United front

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Whether by luck or by judgement, the most recent annual gatherings of the world’s airline leaders have taken place smack bang in capital cities where their association has had its greatest beef with the country’s main hub.

This year, as IATA convenes its 61st Annual General Meeting (AGM) in Paris in early June, Aeroports de Paris (ADP) and the French government are in its firing line over what airlines see as price hikes designed to fatten the airports group for privatisation. So deep is its concern over a process that saw political forces go against expert opinion and approve a 5% plus inflation charges rise at ADP airports for five years that IATA has taken the unprecedented step of taking the French government to court.

In 2005, as IATA met in Tokyo, it was Narita international airport that was in the limelight. This is an airport against which IATA has fought for years because of its sky-high prices. The meeting coincided with some good news for carriers as Narita announced it was lowering its prices. It is debatable exactly how much airline pressure caused the airport’s action, but there can be little doubt that IATA’s efforts did have an effect.

IATA will continue to employ the tactic of picking off offending airports one by one. But let’s be clear, there are not all that many. As one airline executive comments: “We are not suggesting that nine out of 10 airports are bad boys.” However, the fact remains that airlines feel too many airports exist in a “grey area” when it comes to whether their charging regimes and the systems that set them are fair and open.

It is for that reason that IATA is ramping up its call for the independent economic regulation of airport charges. The campaign began in earnest in Europe where IATA is delighted that transport commissioner Jacques Barrot is taking an interest. The European Commission (EC) has hinted before at entering this fractious area, but no firm measures ever resulted. This time around, Barrot seems keener on building a consensus between all sides. He has already held an industry round-table on the subject and most believe Brussels will produce rules that insist countries apply ICAO’s widely accepted, but not legally binding, principles on airport charges, including the application of economic regulation. “This is a huge signal for airports that they had better get their act together,” says Ulrich Schulte-Strathaus, secretary general of the Association of European Airlines (AEA).

Carriers believe this will level up an uneven playing field and give them some much-needed leverage and comeback. Airport bodies argue that more regulation will bring higher costs and point to the system of “light” regulation or price monitoring, as used in Australia and New Zealand, as positive methods of setting charges.

Whichever technique is applied, and more rather than less regulation appears warranted at least at major hubs, Europe’s politicians and regulators do not want their engagement to be a one-way street. They are also stressing the need for dialogue between stakeholders. In Europe these stakeholders are listening. In late April, chief executives from Europe’s leading airlines and airports held a joint meeting to repair their damaged relationship. They agreed that the easiest wins are in areas like security and the common promotion of air transport as a “good thing”. As Roy Griffins, the head of Airports Council International-Europe says: “If we do collaborate without arguing we will be a much more effective and influential message generating machine.” Can this rapprochement extend into the charges arena? “It is the key issue,” confirms the AEA’s Schulte-Strathaus, but importantly the two sides are talking.

The time clearly has arrived for all stakeholders to come together and demonstrate that a united front will present far more persuasive arguments to politicians and regulators than swapping insults. For some across the airline/airport divide this approach has often proved difficult. But it is a bridge that needs to be crossed, and not just in Europe.

Otherwise we should all start thinking of the next big airport charges row, for if recent history is any guide the city in question will surely be the venue for the 2007 IATA annual general meeting. ■

Live from IATA’s AGM

During this year’s IATA Annual General Meeting, being held in Paris from 4-6 June, a team of journalists from Airline Business and the Flight Group will be presenting all the news, as it happens, on our group website. Visit www.flightglobal.com from Friday 2 June for a preview of what to expect from this invitation-only gathering of the world’s airline leaders, and for three days from Sunday 4 June to find out who and what is grabbing the headlines.