Cathay says goverments and regulators hinder airlines

Singapore
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Cathay Pacific Airways CEO Tony Tyler says governments and regulators make life more complicated for an industry that's already suffering from dire economic conditions.

He says governments have traditionally viewed the sector a cash cow, but notes that in the last 60 years airlines enjoyed average margins of just 0.3%. "Even at the peak of the cycle, margins were less than 3% - some cash cow!"

"Regulators, governments, and stakeholders like airports don't make it easy to improve on that. When they met in Brussels the Association of European Airlines branded regulation on the industry 'unacceptably burdensome' and that much of it was 'costly and needless.' I couldn't agree more - and it's never more apparent than when the industry is wracked by crisis, as at present."

Tyler cites several examples of governments and regulators making things more challenging for airlines. These include a bill before Canada's parliament that will compensate passengers for such things as delays and cancellations, 'unrealistic' regulations in the USA, and the UK's using "the environment to excuse or justify massive increases in its air passenger duty beginning in November."

He also says authorities in the US and EU are dragging their feet over a bid from three of Cathay's oneworld alliance partners - American Airlines, British Airways, and Iberia - for worldwide antitrust immunity.

"We live in a world where politicians and bureaucrats sing the praises of competition," says Tyler. "Yet some of their actions speak louder than words. Rival global air alliances SkyTeam and Star Alliance have already enjoyed transatlantic antitrust immunity for some years, putting our oneworld at a distinct disadvantage.

"If the oneworld carriers receive their clearance - as they should - it will mean stronger inter-alliance competition, more choice, more services and more benefits for customers. It's completely illogical and unreasonable that they shouldn't operate on the same playing field."