Bisignani lambasts monopoly suppliers

Kuala Lumpur
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IATA director general Giovanni Bisignani lambasted monopoly suppliers during his IATA flagship address, but he also heaped praise on proactive industry partners which have worked to softenthe impact of the downturn.

The biggest round of applause erupted when Bisignani blasted Global Distribution Systemprices: "We cannot accept that those [GDSs} in the West charge $4 per transaction when China TravelSky does the same job for 50c. This must change."

His message to labour, travel agents and GDSs alike is "resizing and reshaping is not just a problem for airlines. Our partners live on our revenues and they must follow the same approach."

With some carriers facing demands from staff for wage increases, Bisignani had a stern warning. "For labour we cannot reshape without flexibility. This is not the time for salary increases. To protect jobs we must modernise work practices and we must all do more with less.

Wall of shame

No Bisignani speech goes by without a swipe at monopoly suppliers and this year was no exception. "For the worst contributors to this increase we have a special place on the IATA 'wall of shame'," he says.

"What can I say? Basta! There is no room for this nonsense in our future. When demand drops, suppliers cannot divide the same costs among fewer customers.

"The bill that you paid to happy monopoly suppliers grew by $1.5 billion last year. In the first six months of 2009, as the industry crisis worsened, it grew by another $1.5 billion."

But the IATA chief was also quick to praise the best performers: "Some are sharing the burden of change." He flagged the efforts of Malaysia Airports, which has cutits charges by 50% for two years, as well asSingapore which has cut its charges by 25%.ATCproviders for Irelandand Vietnamand the airports of Dallas/Ft Worth, Geneva and Thailand also won plaudits.

Job Creation

Bisignani pleaded forair transport to be given the"basic commercial freedoms to run our businesses".He said, according to a study, liberalisation of key world routes would create 24 million jobs and deliver $490 billion in economic activity.

But the IATA chief stressed that the industry is not looking for bail-outs. "All we want is access to global capital, but old rules stand in the way of a healthier industry. If we cannot pay the bills, saving the flag on the tail will not save jobs.

"What is the opportunity for our future? Progressive liberalisation. It would be a cheap and effective stimulus," says Bisignani. "For our industry, with $48 billion in losses since 2001, the time for changeis now. Governments must understand that the survival of the industry is at risk. They must deliver normal commercial freedoms urgently and effectively."