IATA AGM: Crisis tightens industry ties

Berlin
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Out of adversity comes opportunity, said Benjamin Franklin. And airlines have certainly had their fair share of adversity over the last 12 months.

"The recession has driven a huge improvement in relations between IATA, airlines and service providers because we've all been in it together," says Jeff Poole, IATA Director for industry charges, fuel and taxation. "Airports and air navigation service providers have come to IATA, asking how we can work together."

He praises service providers which have frozen their charges, and the airports which waived ground legitimate fees during the ash crisis, helping airlines emerge from the worst downturn in living memory. But he strikes out at Airports Company South Africa and the 19 Eurocontrol states which have pushed up their costs during the recession, wiping out benefits from the 15 which froze or reduced their charges.

IATA has historically named and shamed industry partners which have failed to measure up, but Poole says the body's approach to supplier relations is evolving. "It's easy to shout and complain all the time. Instead we are trying to build constructive relationships and, rather than going in and beating up the airport or ANSP, we working with them on third party issues."

But now that things are back on the up, Poole is concerned that the mood might change. "What we don't want to see is both sides going back to their trenches and starting to throw stones at one another again the moment things gets better."

And this is relevant because a painful charges hangover is looming, as service providers seek to make up for lost ground through the cost-recovery system. "We need to financially engineer our way out of this, not do the stupid thing and recover [costs] in 2010-11," says Poole. "We expect them to continue to freeze charges and spread the under-recovery over the next three to five years." He is also calling for prices to be set for three to five years, giving visibility and avoiding painful annual negotiations.