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Airbus A-380 - Source: Reuters
The European Union, the United States and six other countries
agreed on an agenda for freedom for airlines that could open the
way for mergers and consolidation across the financially troubled
industry.
The International Air Transport Association (IATA), the carriers'
global body that has long sought liberalisation for commercial
aviation, said the non-binding agreement was signed at a meeting it
hosted at Montebello, Canada.
"This is an historic achievement that will help set the foundation
for a financially sustainable global aviation industry," declared
IATA Director General Giovanni Bisignani in a teleconference from
Canada just before the signing.
"One agreement will not change the world. But this is a strong
signal that this industry's future must be realised in a much more
liberal environment," Bisignani said.
The agreement could clear the way for more deals on the lines of
the planned merger between British Airways plc and Spain's Iberia
Lineas Aereas de Espana SA announced last week.
Other signatories of the Multilateral Statement of Policy
Principles - which IATA has dubbed its Agenda for Freedom - were
Chile, Malaysia, Panama, Singapore, Switzerland and the United Arab
Emirates.
Bisignani said that with the 27 EU member countries and the United
States, 60 percent of global aviation was aligned with the key
principles: freedom to access global capital markets, freedom to do
business, and freedom to price services.
Bilateral agreements
Most governments currently enforce 65-year-old rules that are based
largely on many bilateral agreements and bar cross-border
mergers.
The only exceptions result from the EU single market, the latest of
which is the planned tie-up between BA and Iberia which the two
carriers say will give them the scale to ride out recession.
Bisignani noted that IATA had 230 airline members and that there
were well over 1,000 other airlines around the world - a
proliferation that existed in no other industry.
"The rules simply do not allow us to merge and consolidate," he
said, insisting that mergers were essential for an industry in deep
crisis with too many players amid world economic woes and overall
losses expected to be $US11 billion this year.
IATA said a study it commissioned in 12 mainly emerging economy
markets, including some of Monday's signatories, showed freeing up
market access and ownership rules would create over two million
jobs, increase GDP and cut average fares by 38%.
Bisignani, who has promoted the Agenda for Freedom since a
conference in Kuala Lumpur a year ago, said he expected other
countries, including Australia, India, Morocco and New Zealand, to
sign up in the not too distant future.
Recognising that the agreement was not binding, he said the
countries which had signed up on Monday are focused and committed
to seeing its provisions brought into effect.
"They will be the drivers," he added.
