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Auckland Airport labelled greedy

Published: 6:28AM Wednesday June 06, 2007 Source: Newstalk ZB

Auckland International Airport has been labelled greedy at an international airline conference in Canada.

The 600 delegates at the International Airline Transport Association's Annual General Meeting in Vancouver have heard that the airport companies for Auckland, Sydney, Hong Kong, Seoul and Johannesburg have returned profit margins of more than 40%, while airlines have seen their cost saving measures wiped out by the increased costs airports are charging for landing.

Bangkok, London and Paris were also criticised for adding $US1.4 billion to airlines' bills.

IATA director general and CEO Giovanni Bisignani says too many airports still operate as "happy monopolies."

He says while commercial discipline is the regulator for airlines, airport regulators can be described as "phantoms" as they are notably absent. He says airports are living a dream with their healthy financial results, while airlines, which have to pay the landing bills, are living a nightmare.

Bisignani also told the conference that 2006 had been the safest year ever in the skies.

He says in a decade the airline industry has cut the accident rate in half to one accident for every 1.5 million flights. He says IATA members (which in the Pacific region include Air New Zealand and Qantas) did even better with one accident for every two million flights. He says the figures prove flying is the safest way to travel.

IATA has a target to lower the accident rate a further 25% by 2008.

Bisignani spoke of the challenging environment for airlines. He says airlines nearly broke even in 2006 and expect to make $US5 billion this year. He says five years ago, it was a very different world with companies needing an oil price of less than $US20 per barrel to break even and faced tough new low-cost competition.

To this backdrop, airlines increased labour productivity by 56%, brought down costs by 28% and reached aircraft load factors of 76%, a record high.

Bisignani says with oil now being $US70 per barrel and the low cost sector accounting or 13% of global operations airlines face new challenges. He says the industry is $US200 billion in debt and although economists predict another five years of strong growth, nobody can predict shocks.

Unions took a particular hit in the CEO's address.

Bisignani says labour pressure on wages could kill productivity gains.

"Unions must understand that the happy days of the free lunch are gone forever."

The world's governments were accused of failing when it came to security.

"Nearly six years after the tragic events of 2001 we are much more secure, but the (security) system is still a $US5.6 billion uncoordinated mess."

He says while the new measures requiring liquids and gels carried to be placed in clear plastic bags when brought on a plane as hand luggage is an improvement, with more baggage being checked the infrastructure must improve to ensure that luggage gets to its destination.

Bisignani claims governments must be reminded of their responsibility to provide effective security that is also convenient. "Our passengers have been hassled for six years, that's far too much."

The CEO also told delegates that the airline industry had become an easy target for politicians who think green and see cash. He says some governments are promoting carbon offsets with no reliable way to measure the impact. He says the actions of some governments are irresponsible and inconsistent.

Bisignani says there have been 15 years of talks about a single European sky, which could save up to a million tonnes of CO2, however there has been no firm action.

The IATA meeting is scheduled to talk more about environmental issues in the next day.