IATA Performance and Governance
Managing Your Money
At its meeting in Beijing on 10 June, the 195th meeting of the Board of Governors reviewed IATA’s performance on managing industry revenues. The Board was pleased to confirm that IATA continues its strong record in this critical area.
- In 2011, IATA managed US$367 billion of airlines’ monies through its financial and settlement services on time and without interruption, with a collection rate above 99.9%.
- This year, IATA continued a major effort to strengthen the IATA Settlement Systems under one standard operating procedure, one structure, and one tool.
- The migration of all BSP and CASS back-office functions to five regional hubs over the next two years will result in stronger controls. IATA is also committed to an average 23% reduction in the BSP unit operating charge by 2017, compared with 2010, while maintaining a strong commitment to customer service.
- This will in turn allow local IATA offices to focus more on customer service and relationships while also taking on a broader role in the industry, including on critical advocacy campaigns.
- The Board asked IATA to examine the possibility of accelerating this regionalization program to gain these benefits sooner.
- The Board also asked IATA management to return in December with a longer-term plan for BSP and CASS in light of industry developments, including emerging distribution models.
The Board and the 68th AGM in Beijing also approved a number of changes to IATA’s governance documents. The objectives of this review were to:
- Ensure that IATA’s governance structure and processes remain relevant as the industry undergoes structural change;
- Bring a greater level of transparency to the way in which the governance of the Association is implemented, including codifying many long-standing but unwritten practices affecting IATA’s governance; and
- Clean up minor discrepancies that had been picked up in the documents over the 16 years since the most recent major review of the governance.
Amongst the most significant changes approved by the AGM and Board are the following:
- Many of the Board’s existing practices have been clarified so as to eliminate any areas of ambiguity, for example with regard to the geographic allocation of seats.
- Board members are now limited to a maximum of three terms of three years each and individual serving on one of IATA’s six Industry Committees are limited to a total of three consecutive terms of two years each.
- The Board’s Chair Committee will be expanded from four to six members to provide more members an opportunity to serve, to allow greater transparency and to bring a wider diversity to the oversight of IATA management.
All changes became effective at the close of the AGM and are being implemented now.
- Alan Joyce, Qantas CEO, succeeded KLM President and CEO Peter Hartman, as Chairman of the IATA Board of Governors, at the conclusion of the AGM.
- The following members were also elected to the Board: Akbar Al Baker, Qatar Airways; Richard Anderson, Delta Air Lines; Enrique Cueto, LAN; Alan Joyce, Qantas; Hossam Kamal, Egyptair; Marcin Piróg, LOT Polish Airlines; Vitaly Saveliev, Aeroflot; Si Xian Min, China Southern; Jean-Cyril Spinetta, Air France/KLM representing Air France; Willie Walsh, IAG representing British Airways.
- More information on IATA Board membership