IATA Seeks New Partnership With Governments

The International Air Transport Association (IATA) called on governments to be stronger partners in maximizing aviation’s economic and social benefits, urging governments to unleash the power of aviation to drive jobs and growth.

“Our industry’s license to grow is earned through working with governments to constantly make flying even safer, more secure, and more sustainable. Now we need an agenda to achieve tax regimes that do not kill growth, regulation that facilitates growth, and infrastructure that can efficiently accommodate growth. Doing so will enable the substantial economic benefits—jobs and growth—that global connectivity provides,” said Tony Tyler, IATA’s director general and CEO.

The remarks came in Tyler’s State of the Industry address at the opening of the 68th IATA Annual General Meeting and World Air Transport Summit. The meeting is taking place in Beijing, China with over 750 industry leaders attending.

Aviation is a key driver of economic growth, jobs, and prosperity, Tyler argued:
    •    In 2011, aviation safely transported some 2.8 billion passengers and 48 million tons of cargo. The value of goods transported by air is estimated at $5.3 trillion, which equals to 35 percent of the value of all goods traded internationally. A recent study by Oxford Economics confirmed that aviation’s contribution to the global economy supports 57 million jobs and some $2.2 trillion in economic activity, IATA said.
    •    Oxford Economics projected that aviation will grow about 5 percent annually to 2030. That would see passenger numbers rise to 5.9 billion and cargo shipments could triple to nearly 150 million tones. This connectivity would support 82 million jobs and $6.9 trillion of global GDP.
    •    If growth is held back by even one percentage point, the global economy would forfeit 14 million jobs and over $1 trillion in GDP contribution from aviation, IATA says.

“Aviation’s benefits are not guaranteed. Aviation is expected to grow about 5 percent annually to 2030. If that growth is held back by even one percentage point, the global economy will forfeit over a trillion dollars and 14 million jobs. Modern economies cannot prosper and create jobs if they are not connected to global opportunities through aviation. And airlines need to be successful businesses—keeping revenues ahead of costs and generating returns for their shareholders—to deliver economic benefits,” said Tyler.

Tyler's agenda for profitable growth included taxes, regulation, and infrastructure:

Taxes: “Excessively taxing aviation makes no sense. Taxes dampen growth—with a knock-on effect on jobs and the broader economy. Bluntly put, making connectivity more expensive destroys jobs and slows economic growth,"  Tyler said.

Regulation: “Sensible regulation that increases safety or enhances competitiveness is good. But too often even the best-intended new regulation can have unintended and damaging consequences,” said Tyler. He noted punitive passenger rights legislation in the United States and Europe as examples of misguided regulation:

“Making airlines pay for the mistakes of governments or incentivizing airlines to cancel flights are the unintended consequences of poorly thought-out punitive passenger rights legislation on both sides of the Atlantic. Airlines don’t want delays. And fines don’t address their root causes. The market forces of choice and competition empower passengers and are the best way to drive up service levels so long as governments also do their part,” said Tyler.

Infrastructure: “Where governments are focused on jobs and growth, the urgency of accommodating the increasing demand for connectivity is crystal clear. You cannot unleash the power of an industry to drive economic benefits unless it has the capacity to grow,” said Tyler, urging reform in infrastructure investment.

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