CAIRO: The status of the global aviation industry is “both very important and very fragile,” the head of the International Air Transport Association said Wednesday in Cairo.
Giovanni Bisignani, director general and CEO of IATA, was in Cairo this week to attend the Arab Air Carriers Organization’s (AACO) 43rd AGM Meeting, where officials addressed the latest innovations and ongoing challenges of the regional and global aviation industry.
Speaking at a media roundtable, Bisignani and associates spoke of the highs and lows witnessed over the past decade, while outlining measures being taken to incorporate new business schemes into the aviation enterprise.
Bisignani said that combination of necessity — absolutely “everyone flies” — and risk imposes a particular pressure on the business, as the industry continues to wrestle with losses that date as far back as September 11, 2001. On a global scale, revenue initially dropped $22 billion, and did not begin recovering until after three or four years.
Still in 2009, IATA records saw $62 billion losses. The industry has experienced some turbulence over the past couple of years, taking a hit with the global economic crisis, the H1N1 epidemic and most recently with the volcanic ash cloud in April of this year — which alone meant around $1 billion in losses.
But aviation leaders were still willing to take risks. IATA persevered and overcame the implications of an “unprofitable incident in a profitable time,” seizing opportunities to lead the industry to gains in 2010 totaling $560 billion.
Bisignani said Cairo was chosen for the AGM conference because of Egypt’s record in implementing effective policies, citing Cairo International Airport’s fairly new terminal as “a good symbol of progress.”
Egypt’s ability to rebuild its aviation, strengthen its network and social alliance and increase profitability has attracted international investment. National carrier EgyptAir is looked to as a success story in the region, namely with recent improvements and its inclusion as a Star Alliance memeber.
In the MENA region, issues of safety and government regulation are at the forefront of discussions. The region’s burgeoning budget airlines such as Fly Dubai and Air Arabia Egypt indicate the demand for increasing air traffic, increased frequency of traffic, and passenger demand for lower airfares.
However, rapid growth is inhibited by air space restrictions in a region where 60 percent of fly zones are reserved for military use. AACO is currently engaged in implementing regulations to redesign airspace boundaries — especially pertinent in the Gulf — to facilitate more effective routes. Additionally, efforts are being made to further incorporate Iraq into the regional networks.
As CEO, Bisignani has witnessed nearly a decade of the industry’s triumphs and woes. The global aviation industry continues to adhere to regulations set in 1945, designated through discussions between the United States and Europe in an era where the threat of foreign attack by air was imminent. The result today is a global commercial enterprise motivated by defensive policies over profitable gains or new world innovations. For Bisignani, this means boundaries that must be continuously pushed and reinvented to cater to contemporary demands.
By listening to demand and seizing on pressing issues such as climate control and bio fuel pollution, IATA and AACO are constantly innovating: the European skies alliance came about through a campaign headed by Bisignani, in which comment cards were placed in airplane seats, prompting airlines to respond to an overwhelming request by passengers to eliminate tedious customs between European countries. Another example is the environmentally-friendly e-ticket.
On the aviation industry as a whole, Bisignani remains hopeful but realistic: current numbers indicate encouraging growth for the future; still, “if necessary steps are not taken, it may remain in survival mode forever.”
