“Airlines are the transit system for the global economy; and they have transformed commerce every bit as thoroughly as the automobile transformed
“This is a global issue, but it is particularly distressing to find that the United States, where this industry was born and which led the world in liberalizing domestic and international air transport, seems to be moving forward into the past. Apparently policy makers in
Regulation
“The airline industry may be deregulated to the extent that carriers are permitted to set their fares according to demand. But regulators aim to design the details of competition in a manner that is wholly at odds with how other industries are treated and with the workings of the free market. In particular, they appear determined to hold commercial aviation to a different business standard than they impose on any other form of transportation—or consumer facing activities,” said
“It is totally appropriate to set simple minimum customer service standards. But that’s not what’s happening. Regulators are micro-managing our businesses, telling us how we may advertise our services, how long we must hold a reservation that has not been paid for and how we are to manage operational disruptions regardless of the cause. These regulations impose a huge penalty on the economy and ultimately raise the cost of air travel for all consumers.”
Airlines are committed to ensuring the safety and comfort of passengers and recognize the need for passengers to have access to basic protections during their journey. To that end, IATA members recently affirmed a set of core principles on consumer protection that aim to strike a balance between protecting passengers while maintaining industry competitiveness and recognizing the power of the marketplace.
Distribution
The threat of a new US Department of Transportation regulation that would mandate how and where airline ancillary products are displayed continues to overhang the industry. But the market is already moving to give consumers a more transparent air travel shopping experience through an IATA initiative called the New Distribution Capability (NDC). “NDC is about bringing the same level of capability to display and sell additional products and services through the travel agent channel that already exists on airline websites. That’s not the case today. On an airline website, you may have access to a wide range of add-ons and fare packages that are not offered elsewhere,” said
“Standards enable innovation and efficiency and make it possible for incumbents and new entrants to work from the same blueprint. We believe an NDC standard will enhance the air travel shopping experience for passengers. But, let me assure you of a few things. NDC will operate within the same privacy laws that govern every other business. That is no change from today. But, by giving travel agents more information, there will be greater transparency. The NDC standard will enable much richer comparison shopping for travel products, not just the base fare, but the entire spectrum of offerings.”
Consolidation
“We recently were reminded of this when the Department of Justice (DOJ) announced it would sue to prevent the merger of American Airlines and US Airways. I am not an expert on
Taxation
Aviation is taxed at levels far exceeding those of most other activities, but too little of that money finds its way into infrastructure investment. “Fees and taxes represent around 20% of the average
“In a little less than 100 years, commercial aviation has transformed the world. This year, we expect airlines to carry more than 3 billion passengers—equivalent to around 44% of the Earth’s population and we make possible $2.2 trillion worth of economic activity. By value, over 35% of the goods traded internationally are transported by air. Within the