IATA Urges Asia's Greater Leadership Role In Shaping Global
Aviation Industry
The International Air Transport
Association (IATA) Friday urged one of the major players in the
aviation world, Asia, to take a greater leadership role in shaping
what is now a global aviation industry.
Said IATA Director General and CEO, Giovanni Bisignani, "Asia is
a big part of the aviation world. By 2010, intra-Asia traffic will
be the largest market in the world, accounting for one third of the
world's traffic. Critical mass comes with leadership
responsibilities."
At the Asia Pacific Aviation Media Association's (APAMA)
Aviation Lecture in Singapore, Bisignani identified three
opportunities for Asian leadership:
- Technology
- Policy
- The environment
Bisignani also announced a revised industry profit forecast of
$3.8 billion for 2007, with North America $-600 million (which
would be $+4.4 billion excluding restructuring costs); Europe $-2.4
billion; Asia-Pacific $+1.7 billion.
Technology
Labor costs have traditionally given a competitive advantage to
Asian carriers. However, noted Bisignani, European and North
American carriers have reduced those costs over the years: Labor
now accounts for 27% of costs for European and US carriers versus
15% for Asian carriers.
"As the labor cost gap narrows, technology is the key to
competitiveness," said Bisignani.
Electronic ticketing (ET), he said, will save the industry $3
billion. While China is at 95% ET penetration - well above the
global average of 78 percent - the rest of Asia is the same level
as Africa, 68 percent, because of the slow growth of ET in Japan
and Malaysia.
"We will make our 100% target by the end of this year," said
Bisignani, "but it will require a major effort by some carriers to
catch up."
Bisignani also suggested better use of technology to simplify
passenger travel and improve air traffic management.
While some Asian countries already use biometrics for
immigration processing, they focus on local residents and are not
linked systematically.
"Effective systems are needed to handle the additional 250
million passengers passing through Asian airports in 2010. Asian
governments have an opportunity to link their systems to make Asia
a world model for a new way of travel," he said.
Bisignani also urged Asia to lead air traffic management by
implementing cost-effective technologies in line with global
standards.
"Focusing more on aircraft capabilities, we can reduce the need
for expensive and labor intensive ground based facilities, while
improving both safety and efficiency, thus increasing airspace
capacity."
Policy
Bisignani also called on
Asia to develop a regional policy approach to industry issues.
"Governments are responsible for safety. However, not all
governments in Asia are at the same level in safety oversight.
Global standards need to be maintained by all. Asia's governments
need to start incorporating the IATA Operational Safety Audit
(IOSA) into their safety oversight programs in order to drive the
accident rate down."
The 2006 accident rate for Asia Pacific carriers was on a
par with the global average of 1 accident for every 1.5 million
flights. The industry target is a 25 percent improvement by
2008.
He also recognized that airlines need the commercial freedom to
operate as true businesses.
"The future is yours to shape," he said, speaking at the APAMA
Aviation Lecture. "Don't repeat the short-sighted mistakes of
Europe and the US. While the recent US and Europe open skies
agreement was a step in the right direction, it fell short of the
fundamental change that the industry needs. They have lost the
vision that made them natural industry leaders. It's Asia's turn.
But you must think bigger and faster to implement a staged approach
to liberalization that can keep pace with the needs of a dynamic
industry."
Environment
With the average age of the Asian aircraft fleet at 10 years,
compared to the global average of 12, this makes Asia's aircraft
more fuel-efficient and environmentally friendly.
"The challenge for Asia is to ... communicate more effectively
on the environment, and to continue to invest in fuel efficient
technology as the industry grows. Asia also needs to join the rest
of their industry partners in pushing governments for more
efficient infrastructure; manufacturers for more efficient
equipment; and oil suppliers for research into alternative fuels,'
said Bisignani.
"Asia's growing importance is clearly defining a new leadership
role in all aspects of the industry. Asia must develop a leadership
framework to drive a common regional approach with innovation on
all fronts: from the technical issues to fundamental policies.
Aviation is the world's most exciting industry and Asia is the
region that is going to drive it forward," he said.