Airline woes cast shadow over airshow

Singapore Air Show » 2010
February 1, 2010, 3:26 AM

The 2010 Singapore Airshow opens this morning against a backdrop of dire warnings about the state of the airline industry. The air transport sector needs to change fundamentally from top to bottom if it is to pull out of the plunge it took in the wake of the recent financial crisis, according to speakers at yesterday’s Singapore Airshow Aviation Leadership Summit.

Top officials effectively said that airports, air traffic control providers and other suppliers need to stop ripping off airlines and their customers, and that governments must stop dragging the industry down into a mire of knee-jerk legislation.
The conference heard the following demands: that airports and suppliers need to share the risk and pain of economic downturn with airlines; security should be modernized and streamlined; the use of biofuel should be advanced to meet ambitious environmental targets; and liberalization of market access should be much more widespread.

Delegates also heard that aircraft order backlogs are still too high and that airlines might be restoring capacity too soon after the most recent dip in demand. If this is not resolved, said keynote speakers, carriers will never be able to achieve acceptable yields.

Singapore’s transport minister, Raymond Lim, said aviation has lurched “from one crisis to another for a long time.” For example, the attempted suicide-bombing of a U.S. airliner on December 25 has, Lim said, resulted in “long delays which impact travel demand negatively.

“The usefulness of old rules [that is, Chicago Convention 1944] are being challenged more than ever and now nimbleness and responsiveness is important,” said Lim.
Lim said Southeast Asian countries are trying to make progress through a string of open-skies agreements as they head toward the full regional liberalization by 2015. An agreement between the ASEAN states and China is due to be in place by the end of this year and Singapore itself has become the first nation to sign an agreement with the U.S. to develop a harmonized approach to security.

ICAO Council president Roberto Gonzalez said the United Nations body is seeking a global harmonized approach to the latest security threat. However, he gave no indication as to when this might be achieved and whether agreement might be achieved at anything faster than the snail’s pace at which most ICAO initiatives are executed.

Meanwhile, IATA director general Giovanni Bisignani admitted that the world’s airlines are set to lose another $5.6 billion collectively this year, on top of the $50 billion hit his members have taken over the past decade. He also warned that aircraft use among IATA members had fallen by 7 percent but 1,400 more aircraft are due to join the world’s fleet this year alone. 

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