Home' Asian Aviation : AAV October 2010 Contents 12 AsianAviation | OCTOBER 2010
In some organisations, the very suggestion of
the boss leaving is enough to send shockwaves
reverberating around the markets.
Steve Jobs, the revered leader of Apple is a
well-known example. Jack Welch, who helmed
General Electric for 20 years, was another. And
so is Giovanni Bisignani.
In his eight years as director general (the grand title
he dislikes) and chief executive (the one he prefers) of
the International Air Transport Association (IATA),
Bisignani has made the once-exclusive club of mainly
former national flag carriers an innovative force in
the aviation world. He bangs heads together to reach
speedy consensus, rather than leaving decision-making
to committees. Furthermore, he has no qualms about
courting controversy when necessary to further the
In short, Bisignani has made IATA relevant again.
us, when he announced in June that he will step down
at the organisation's next annual general meeting in Cairo
in June next year, there was a some trepidation among the
230 member airlines.
Bisignani is using the remaining ten months of his rein
to hammer home some key policy issues he feels remain
In an address to the Australian National Aviation Press
Club in September, he began his farewell tour of the
world with a customary ticking o of his host country.
e target this time was the lack of progress on a badly-
needed second airport for Sydney.
Since 2000, Sydney airport went from being the 34th
most costly airport in the world to the ninth in 2009,
he said. at same year, the airport reported a pro t
margin of 82 percent, even as the world's airlines lost
"We need pro table airport partners. However, they
must be e ectively regulated so that they do not abuse
their monopolistic position," Bisignani said.
e famous doomsayer then launched into a negative
reading of the latest passenger and freight tra c gures,
which showed a more modest recovery in July than they
had done in June -- a classic Bisignani tactic to underpin
his calls for industry reform.
Top of the IATA chief 's priority list for some time
has been further liberalisation. is time attering his
audience, he said that while Australia and New Zealand
had been pioneers in aviation liberalisation, going further
even than the European Union, they should now use
this moral high ground to encourage others in the Asia-
Paci c region to remove ownership restrictions.
"Historically, airlines have pro t margins of less than
1 percent. at is not sustainable. To x this, we need
to run this business like a normal business," he said.
" e removal of ownership restrictions for domestic
Australian operations bene ted consumers with greater
choice and lower prices."
But Australia still retains a 49 percent foreign
ownership cap for international operators, which
Bisignani said is "very di cult to understand".
Much of the problem stems from adherence to the
original Convention on International Civil Aviation, the
Chicago Convention, which placed sovereignty over air
travel in the hands of governments. Bilateral air ser vices
agreements were framed in the context of the Second
World War, and so governments were understandably
risk-averse and keen to protect their edgling national
" e rules of post-war Europe and America are no
longer relevant," Bisignani said. "Let's take a risk: let's
forget the Chicago Convention and instead draw up
a new set of rules."
A good place to start would be among IATA's
members, which together account for 93 percent of
scheduled international air tra c. Many, especially
those enjoying protection of one form or another
from their governments, are reluctant to reduce the
artificial barriers afforded them by restrictive air
services agreements, he ventured. is has to change
and airlines themselves, especially in Asia, need to push
for the potential of open skies if governments are to
listen and strike deals on a regional or even global basis,
Recovery is coming, with IATA forecasting a global
pro t of US$2.5 billion this year, much of which will
originate in Asia, where growth is strongest, he said.
But recovery would be much steeper if the industry
were restructured, and airlines could be enjoying pro t
margins of 10 percent.
is view is central to Bisignani's blueprint for the
aviation industry in 40 years time, 'Vision 2050'. He
foresees a reversal of the current situation with airport
landing fees, with terminal operators instead competing
to attract carriers with cash incentives.
e scrapping of ownership restrictions will allow
true global players to emerge through consolidation and
fatter pro t margins will make air travel less prone to
cyclical demand. "It's a future where aviation is bu ered
against other shocks," he said.
Vision 2050 follows on from another Bisignani
initiative: to proactively chase an aggressive target of
halving aircra emissions by the same date. "Aviation
can be proud of its e orts in this area. We started a bit
late but once we started we can be proud of the numbers
we've achieved," he said.
Today, aircra manufacturers, airlines and engine
makers are all working together to improve fuel
e ciency by an average of 1.5 percent per year to 2020,
he said. IATA's goals go beyond that: to stabilise carbon
emissions from 2020 with carbon-neutral growth and
then halve emissions from 2005 levels by 2050.
Bisignani delivered the airline industry's pledge
at the United Nations Framework Convention on
Climate Change in Copenhagen last December, much
to the astonishment of his largely anti-aviation audience.
" ese goals clearly show that the aviation industry is
even ahead of its regulators in its approach to climate
change," Bisignani said at the time.
Whether such a bold step will be achievable without
the forceful personality of the former Alitalia boss at
IATA's helm remains to be seen. n
IATA's Bisignani makes
final liberalisation push
Justin Wastnage / Sydney
leader, is preparing
to step down next
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