Efficiency is the key for regional operators

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TOUGH TIMES: While praising MENA as one of the most dynamic aviation sectors worldwide, Bisignani reminded carriers that their profits were under threat.

Despite the advantages offered by younger fleets, state-of-the-art infrastructure and strong economies, MENA airlines need to act faster to win greater efficiencies and avoid commercialisation of airports.

So said IATA director general and CEO Giovanni Bisignani, during a speech to the Arab Air Carriers Organisation in Tunis during October.

"While MENA carriers will deliver a US$200 million profit this year, that's around $100 million less than in 2007," Bisignani remarked.

"Even these profits are generated by only a handful of carriers, while most bleed red ink. Along with the challenge of matching capacity to demand, airlines in this region have some serious homework to do. They must continue to improve safety, focus on efficiency, Simplifying the Business (StB), fuel, monopoly service providers and press governments for commercial freedoms."

While marking out MENA as one of the most dynamic aviation regions in the world, the IATA CEO was keen to stress that initiatives such as e-freight need to have a greater uptake.

Noting that the only participation in the region is Dubai, which is on the list for the next phase, Bisignani stated that the potential savings of $1.2 billion that e-freight offers is crucial to building a competitive cargo industry.

Of the 22 MENA states, only 10 have ratified the Montreal Convention or Montreal Protocol recognising electronic invoicing. Further information for regional operators as to how e-freight can be implemented is included in this issue of Air Cargo Middle East & India.

Another project that Bisignani believes the region should be pursuing more strongly is the redesign of the airspace in the Gulf region to deliver three times the capacity while simultaneously cutting costs with reduced delays and more direct routings.

"MENA's aggressive $46 billion infrastructure expansion is a golden opportunity to be a world leader by adopting StB processes and technology. Now is the time to act, not when the airport construction is complete," the IATA CEO added.

Bisignani was also keen to warn local governments that levying taxes on jet fuels was illegal, and reminded attendees that the Latin American precedent of offering management concessions to run local airports had been disastrous.

The IATA head additionally commented that while domestic liberalisation had resulted in new airlines in the UAE, Saudi Arabia and Bahrain, progress on this issue is still too slow.

But such concerns do not appear to have dented the hopes of Middle Eastern carriers.

"Royal Jordanian has been implementing a range of measures to make sure the airline will weather the storm, notably the fuel-saving programmes run by IATA, which will save millions of kilos of carbon emission, and which will make sure we can meet our financial objectives as a publicly listed company," remarked Ingo Roessler, vice president cargo, Royal Jordanian.

"All these measures will help us lift the quality that we provide to our clients and also increase the productivity of our operations," Roessler added.

"The Middle East will be affected by the economic slowdown, but the dynamics of local and regional infrastructure will help to maintain the ongoing momentum at somewhat lower levels."

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