IATA DG de Juniac at CORIM: ‘Do not Privatize Canadian Airports’.

1113 mots. Temps de lecture : 2m30s.

.MONTRÉAL – Speaking at the dinner time in front of the members and friends of the Conseil des relations internationales de Montréal (CORIM) or Montreal Council on Foreign Relations, Montréal-based IATA DG and CEO since September, the 1^st, 2016, Alexandre de Juniac addressed international and Canadian topics related to civil aviation.

Graduated from two of the most prestigious French higher education schools, École Polytechnique and École nationale d’administration (ÉNA), Mr. Juniac worked fourteen years for Thales as general secretary, then became in 2009 French economy minister Christiane Lagarde Chief of Staff before joining in 2011 Air France then Air France-KLM as CEO.

Alexandre de Juniac began with some thoughts on IATA’s role.

He underlined that ‘first and foremost, IATA promotes safe, efficient, economical and sustainable global connectivity by air requesting borders open to people and to trade’.

He believes that aviation is the business of freedom and he showed his concerns with political developments pointing to a future of more restricted borders and protectionism denying the benefits of globalization to which aviation has made an enabling contribution.

According to him, second for IATA and for its 265 members operating 100 000 flight a day, he reminded that setting global industry standards and facilitating their implementation are critical for a global industry that simply could not function with different systems and standards for each airport or destination.

Mr. Juniac underlined the presence of aviation in Montréal: ‘Along with IATA and ICAO, Montreal is also home to international organizations representing airports (ACI: Airport Council International), pilots (IFALPA: International Federation of Air Line Pilots Associations) and air traffic controllers (IFATCA: International Federation of Air Traffic Controllers‘ Associations).  He added that two of IATA’s four Canadian members are based here: Air Canada and Air Transat,  Calin Rovenescu, President and CEO of Air Canada, is a past Chairman and current member of IATA’s Board of Governors. Moreover Bombardier and CAE are among the six IATA Strategic Partners located here while Aéroports de Montréal operates airports served by some 30 airlines, most of which are IATA members.

Air transport: very good years ahead.

Mr. Juniac recalled his audience that between 2011 and 2014 airlines were profitable even as the price of crude oil hovered around US$100 per barrel. And in 2015 there was a great breakthrough. For the first time in history, airlines earned a profit in excess of the industry’s average cost of capital. In 2016 airlines collectively made a record profit of $35.6 billion in spite of the fact that ‘It is still, however, an incredibly tough business’. Total industry revenues were some $701 billion with a global net profit margin of just 5.1% or about $9.43 per passenger. ‘That is a lot less than what most governments—including Canada—take from passengers in taxes!’

According to de Juniac, 2016 should be another strong year as aviation continues to grow to meet the world’s thirst for travel. This year passenger numbers should reach 4 billion and air cargo over 55 million tons of cargo or over a third of goods traded internationally.

By 2035, passenger numbers are forecast to reach 7.2 billion while aviation’s goal is to stabilize its net emissions from 2020 with carbon neutral growth and by 2050, cut net emissions to half the levels of 2005.

Even if Mr. Juniac is optimistic about the future of aviation, he nevertheless pinpointed its biggest global challenges.

Trump administration flight bans: a problem.
Last week’s US and UK ban on large electronics for flights to the US and the UK from some airports is worth reflecting on because it has been implemented without consultation and little coordination by governments according to IATA DG.

For him ‘the current measures are not an acceptable long-term solution to whatever threat they are trying to mitigate’. He assured his audience that even in the short term, he is questionning their effectiveness while their commercial distortions are severe.

He reminded that IATA is calling on governments to work with the industry to find a way to keep flying secure without separating passengers from their personal electronics.

Mr de Juniac pointed to differences between the airports under the US and UK governments’ electronics ban: “Why don’t the US and the UK have a common list of airports? How can laptops be secure in the cabin on some flights and not others, including flights departing from the same airport?”

The US restrictions, announced on 21 March, forbid passengers on US-bound flights departing 10 African and Middle Eastern airports from carrying on-board most electronic devices that are larger than a mobile phone.

UK regulators followed suit shortly after, but its list of restricted airports notably excluded major hubs like Dubai, Abu Dhabi and Doha.

“The current situation is not acceptable and will not maintain the all-important confidence of the industry or of travelers. We must find a better way,” says de Juniac.

“There was no prior consultation and little coordination by governments,” says de Juniac.

IATA represents most of the carriers affected by the restrictions. This is the second time in recent months that IATA has criticized new government regulations that directly impact airlines.

The grouping had slammed US travel restrictions rolled out by the Trump administration in late January, saying then that they were “issued without prior coordination or warning, causing confusion among both airlines and travelers”.

Canadian airports privatization: not a good idea.

Unfortunately, for IATA DG, the Canadian Liberal government considerations on airport privatization could make things worse.

Mr. de Juniac criticized the fact that Ottawa has already pocketed large amount of money as the historical landlord of airport property.  He was in no way unambiguous by stating that ‘Canada will regret it if the crown jewels are sold’….’Airports should focus on enabling economic vibrancy in the communities they serve’.

According to him, airports should provide sufficient capacity, with high service levels at affordable costs so that airlines can develop connectivity. ‘Community owned airports, as is the case in Canada today, have every incentive to do so….Private companies, however, have a different goal which is to maximize profits for their shareholders’.

He sent a strong warning by recalling ‘We have not seen a regulatory framework anywhere in the world that has been able to successfully balance profit and public interest over the long-term’.  He added ‘But we have seen airport privatization dent a country’s competitiveness by increasing the costs of mobility and compromising service levels’.

He concluded ‘You don’t have to take my word for it. Just look at the top airports and most dynamic air transport markets: Singapore, Hong Kong, Doha, Seoul, or Dubai. Not one is in private hands.’

 

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