “That is for politicians to decide.”

What he does care about is airports’ provision of adequate capacity with service levels that meet customer expectations at prices that reflect efficiency. And he is looking forward to working with the Ministry of Land, Infrastructure and Transport (MLIT) and the airports to ensure that the world’s largest airport privatization to date will also prove the most successful.

“Providing the right incentives is the most critical part of the privatization process,” Bisignani said. “We have seen too many privatizations fail because governments sold the crown jewels without appropriate guidance and incentives for the new owners. Effective and transparent economic regulation is in the interest of everybody, including the potential new owners.”

Aviation is responsible for two percent of the world’s carbon emissions. IATA’s strategy to address climate change has four pillars: invest in new technology, fly airplanes effectively, build and operate efficient infrastructure, and call for positive economic incentives to encourage improved fuel efficiency and a reduction in carbon dioxide emissions.

The International Civil Aviation Organization (ICAO) endorsed the strategy, along with a target of 25 percent better fuel efficiency by 2020, at its assembly in September 2007. “Now it is time for results,” said Bisignani. “Japan’s plans to implement performance-based navigation systems at its top 20 airports by 2012 will reduce fuel burn by two percent and save 162,000 metric tons of CO2 annually.”

Japan is due to host this year’s G8 summit. “I encourage the Japanese government to push the G8 leaders to aim high and build the political will to achieve a zero-emission industry,” concluded Bisignani. “We went from the Wright Brothers to the jet age in 50 years. If government and industry are aligned, I am convinced that together we can turn dreams into reality.”