States have established rules to govern the business aspects of international aviation. Unfortunately, these rules prevent airlines from tapping into international equity capital and from using tools like cross-border mergers and acquisitions. Airlines cannot operate like other businesses under these circumstances.
In addition, record oil prices and a simultaneous fall of demand mean that once again the air transport industry finds itself in crisis. To survive this crisis airlines need more commercial freedom.
A Summit for Freedom
As an advocate for commercial freedom, Giovanni Bisignani, IATA’s Director General and CEO, organised the ‘Agenda for Freedom Summit’ held in Istanbul on 25-26 October 2008. The summit provided a forum for discussions on ways to make more commercial freedom a reality.
It was attended by the European Commission and the governments of Australia, Brazil, Canada, Chile, India, Panama, Mauritius, Morocco, Singapore, Switzerland, Turkey, the United Arab Emirates, the United States of America and Vietnam. The delegates firmly endorsed and encouraged IATA’s role as facilitator.
The First Important Steps on a Long Journey
The Summit’s outcome was extremely positive. The delegates agreed that further liberalisation was desirable. They debated a proposal by IATA that States make unilateral declarations to waive certain restrictive provisions in bilateral air service agreements.
Whilst considering this proposal further, the delegates agreed to work quickly, with IATA’s help, on a multilateral ‘Statement of Principles’ that would signal their commitment to interpret bilateral agreements in a liberal way. They will also publicise their best practices and most liberal agreements, which could serve as models for others. Finally, they asked IATA to keep facilitating this dialogue and, as such, a follow-up meeting will take place in early 2009.
For more detail about the summit’s outcome and the debate that took place, please look at the Chairman’s Summary (pdf).
For more information, contact Carlos Grau Tanner.