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• The total cost for infrastructure charges is equivalent to 11% of airline revenues
• IATA campaigns with infrastructure providers (airports, air navigation service providers (ANSPs), and fuel suppliers) as well as regulators and governments to deliver cost savings and efficiency improvements. Our activities include direct consultation, negotiation and lobbying
• In all its work, IATA emphasizes the key principles of infrastructure charges:
• Transparency
• Cost-relatedness of charges
• Consultation with airlines
• Equitable charges structure
• Single till
• Productivity improvements

Concerning trends in 2011

• In 2010, the IATA External Cost Campaign secured record cost savings of $6.8 billion, including $3.2 billion in real reductions. Unfortunately, cost increases also amounted to $5 billion. We continue to face strong challenges to cost-efficiency
• While charges, taxes and fees have been less volatile in 2011 than in previous years, significant risks remain for 2012
• Amid the debt crisis in Europe and North America, some governments are proposing to tax aviation further to raise revenues
• In Asia, governments are seeking to minimize existing state funding for airport and ATC services, leading to potentially large increases in charges
• The Single European Sky, which would make European air navigation more cost-efficient, needs significantly more ambition and commitment from states
• Airports in Africa are introducing large Infrastructure Development Fees without transparency or justification
  

Developments in 2011

• The IATA Board of Governors established a 2011 target for savings/cost avoidance of $3 billion in industry taxes, charges and fuel fees, including at least $1.5 billion in real cost reductions
• IATA has been working towards these targets and combating ever-rising costs by engaging providers at a very detailed level during the decision-making process
• We are also cooperating with governments and other aviation bodies such as the International Civil Aviation Organization (ICAO), Airports Council International (ACI) and the Civil Air Navigation Services Organization (CANSO) to provide a stronger framework for cost efficiency

Cost Campaign Jan-Oct 2011 - Total Impact

Cost Campaign Jan-Oct 2011 - Impact by Category

In the period January–October 2011, IATA campaigns achieved $1.87 billion in real reductions on charges, taxes and fees, as well as avoided a further $1.86 million in increases (see Chart 1. above). During the same period, we recorded increases of $1.87 billion. Major campaigns in 2011 included:

• South Africa: IATA opposed the Airports Company of South Africa (ACSA) attempt to raise airport charges by 190% over two years, reducing the price increase to 161% over five years
• D.R. Congo: following IATA’s strong protest against an unjustified 60% increase in overflight charges, the provider reduced the rise to 30%
• Australia: following IATA submissions on Air Services Australia’s proposed prices, the regulator cut the increases permitted by over $132 million over the next five years
• Russia: as a result of sustained IATA engagement, the Russian air traffic control provider, FATA, agreed to cancel a proposed increase of 9.5%, avoiding $125 million in costs
• Brazil: IATA’s intervention at the request of the regulator led to the refusal of the Empresa Brasileira de Infraestrutura Aeroportuária (INFRAERO) proposed 200% charges increase
• Ecuador: IATA helped to secure the reimbursement of the 12% VAT levied on jet fuel for cargo flights, saving $59 million
• United States: IATA and Airlines for America (A4A, formerly Air Transport Association) lobbying prompted Agricultural Inspection (APHIS) to review their charging structure and shift the financial burden from aviation to non-aviation users

Messages for 2012

• Our ongoing message to our stakeholders is not to lose the progress made in recent years by returning to previous patterns of cost increases
• Aviation must not be treated as a cash cow for providers and an easy target for taxation by governments
• We urge providers to continue to build on the collaborative relationships established with airlines during the crisis
• The industry must continue to seek opportunities for cost reduction and efficiency improvement

Updated: December 2011