Asia’s airports and airlines are better poised to cope with and compete in the global marketplace than American carriers, United Airlines’ chief executive Glenn Tilton, one of the most outspoken advocates for US airline consolidation, told 300 business leaders in Boston recently.
Tilton said by 2010, more than onethird of the world’s air traffic will be to, from or within Asia, according to a Boston Globe report.
"There is a sense of possibility that the global economy can be shaped to serve Asia’s interests – and a clear understanding of the vital role aviation plays in creating that future," Tilton said.
"Work is well underway in China to relieve congestion and convert China into a global aviation leader by completing its ambitious US$17.7 billion plan to modernise its aviation system, add 49 new airports and more than 600 new aircraft, along with 700 other airport expansion projects, by the year 2010," Tilton said according to the report.
"And growth is not limited to Asia. In the Middle East, Dubai is building a new airport with the latest technology, best passenger comforts, and six runways – all capable of landing the world’s largest new passenger aircraft – to serve as a new global 24/7 airport."
In contrast, he said, the US has failed to modernise its aviation industry’s infrastructure and regulatory environment to keep up with technological advances because of special interest group lobbying over how to pay for and implement new systems.
"U.S. aviation once led the world in innovation, efficiency and competitiveness," Tilton said. " Today, we no longer lead." Earlier this month, rumors swirled about United and Delta talking about merging ¨C a combination that would create the world’s largest airline. Tilton declined to comment on the talk of a possible United/Delta merger, but said consolidation is giving European and Asian airlines an advantage.
He said the four-year-old merger between KLM and Air France has created the world’s largest international carrier, based on revenue, and China Eastern Airlines is poised to become a world-class carrier after its September announcement that Singapore Airlines was seeking to buy a 24 per cent stake in its business.
Tilton highlighted the need for consolidation in the US aviation industry saying: "In the US today, we have a total of 150 certificated airlines – including six majors, five low-cost carriers and nine regional carriers."
"It was the goal of deregulation back in 1978 to create a market with much more choice and better pricing options for consumers. That ambition has more than been achieved. Washington’s desire to keep the industry fragmented, driven by domestic market concerns, has led to a resistance to the normal order of free market activity."