26-Aug-2010 8:08 AM

IATA outlines agenda to strengthen Australian aviation

IATA outlined (25-Aug-2010) an agenda for Australian aviation that addresses infrastructure, training, environment and liberalisation. Director General and CEO, Giovanni Bisignani, made the following comments: 

  • Sydney Airport costs: Since 2000, Sydney Airport went from being the 34th most costly airport in the world to the ninth in 2009. That same year, the airport reported an EBITDA margin of 82%, even as the world’s airlines lost USD10 billion. Mr Bisignani stated that although the industry needs profitable airport partners, "they must be effectively regulated so that they do not abuse their monopolistic position". He added that the Productivity Commission’s review of the airport's charges is "an opportunity to re-balance the situation to deliver higher quality with greater cost efficiency";
  • New Sydney Airport: Mr Bisignani stated a decision on a new airport for Sydney is "now critical";
  • Air Navigation: Mr Bisignani noted that Airservices Australia (ASA) has raised high industry expectations with their past success in pioneering the introduction of new air navigation technologies and the five-year pricing plan for 2005-2009. Both were done in close consultation with the industry. He challenged ASA to continue raising the bar by taking the same approach with new capital expenditure projects and the next long-term pricing agreement. According to the CEO, the next agreement must include three key elements: cost reductions to airlines, an agreed capital expenditure programme and "an approach to regional operations in line with the ICAO principle of equality of opportunity and without international airlines subsidising regional operations";
  • Training: Mr Bisignani encouraged Australia to enhance its leading role in providing training to support Pacific Island nations, India and China. He stated the country needs "better coordination on strategy and standards" to maximise economic benefits;
  • Environment: The White Paper supported a global solution to environment coordinated through ICAO. Mr Bisignani called on Australia to take a leading role to "ensure that aviation emissions are managed on a level playing field in a global framework under ICAO", adding that "domestic or regional solutions for aviation and climate change cannot deliver effective results";
  • Liberalisation: Mr Bisignani encouraged Australia to remove outdated ownership restrictions for international aviation. [more]

IATA: “Aviation contributes 500,000 jobs and AUD6.3 billion to the Australian economy. It is critical that the next Australian Government has a solid aviation policy to reap the broad economic benefits that aviation can generate. Australia’s regional neighbours – India and China – are engines of growth, helping Asia Pacific’s carriers to lead the industry’s recovery from the global financial crisis. With a coordinated national policy that builds on the key elements of last year’s National Aviation White Paper, much can be achieved ... We have had over 50 years of studies on a new airport for Sydney. Whether you believe Sydney Airport will run out of capacity in 10 years or 20 years, a decision is now critical. Even 20 years is a tight timeline to build a new airport and the infrastructure to connect it to the central business district. Already 6% of the NSW economic activity is connected to the airport. We need a decision on a plan to maximise the capabilities of the current airport and to determine a location and timeline for the new airport. It is essential to ensure that the airport has the capacity to continue to effectively play its important role in the economy ... Historically, airlines have profit margins of less than 1%, that is not sustainable. To fix this, we need to run this business like a normal business. Australia is a leader in aviation liberalisation. The open aviation area with New Zealand has achieved what the US and Europe could not in their open skies discussions. And the removal ownership restrictions for domestic Australian operations benefited consumers with greater choice and lower prices. These results make the 49% foreign ownership cap for international operators very difficult to understand ... No country knows better the importance of global linkages than Australia. Aviation has played a key role in linking this vast continent internally and to the rest of the world. This agenda for aviation will build a more competitive platform for aviation to deliver even greater benefits to the Australian economy and secure an even more important regional and global leadership role in driving the industry forward,” Giovanni Bisignani, Director General and CEO.

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