The ALTA Airline Leaders Forum is the first major industry event attended by IATA’s new director general Alexandre de Juniac, and he used the opportunity to urge all stakeholders in the region to work together for the greater good.
Describing the airline industry as “the business of freedom”, de Juniac said this “powerful message must be understood by governments”.
He says that dialogue with governments “is not a selfish one... so our proposition is for a mutually beneficial partnership. In looking at Latin America and the Caribbean, I believe that the biggest opportunity for such a partnership is with infrastructure.”
De Juniac says that Latin American airlines’ expected contribution to the industry’s global profits of around $100 million “is completely disproportionate to the region’s size and importance”. He blames that partly on high costs of operating in the region and onerous taxation, as well as the financial state of some countries.
“Argentina is the region’s poster child for the necessity of capacity improvements. Its airports and air navigation infrastructure have been neglected for decades,” says de Juniac.
With the local government now planning to expand and modernise Argentina’s aviation infrastructure, “we need to work with them to find ways of aligning the necessary improvements with airline needs, and without disruptions in service”, he says.
In contrast, IATA thinks that the Columbian government’s plans to construct a second airport are unnecessary: “Maximising the current airport is probably a more cost-effective way forward and should be the first step,” he says.
While Chile is flagged as a role model for its forward-thinking approach to a competitive aviation industry, de Juniac warns that continued success “is at risk because of skyrocketing airport charges in Santiago as the concessionaire prepares to expand the airport”.
De Juniac compares the strategy of pre-funding airport infrastructure programmes to charging a toll before the bridge is operational. “It’s not fair to ask today’s users to pay for benefits that will be enjoyed by future travellers,” he says.
His bottom-line message is that as more of the industry moves to the private sector, it is vital to secure “iron-clad regulation to protect airport users [or risk] an out-of-control monopoly. Awarding concessions to the highest bidder – if that is the main consideration – does not serve long-term national interests,” says de Juniac.