Leadership challenges for Asian aviation

Speaking at the recent Asia Pacifi c Aviation Media Association’s (APAMA)

Aviation Lecture in Singapore, the director general and CEO of the International

Air Transport Association (IATA), Giovanni Bisignani urged Asia

to take a greater leadership role in shaping the global aviation industry.

Unfortunately, cargo didn’t feature prominently in his speech despite the

fact that especially Asian carriers derive a signifi cant portion of their overall

revenue from cargo. Some highlights:

“Asia is a big part of the aviation world. By 2010, intra-Asia traffi c will be

the largest market in the world, accounting for one third of the world’s traffi

c. Critical mass comes with leadership responsibilities,” said Bisignani.

He identifi ed three opportunities for Asian leadership in the aviation

industry including technology, policy and the environment.

“As the labour cost gap narrows, technology is the key to competitiveness,”

said Bisignani. He highlighted electronic ticketing (ET), which will save the

industry US$3 billion. While China is at 95 percent ET penetration, well

above the global average of 78 percent, the rest of Asia is only 3 percent

ahead of Africa at 68 percent due to the slow uptake of ET in Japan and

Malaysia. “We will make our 100 percent target by the end of this year, but

it will require a major effort by some carriers to catch up,” he said.

He also urged Asia to lead air traffi c management by implementing costeffective

technologies that are in line with global standards. Focusing more

on aircraft capabilities, we can reduce the need for expensive and labour

intensive ground based facilities, while improving both safety and effi ciency,

thus increasing airspace capacity.

With regard to policy, Bisignani called on Asia to develop a regional policy

approach to industry issues, such as safety and liberalisation.

“Governments are responsible for safety. However, not all governments in

Asia are at the same level in safety oversight. Global standards need to be

maintained by all. Asia’s governments need to start incorporating the IATA

Operational Safety Audit (IOSA) into their safety oversight programmes in

order to drive the accident rate down,” said Bisignani. The 2006 accident

rate for Asia Pacifi c carriers was on par with the global average of 1 accident

for every 1.5 million fl ights. But the industry target is a 25 percent

improvement by 2008.

Airlines need commercial freedom to operate as true businesses. “The

future is yours to shape. Don’t repeat the short-sighted mistakes of Europe

and the US. While the recent US and Europe open skies agreement was a

step in the right direction, it fell short of the fundamental change that the

industry needs. They have lost the vision that made them natural industry

leaders. It’s Asia’s turn. But you must think bigger and faster to implement

a staged approach to liberalisation that can keep pace with the needs of a

dynamic industry,” said Bisignani.