A global business such as the air transport industry needs to adopt a so-called global mindset to thrive in an environment where too often parochial concerns lead to counterproductive action and policy, International Air Transport Association director general and CEO Tony Tyler asserted during his group’s annual general meeting (AGM) in Doha on Monday.
“The key to unlocking aviation’s future potential is a global mindset supported by strong partnerships,” said Tyler during his State of the Industry address in Doha. “Aviation connects people and business to make ‘global’ possible. Securing aviation’s future begins with some immediate challenges. Airlines must be profitable, safe and secure businesses. We need to provide efficient, customer-focused services. And sustainability must be integral to everything that we do.”
Much of that effort needs to involve what Tyler called the building blocks of global connectivity—namely, cost-efficient airports and air traffic management infrastructure. “In Europe, there is paralysis on the Single European Sky,” he said. “While the European Commission is pushing, member states are more interested in protecting revenue streams and government jobs. So passengers, the environment and the European economy all suffer.”
Tyler also drew attention to concerns over airspace congestion in the Persian Gulf, the structuring of public-private partnerships for airport development in Asia and Latin America, and the failure of the U.S. government to prioritize investments in the NextGen air traffic management initiative.
Meanwhile, Tyler called for a reversal of what he termed the “dismal failure” of the “light handed” approach to the economic regulation of infrastructure. Tyler stressed the need for well established international norms for airport charging regimes as a counterbalance to raw market forces.
Conversely, the IATA director also complained of the impediments to growth and profitability posed by governments that fail to consider long-term effects of poorly considered tax regimes and associated regulation. Tyler cited the acknowledged economic damage caused by the UK’s Air Passenger Duty; the specter of consumer protection regulation in the U.S. that threatens to reverse plans to allow cellphone usage on aircraft; Ontario, Canada’s latest budget proposal that would double the tax on jet fuel; and an increase in protectionist measures worldwide that pander to local interests at the expense of long-term job creation, economic growth and inward investment.
“The Venezuelan government takes the top prize for willful irresponsibility,” said Tyler. “It is wrongly withholding some $4 billion of airline funds and putting the country’s connectivity at risk. It’s not surprising that some airlines have stopped flying there. Airlines cannot provide a service if they don’t get paid…I again urge the government to resolve this quickly and fairly.”
Venezuela requires airlines to sell tickets in its local currency, the bolivar, but government monetary controls have delayed repatriation of the funds, prompting several airlines to cut or suspend service to the country.