IATA 2011: The great Arab ambush

Warning: This is long. Only read if you want to hear my observations about a truly remarkable 2011 IATA AGM.

If that’s not your bag, return to Flightglobal for news etc

 

Wow, that was some IATA annual general meeting. In fact it was like no other AGM I’ve been too.

The Airline Business Daily headline on Tuesday morning, reporting on a furious series of interventions from the floor of this normally placid affair, said simply: “Arab carriers speak out.” We could have had: “Time for change”, “Arab ambush” or “Arab spring.”

All were suggested, some even went on page, only to be discarded for reasons you’ll need to talk to myself or Airline Business editor Max Kingsley-Jones about if you know us well enough.

Read the digital edition of the paper, and those from Days 1 & 2 here.

For Airline Business, naturally, the IATA AGM is an important affair as CEOs who represent 93% of world traffic go there. We like it so much, back at 2007′s AGM in Vancouver we decided to publish a daily paper at the show. Airline Business, part of the Flightglobal publishing empire (OK perhaps empire is a bit strong), can do dailies because many of us have experience doing the Flight Daily News series some of you will know from big air shows like Paris or Farnborough.

On Monday morning at our hasty news meeting – most had to rush into the Oneworld press conference at 0745 – we highlighted possible lead stories and talking points that would go into the Tuesday morning paper.

Bisignani with his wife Elena shortly after the AGM finishes.

B+Eresized.JPGWe knew of course that the set-piece state of the nation speech from outgoing IATA director general Giovanni Bisignani’s would provide some big headlines and quotes. His “basta” blasts at monopoly suppliers and governments have become legendary and given us plenty of headline fodder over the years.

You can watch the whole thing via IATA’s website.

We also had word that there might be something else afoot: Something out of the ordinary: a surprise from the floor perhaps?

We were on high alert. So was the IATA hierarchy, for behind the scenes a revolution was rumbling and they were prepared for trouble.

As you can imagine there are many twists and turns, some dating back years, as to why this “Arab spring” came to a head in Singapore and I’d need another series of interviews and 100s more words to explain it all in detail, but simply put Middle East carriers felt under-represented at IATA, they felt IATA was too “big network carrier” – centric, and perhaps the autocratic style of its leader Bisignani was putting their backs up as well.

So what would they do about it? Prior to the meeting they were ready to agitate, but had decided, for the sake of a united industry front at Bisignani’s swansong AGM, to keep quiet. It is not the done thing to air grievances in public – and this is a very public forum.

That ended on Sunday afternoon when decisions taken in the IATA committee (which met on the Sunday) that nominates who sits on the 30-strong IATA board of governors – the most powerful IATA leaders – caused a firestorm among Middle East carrier chiefs.

A series of hasty phone calls later and a big brick was about to be flung into the normally placid waters of the IATA AGM.

Now, as a point of order, I need to try and briefly explain how the AGM works for those who weren’t there or don’t understand the procedure: this is effectively a public annual general meeting at which recommendations (resolutions) from the company board are tabled, discussed and decided.

Now I don’t know the exact procedures – refer to IATA’s website for that arcane detail - but in my understanding each IATA airline member can have their say and vote upon resolutions.

The airline delegates sit in United Nations style rows behind desks in specific places each with their own microphone. They can have their say at any point in the proceedings.

Most say nothing. They are usually more interested in the discussions and networking that take place in and around the AGM.

Yes the director general’s speech is a must-see and the CEO debate in the afternoon can throw up some good verbal punch-ups, but the AGM bit is a gavel-bashing, orchestrated swift round-up of business.

Under Bisignani the gavel-bashing part has been compressed, and rightly so. It had been a tedious, largely irrelevant, run through IATA procedures.

The only upset I can recall to this smooth running was in Washington DC in 2003 when Jaime Bautista, the cheery head of Philippine Airlines piped up. I can’t remember what he was complaining about, but it certainly stirred things up. He’s been quiet ever since though.

But the events of Monday 6 June, explained in the Airline Business story in our Tuesday paper at the show, caused more ructions at IATA.

See also this Qatar Airways press release that it issued on Tuesday 7 June – plenty of borrowing from our story. It also uses our photo of Al Baker waving his notes at the time!

I was actually sitting in the press room preparing pages when I heard on the TV feed the voice of Qatar Airways head Akbar Al Baker. His tone said it all – as I am sure all of you at the AGM knew right away.

He had some comments and misgivings about IATA’s financial statements and about its auditors. Now this doesn’t happen. Let’s be honest, how many CEOs even read the papers they get outlining IATA’s finances? I’d wager hardly any.

Al Baker was the spearhead for Middle East complaints. He was backed up from the floor by Middle East Airlines chairman Mohamad El-Hout.

From left field the Middle East carriers received support from Air Niugini head Wasantha Kumarasiri. My information is that Kumarasiri’s input was not part of any scheme, he simply spoke out at what he heard (Wasantha, if you do happen to read this drop me a line at mark.pilling@flightglobal.com and tell me your part of the story).

Again, read the Airline Business story for the details.

Now this was awkward for the man running the show (traditionally the AGM host carrier does this job) the shiny new CEO of Singapore Airlines Goh Choon Phong. Poor sod. He’s been in the hot seat at SIA less than a year and now, because the Egyptian revolution meant moving the AGM from Cairo to Singapore with just three months notice, he has to host the world’s biggest airline meeting (as an aside, Mr Goh was praised by IAG chief executive Willie Walsh for his adroit handling of the situation – well said Willie).

The discomfort on the podium was clear as Tom Windmuller, the AGM secretary, and Mr Goh handled the growing unrest.

Sharply made points from Al Baker, accompanied now with points made by the ever-eloquent boss of Emirates Tim Clark, rained in.

A vote was going to be taken, initially suggested as a show of hands by Windmuller. No thanks, said Clark, and it became a secret ballot. That would happen in the afternoon.

Throughout these proceedings, most sat there bemused, what was going on? Clearly the Middle East carriers are unhappy at IATA, but why?

It took at least an hour for all this excitement to unfold. Please correct me if I am wrong, but to my mind the only voice I recall offering a pause for thought on the Middle East intervention was Air New Zealand head Rob Fyfe, himself on the IATA board of governors.

In the afternoon the ballot result was announced, and it was close, only being narrowly defeated. The tight result in itself is a major story, showing clearly the unease that many CEOs have in IATA’s governance.

As Toronto Star scribe Bert Archer tweeted: #IATAAGM Ballot results: 43 in favour of proposal, 48 against, 5 absentions, 22 blanks, 1 ineligible. Very divided #IATA, it seems.

Overnight the IATA team pondered next moves: would any objections be raised about the appointment of director general designate Tony Tyler. The former head of Cathay Pacific was IATA’s nomination and a man seen by all as a brilliant choice.

But there was to be no further AGM disruptions. International Airlines Group chief executive Willie Walsh told the AGM that “Tony’s track record in the industry is second to none” and that IATA was “fortunate” to have a man of his standing lined up to take it forward.

However, he did allude to Monday’s events. “It has been a difficult AGM, but in my mind one of the most positive AGMs in recent times,” he said. Tyler won the AGM’s support, and took to the podium as Bisignani’s successor. Many stood and applauded.

Here Tony Tyler swaps cards with a gaggle of journos after the Tuesday press conference.



TTresized.JPGTyler made reference to Monday’s events as well: “Yesterday was an interesting day wasn’t it.” But, like Walsh, he was encouraged. “It shows how relevant and important IATA is to you…that’s a good thing.

“My priority now is to ask questions and then to listen and to learn,” he said.

 

 

So what have we learnt from this most remarkable of IATA AGMs?

Firstly, Tony Tyler has been handed a bit of a hot potato to deal with. He officially begins work on 1 July and one of his first tasks will be to mollify the Middle East carriers and get them back on board.

The Middle East carriers respect and admire Tyler so he has a good chance of achieving that.

Secondly, there will be some soul-searching at IATA about whether it is properly transparent and has balanced its representation of big and small alike. “I heard your message about greater member involvement and transparency,” said Tyler on Tuesday. He must wonder just what he’s sailed into.

Thirdly, there is no doubt this was not the leaving ceremony Giovanni Bisignani envisaged. For me, and I expressed my views about Bisignani’s leadership of IATA in the June issue of Airline Business, these events did overshadow his departure.

But the Middle East rumblings and arrival of Tyler should not detract from Bisignani’s undoubted achievements with IATA over the past decade.

For me as a journalist Bisignani has been brilliant. And on a personal level I have really enjoyed dealing with him and I’ve got immense respect for him. Of course he’s not perfect and clearly he’s made enemies as well as friends.

But I do regret that his goodbye this week did not include a standing ovation, which I think is rather churlish of the IATA members.

Overall quite simply it has been an amazing few days that have been a privilege to cover.

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