The old IATA was able to start small and grow gradually. It was also limited to a European dimension until 1939 when Pan American joined. The post-1945 IATA immediately had to handle worldwide responsibilities with a more systematic organization and a larger infrastructure.
This was reflected in the 1945 Articles of Association and a much more precise definition of IATA's aims than had existed before 1939.
- To promote safe, regular and economical air transport for the benefit of the peoples of the world, to foster air commerce, and to study the problems connected therewith;
- To provide means for collaboration among the air transport enterprises engaged directly or indirectly in international air transport service;
- To cooperate with the newly created International Civil Aviation Organization (ICAO - the specialized United Nations agency for civil aviation) and other international organizations.
In those early days, ICAO coordinated regional air navigation and support for airports and operational aids in countries which could not themselves afford such services. IATA provided airline input to ICAO and to sessions of the International Telecommunications Union on wavelength allocation.
The standardization of documentation and procedures for the smooth functioning of the world air transport network also required a sound legal basis. IATA helped to mesh international conventions, developed through ICAO, with US air transport law which had developed in isolation prior to World War Two. The Association made a vital input to the development of Conditions of Carriage the contract between the customer and the transporting airline. One early item on the legal agenda was revision and modernization of the Warsaw Convention - originally signed in 1929 - on airline liability for passenger injury or death and cargo damage or loss. This work continues.
Once they were operating within a sound technical and legal framework, airlines' next requirements were for answers to questions such as: who can fly where? What prices are to be charged? How is the money from multi-airline journeys - that is, interlining - to be divided up, and how do airlines settle their accounts?
The Chicago Conference of 1944 which gave birth to the Chicago Convention tried to achieve a multilateral answer to the first two questions, but failed to do so. The questions of who flies, and where, were resolved on a bilateral basis. The benchmark Bermuda Agreement of 1946 between the US and the UK was the first of almost 4,000 bilateral air transport agreements so far signed and registered with ICAO.
In the early days, governments insisted on the right to oversee the prices charged by international airlines but could not, in practical terms, develop those prices for themselves. IATA was delegated to hold Traffic Conferences for this purpose, with all fares and rates subject to final government approval. The aim was twofold: ensuring that fares and rates would not involve cut-throat competition, while ensuring that they could be set as low as possible, in the interests of consumers.
A coherent pattern of fares and rates pattern was established, avoiding inconsistencies between tariffs affecting neighboring countries - and thereby avoiding traffic diversion. The predictability of fares and rates in this pattern also enabled airlines to accept each others' tickets on multi-sector journeys and thus gave birth to interlining. Today, 50 million international air passengers a year pay for their ticket in one place, in one currency, but complete their journey using at least two, and sometimes five or more, airlines from different countries using different currencies.
The first worldwide Traffic Conference was held in Rio de Janeiro in 1947. It reached unanimous agreement on nearly 400 resolutions covering all aspects of air travel.
Fare construction rules for multi-sector trips, revenue allocation - pro-rating - rules, baggage allowances, ticket and air waybill design and agency appointment procedures were typical details agreed at this pioneering meeting.
Today, that pioneering work is reflected in the currently applicable IATA Resolutions dealing with these and many other subjects. Notable examples are:
- The Multilateral Interline Traffic Agreements: These are the basis for the airlines' interline network. Close to 300 airlines have signed them, accepting each others' tickets and air waybills - and thus their passenger and cargo traffic - on a reciprocal basis.
- Passenger and Cargo Services Conference Resolutions: These prescribe a variety of standard formats and technical specifications for tickets and air waybills.
- Passenger and Cargo Agency Agreements & Sales Agency Rules: These govern the relationships between IATA Member airlines and their accredited agents with regard to passenger and cargo.
Debt Settlement between airlines, largely arising from interlining, takes place through the Clearing House, which began operations in January 1947. During its first year, 17 airlines cleared (US) $26 million. The IATA Clearing House today.
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