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IATA seeks less restrictions for Aviation industry

Governments should extend the aviation industry the same opportunity like others in running its business especially during difficult times like this, says the International Air Transport Association (IATA).

Director General and Chief Executive Officer, IATA Giovanni Bisignani said the aviation industry was not asking for bailouts, but just some ease in restrictions of growing the business.

He said in any other industry, the product could be exported easily. But in the aviation industry, the product is a route or a connection which needs to be preceded by an international treaty.

“That is the rule of the game which was set over 65 years ago at the time of the Chicago Convention. They are not something that makes sense today,” he told a media briefing here in conjunction with the upcoming IATA annual general meeting (AGM) next Monday in Kuala Lumpur.

Bisignani said there were many cases where big funds from the Middle East had come in to support and invest in banks, but this cannot be the same for the airlines because many countries have a foreign ownership limit of 20-25 percent.

“We are not asking for support, we are just asking for opportunity to run this industry as a business. We don’t have that kind of freedom,” he said.

“At the moment, it is difficult for the industry. We are tied-up because we can’t sell our products where the market is and we cannot take advantage of international funding.”

Describing the situation as emergency for the industry, he said it was time for governments to wake up.

Too often, governments don’t understand the role of this industry which represents eight percent of global Gross Domestic Product while 32 million workers are involved, he said.

The AGM this Monday is expected to be graced by Prime Minister Datuk Seri Najib Tun Razak who would be addressing delegates as part of the meeting’s formal opening while Singapore’s Minister Mentor Lee Kuan Yew would also be holding a special dialogue session.

“The air transport industry is once again meeting in crisis, this time as a result of the global financial meltdown. We are honoured that the Prime Minister and the Minister Mentor will provide their insights at this critical time,” Bisignani said.

Asked why Malaysia was chosen, he said the AGM was held around the world and this country made sense for the industry.

“Malaysia is a very successful story, and so is its Kuala Lumpur International Airport, and the government is a with a leadership that understands the industry’s needs.

“Malaysia Airlines is our host, Datuk Seri Idris Jala is on our board and the airline’s strong turnaround is a great example and inspiration for many airlines,” he said.

Bisignani said Najib also understood the needs and supported the aviation industry, having decreased the airport charges in Malaysia.

He added that Lee was also a unique leader on aviation, as the success story of Singapore Airlines and Changi Airport represented the success story of a great country.

“A great airline and airport was instrumental for the development of Singapore as a major economy of the world. It will be an inspiring lesson for us, using history to look forward,” he said.

Although the last AGM held in Istanbul, Turkey last year was centred on rising fuel prices, this time it is different, he said.

“Here we face demand shock where traffic is disappearing and cargo has never been so down. Fuel is not a problem, because we are now caught in the biggest recession after the Great Depression,” he said.

Bisignani said the AGM would also discuss on potential savings by the industry and the efforts needed to get it done.

He said last year the industry celebrated the use of 100 percent e-ticketing and worldwide deployment of common-use kiosk and check-in, of which produced a combined savings over US$4 billion.

“But we are planning to implement activities to simplify business that would save the industry over US$10 billion,” he said.

Another important issue is e-freight of which the aviation industry handles about 37 percent of global freight value.

“It has less appeal than e-ticketing, but very effective because we handle an enormous amount of freight and each freight is accompanied by roughly between 15-60 pages of paper like Customs.”

“We are taking away the paper from the process, meaning we are working with airlines, shippers, customs, freight forwarders. It is a complicated issue but it can bring savings of about US$4.9 billion,” he said.

On the issue of climate change, Bisignani said the aviation industry represented two percent of carbon dioxide (CO2) which IATA took very seriously although it is a small number.

“This Monday we will show our achievement in a short period of time in reducing Co2 via infrastructure, operations and economic measures.”

“We probably will have those 3rd generation biofuels registered and certified by 2011, where planes can fly with jetfuels and biofuels blended at 50 percent. We will show what we have done and what are our plans for the future of the environment,” he said.

Bisignani said despite the bad numbers in the industry, its environmental performance was improving.

“Our emission this year will fall by seven percent. Of that, five percent is because less planes are flying due to recession and another two percent is due to implementation of effective measures,” he said.

Virgin Atlantic pre-tax profits rise to £68.4 million

Virgin Atlantic pre-tax profits increased to £68.4million during the last financial year, up from £34.8 million the year before.

The strong results cover the period March 2008 to February 2009 and reflect an increase in the number of premium travellers choosing the airline, as well as prudent management decisions taken during the most volatile trading conditions in the airline’s 25-year history- where oil prices peaked at $147 per barrel and subsequently dipped as low as $38 per barrel.

Group sales, including leading tour operator Virgin Holidays, rose 8.4 percent from £2.380 billion to £2.579 billion. The total number of passengers carried during 2008 increased to 5.77 million.

President of Virgin Atlantic, Sir Richard Branson said “The last financial year has proven to be the most volatile yet in our 25-year history.

To increase profits against a backdrop of such a severe recession is an excellent achievement by all of our staff at Virgin Atlantic.”

Chief Executive,Virgin Atl-antic,Steve Ridgway, said “We are winning market share from our competitors during the toughest trading environment ever. With some of the lowest fares ever, consumers have never had it so good for so long. Our load factors remain resilient as travellers take advantage of these bargain fares, proving the value of vigorous competition.”

Virgin Atlantic also highlighted that the plans by BA and AA to effectively merge are not in the interests of consumers. Both airlines overlap on some of the most popular airline routes in the world - to and from London Heathrow - and their proposals would mean less competition on key routes, such as Heathrow-New York JFK, Heathrow- Boston, Heathrow-Miami, Heathrow-Chicago, Heathrow-LA and Heathrow-Dallas Fort Worth.

Throughout the last financial year, Virgin Atlantic continued to scoop many key awards for its products and services.

Its flagship Heathrow Clubhouse has won several awards for being Best Airline Business Lounge; Skytrax and Business Traveller named the airline’s Premium Economy cabin as the best in the air; while Virgin Atlantic was also chosen as the Best Scheduled Airline to the US at the Travel Weekly Globe Awards.

Virgin Atlantic will celebrate its 25th birthday on June 22 .

Paris Air Show wanes as Business Aviation venue

Look around at the 100 Anniversary celebration of the Salon Du Bourget, better known as the Paris Air Show, and you’ll see fewer business aircraft on display this year.

That’s because Paris, while having great allure and tradition, just isn’t as cost-effective as a venue to meet with business aircraft customers as newer specialty events, such the European Business Aviation Convention and Expo [EBACE] in Geneva and the Middle East Business Aviation show in Dubai, according to many general aviation manufacturers. These two new signature events are draining enthusiasm for participation at Paris by business aircraft manufacturers because they target a narrow range of business aviation customers rather than trying to be all things to all stakeholders.

One high level Dassault employee said the main reasons that Dassault still exhibits business aircraft at Paris, such as Falcon 7X, 2000LX and 900LX, are tradition and image rather than bottom line results.

EBACE produces considerably better results for the Falcon Jet product line than Paris, according to the same source, but it just wouldn’t be proper for Dassault not to exhibit its full lines of both civil and military aircraft on home turf.

Smaller European business aircraft firms, such as Daher-SOCATA, Piaggio and Vulcanair, continue to exhibit at Paris. And Bombardier, Hawker Beechcraft and Embraer will have a business aviation presence at Le Bourget.

But, don’t think that Cessna’s and Gulfstream’s pulling out of the Paris Air Show is an anomaly. As EBACE and MEBA, along with NBAA, and other business aviation specialty events continue to grown in importance, it’s been at the expense of the Paris Air Show and other huge, broad scale air shows. Paris is nearly unbeatable as a sales forum for commercial airline and military customers. It’s one of the few big events where potential customers can see the equipment in which they’re most interested.

However, business aviation customers have many other events where they not only see, but they can touch and fly airplanes they might buy without having to thread their way through two hours of road traffic twice per day and weave through throngs of people collecting souvenirs. And it’s not unusual to spend upwards of a million dollars to participate in the Paris Air Show if you’re taking a fleet of demonstrator aircraft from outside Europe, plus flight and cabin crews, along with sales and support staff.

Count the number of business aircraft at this year’s Paris Air Show and compare it to the 2005 and 2007 gatherings. You may see a trend emerging.



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