Consolidation the solution to airline problems - CEO IATA

Surekha Galagoda reporting from Switzerland

A government should not get involved in operating airlines - instead they should play the role of facilitator and concentrate on improving the regulations and developing the infrastructure, said Director General and CEO of International Air Transport Association (IATA) Giovanni Bisignani.

Addressing the fourth Global Media Day in Geneva, Switzerland last week, he said that one of the pressing problems the air transport industry faces is that it has too many airlines at present, more than 1,000 airlines.

The solution is consolidation, but regulations make consolidation difficult. IATA's priorities for 2008 are Safety, Simplifying the Business, Security, Infrastructure and Environment.

He said that safety is their number one priority. The IATA Operational Safety Audit (IOSA) is the global standard for airline safety management and a condition of IATA membership is specific deadlines. In 20 days all our members must conclude audits.

Already 225 members have been audited and 12 more are expected to be completed by the year-end. That means 97.5% are on board. We will be strict with the deadline and all members who do not complete an audit by December 31 will be out of the Association, just like the six that did not make the first deadline at the end of last year.

Our focus is on raising the bar on safety, not reducing our membership so we are strengthening the program. Last Friday our Board approved an important change. From 2008 IATA will fully fund the cost of IOSA audits for members.

This is an annual investment of US$5 million for IATA demonstrating our commitment to safety and enhancing quality control. We are also asking governments to use IOSA as it's a free and effective tool to improve safety oversight.

Turkey, Costa Rica and Mexico are the latest countries to incorporate IOSA into the national legislation, but governments need to move faster.

Bisignani said, "We measure our success in safety with the hull loss rate. 2006 was our safest year ever with 0.65 accidents per million flights or one accident for every 1.5 million flights. Russia's accident rate was 12 times the global average." I met the Russian Minister of Transport early this year and we agreed on an action plan including the IATA's Partnership for Safety Program. The results are in the numbers. There have been no accidents with Western-built jets so far this year."

Russia joins North America and Europe where safety improved in 2007. But accidents in Brazil, Indonesia and Africa pushed the global hull loss rate to 0.83 hull losses per million flights. As with Russia we are responding with targeted programs including Partnership for Safety.

There are also three global areas of concern and the first is to expand our audit programs.

The IATA Safety Audits for Ground Operations (ISAGO) will help mitigate the US$4 billion cost of ground damage. Our target is to conduct the first 60 ISAGO audits within 2008 and we see the possibility to expand our experience to maintenance, repair and overhaul. The second is improving runway safety with better weather and airport information for pre-flight planning.

A newly developed IATA toolkit will support more effective decision-making by pilots. The third is licensed personnel. There are 16,000 aircraft on order through 2020 and we need to train 17,000 new pilots a year to fly them. That's 40,000 more than the current capacity.

The goal is to ensure that training standards are maintained and enhanced as training programs are ramped up to meet the demand.

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