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Aviation History
2000
2000 - 1784.PDF
BUSINESS IATA joins liberalisation debate GRAHAM WARWICK/SYDNEY THE INTERNATIONAL Air Transport Association (IATA) has entered the debate over liberal isation of air services. Concerned that the "patchwork progress" with liberalisation could harm co-oper ation between airlines, the organi sation wants regulators to follow a common set of principles. The principles, agreed at IATAs annual general meeting (AGM) in Sydney, on 2-4June, do not recom mend a particular mechanism for liberalisation, nor do they mention the contentious issue of removing restrictions on foreign ownership and control of airlines - seen as the main barrier to full liberalisation. "We are not taking a position on MERGERS ++ GE Capital Aviation Services is to acquire Credit Lyonnais/PK Airfmance, a subsidiary of Credit Lyonnais which provides and arranges aircraft-backed debtto air lines. Upon completion of the deal, which is subject to approval from the Luxembourg regulatory auth orities, the business will change its name to PK Airfinance. ++ CHC Helicopters has sold its non-core Scandinavian operations: Sweden- based Heliflyg to Osterman Helicopter for $6 million and Norway-based Lufttransport to Norwegian Air Shuttle (NAS) for $14.2 million. The deal sees NAS assume lease financing for seven Beech KingAir200s, forwhch it has paid a $3.4 million non-refundable deposit. ++ BBA Group, provider of business aviation services, is to buy Lynton Group for £37 million ($56 million). Existing resources will fund the deal, which is subject to regulatory approval. ++ Boeing is to acquire Autometric, an IT com pany that collects, analyses and interprets satellite imagery for the US Defense Department and intel ligence bureaux. Boeing will run it as a subsidiary in its Integrated Defense Systems division of the space and communications group. one model. Every region has to decide for itself," says IATA direc tor general Pierre Jeanniot. Instead, the organisation wants future regulatory systems to pro vide consistent safety and security oversight, adequate infrastructure, open access, continued interlining and mechanisms to improve busi ness efficiency. In a bid to set an example on lib eralisation, Australian deputy prime ministerjohn Anderson un veiled an international air services policy at the AGM, allowing 100% foreign ownership of a domestic airline. "Ownership and control restrictions force airlines without local equity to rely on debt and debt-laden airlines put our safety initiatives at risk," he says. At the AGM, International Civil Aviation Organisation president Assad Kotaite endorsed IATAs lib eralisation principles, but suggest ed relaxation of ownership restrictions should be added to die list. "Broadening of ownership and control provisions is inevitable, but unless the aviation community is directly involved in their evolution, die risks will be high," he says. Rather than actively shaping regulatory reform, some feel IATAs liberalisation principles are mainly concerned with safeguard ing the existing multilateral inter line system, which enables airlines to co-operate on passenger ticket ing and cargo handling. "As liberal isation unfolds, we need to protect what works now," says Jeanniot. The interline system is coming under scrutiny from anti-trust authorities, led by the Australian Competition and Consumer Commission (ACCC), which announced at die AGM it is to review IATA's current anti-trust authorisation. "IATA effectively operates as a cartel," says ACCC deputy chairman Allan Asher. Also at die ACM, an unexpected move by smaller airlines resulted in IATA being asked to give urgent consideration to die establishment of a single e-commerce portal for the global air transport industry. In other actions, IATA adopted a fleet-wide fuel efficiency goal of a 10% improvement over the next 10 years, having achieved 17% since 1990. • New LIAT management wins case for reprieve but still needs alliance THE OWNERS of loss-making West Indian carrier LIAT have commit ted themsleves to a financial restructuring, so long as die airline's newly appointed management produces a viable business plan which, in turn, is dependent on estab lishing an international alliance. LIAT's new management team, headed by former Aer Lingus executive Garry Cullen, hopes to present and secure board approval of die three-year rescue plan by the end of this month. Providing die plan also wins trade union acceptance, it is understood that the shareholders will agree to refinance LIAT, which is around $30 million in debt. Last year, Speedwing produced a restructuring plan for LIAT, but it ran into opposition over die ques tion of cutting the carrier's 900- strong workforce. Natural attrition and a freeze on recruitment, how ever, has since reduced the number of jobs to within 100 of the 730 tar- LMTs survival could depend upon it finding an ally get recommended by the British Airways consultancy company. The success of die new business plan largely hinges on the Antigua- based airline securing the support of an alliance. BW7A, which owns 29% of LIAT, has offered to enter into a co-operation deal making die carrier its regional feed into Antigua, Barbados and Trinidad (Flight Inter national, 30 May-5 June, PI 6). LIAT sources warn that "simply codesharing" with BWIA is not enough. It wants a full partnership encompassing joint market ing, procurement, branding, facility use and possibly extending to BWIA's pro posed tie-up with United Airlines. LIAT at the same time is keen to maintain its feeder relationships widi Air Canada, British Airways and Virgin Airlines and officials hint that a deeper relation ship with the latter two offers a fall-back alternative to BWIA. Meanwhile, the airline has moved to improve its operations and regain traffic lost to start-up Eastern Caribbean Express. It has axed loss-making services and grounded two of its nine older Bombardier Dash 8-100s to relieve pressure on maintenance. In the longer term, it wants to move to an all Dash-8-300 fleet. Q FLIGHT INTERNATIONAL 13 - 19 June 2000 33
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