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Thu, Apr 21, 2005

IATA Chief Demands Tough Reforms

Cites "Critical Need For Change"

Giovanni Bisignani appears to be on a crusade. The director general of the International Air Transport Association is making the rounds in Asia, hoping to convince any government official who will listen that now is the time for reform.

At the Foreign Correspondent's Club of Japan Thursday, Bisignani urged governments to dismantle bilateral aviation agreements, saying the airline industry has "lost its balance" and is in "critical need for change." He was quoted by The Freeman newspaper in Cebu, Philippines.

Airlines, which have suffered $36 billion in losses since 2001, are watching their meager profits being eaten up by taxes and surcharges that are "as sinful as alcohol or tobacco," he told the reporters in Japan. He cited the US, for example: in 1972, the federal government charged an average of 7-percent tax on a round-trip ticket. In 2004, he said, the bite was 26-percent. Last year, that came to $15.8 billion.

And while the airline industry has been deregulated, he said, it is still governed by suppliers -- like airports, air traffic control and providers of navigation services. The fees charged by these monopolies, he said, costs airlines worldwide about $40 billion a year.

"We pay when we fly, land and park," he said. "I do not care who owns the airport or the air traffic control. I care about the standards and the bill. We are in the business and the bottom line matters."

FMI: www.iata.org

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