IATA Blasts UK Aviation Policy

The International Air Transport Association (IATA) urged the British government to improve its global competitiveness in air transportation. The airline association urged a global approach to aviation and climate change, reducing taxes, changing the economic regulatory structure for airports, and developing a proper strategy to safeguard the economic benefits of aviation.

"The UK has a great tradition of leadership in aviation. But any industry can only take so many knocks before the damage is permanent," said Giovanni Bisignani, IATA's director general and CEO, in a speech in London. "I respect the UK for its historic role but to write a successful next chapter, we must say ’basta.’ (Stop) The government’s policy pillars of excessive taxes, inefficient airport regulation and limiting growth will destroy the UK’s proud aviation legacy."

Bisignani noted that aviation supports about 1.5 million UK jobs along with $76 billion in economic activity.

"Aviation provides critical global connectivity to this island nation. It is a great mystery to me why the government seems so intent on destroying its competitiveness with a policy agenda stuck in the past," said Bisignani.

To support aviation’s economic benefits, he called for urgent policy action in several areas. IATA said the World Economic Forum’s Travel and Tourism Competitiveness report ranks the UK last out of 133 countries for cost competitiveness, 129th on fuel prices, and 121st on ticket taxes and airport charges.

"The economic regulatory model for airports is broken and must be urgently fixed," said Bisignani, who called London Heathrow a "secondary hub."

Bisignani also called for better preparedness for severe weather in the wake of major airport shutdowns in December: "The inconvenience to passengers and the paralysis of the UK economy for many days is unacceptable from any perspective. Shoveling snow is not the airline’s responsibility. The financial losses they suffered must be compensated, and we must approach next winter with a better plan," said Bisignani.

IATA’s Bisignani also criticized the UK government for taking an isolated and punitive policy approach to managing aviation’s emissions, particularly with the Air Passenger Duty now standing as a GBP2.7 billion burden on the industry.

Bisignani’s calls for renewed competitiveness came at the start of what is expected to be a second consecutive year of profitability for the airline industry, albeit weak, following major losses over the last decade. Following a $15.1 billion profit in 2010, IATA is predicting that global profits will shrink to $9.1 billion in 2011.

Visit www.iata.org.


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