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Sun 13 Nov 2011 06:15 PM

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Qatar Airways CEO seeks clarity on IATA's spending

Akbar Al Baker seeks details on how airlines' financial contributions are spent by the trade body

Qatar Airways CEO seeks clarity on IATA's spending
Al Baker has backed the appointment of IATA’s new director general Tony Tyler

The International Air Transport Association (IATA) has failed to address growing concerns about its expenditures from member airlines, a leading executive has claimed, despite assurances that operational costs would be justified.

Objections were strongly raised at the trade association’s annual general meeting in Singapore this year, when Qatar Airways CEO Akbar Al Baker highlighted that $18m had been spent on travel, $58m on data processing and informational technology, and $29m on outsourcing and consultancy.

The executive demanded that IATA substantiate “such large sums” and validate the processes by which consultant and outsourcing contracts were awarded. However, five months later and Al Baker confirmed that a satisfactory response has still not been received.

“The International Air Transport Association belongs to member airlines and we deserve to know how our financial contributions are spent. For this reason, I asked for a lot of information about expenditure during IATA’s annual general meeting and received an assurance that the details would be supplied. Until today, I am still waiting,” explained Al Baker.

“Hopefully they will come back to me. I simply want to provide guidance on expenditure, but for that to happen, I need their cooperation. For example, if there are excessive funds, this should be returned to member airlines in the form of reduced charges, because IATA champions itself for saving us money.”

Al Baker has backed the appointment of IATA’s new director general Tony Tyler, the former chief executive officer of Cathay Pacific, who become the sixth person to lead the organisation after replacing Giovanni Bisignani earlier this year.

“It’s very important to point out that I have full confidence in the new director general. He comes from an airline background, knows the business well and has proved himself as a successful chief executive, not like Giovanni Bisignani,” Al Baker stated.

“The previous director general could not be credited with running any organisation successfully. The way he was conducting business and heading IATA, it was not very clear to airline members, and this is the reason why questions are now being asked about transparency.”

Al Baker is particularly critical of Bisignani’s decision, shortly before retiring as director general, to broaden the Middle East representation on IATA’s board with the “surprise” election of Etihad Airways CEO James Hogan.

“We believe such issues should not be surprises. Firstly, such decisions should be transparent and secondly, if geographical representation is the basis of the composition of the board, the regional airlines involved should be informed in advance of their regional allotments so that they can coordinate who should represent them,” stated Al Baker.

“With all due respect, because James Hogan is a friend and colleague, our issue is not about the name. Our issue is about the processes that the former director general followed. He informed the relevant committee that there is a nomination for James Hogan, he is a good candidate and should be appointed. The vacancy was not announced, the nomination was not announced, it came out of the blue and that is wrong in my opinion. If the nomination process is not followed, then concerns need to be raised.”

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Salim 8 years ago

Iata is a credible and trustworthy organisation run by professionals with lots of wisdom.So far they have done a great job for the member airlines.Their decisions are intelligent and far sighted.Right choice of DGs were elected by member airlines.
I am sure regular audits are in place to check financial balance sheets.All should allow this body to carry out their professional work and should not question their credibility.IATA you are doing a great job and will climb greater heights with Tony Tyler at the helm.

Engineer Mirza S M Baig 8 years ago

Bravo!!! Akbar Sahab,
After all there is somebody to offer guidance and demand transperency. IATA should have moral courage to open up.