Kuala Lumpur - “Air transport has brought enormous and positive developments to Malaysia. The elements for success are in place. Following international principles with a focus on cost efficiency will help air transport play its role as a catalyst for economic activity even amid the enormous crisis in the global economy. Efficient air transport improves business competitiveness and supports tourism,” said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).

In a speech to the Malaysian International Chamber of Commerce and Industry (MICCI), Bisignani identified three priorities:

Efficient infrastructure: “Malaysia’s bold move to reduce landing fees at Kuala Lumpur International Airport (KLIA) by 50% for two years will keep KLIA competitive, supporting Malaysian tourism and international business. It demonstrates a clear understanding by the government and Malaysia Airports Holdings Berhad that competitive costs drive traffic and fuel economic activity. Other airports and governments should follow Malaysia’s example,” said Bisignani.

Bisignani also welcomed the decision to focus efforts on building a strong KLIA hub. In February the Malaysian Government abandoned plans for a second (low cost) airport in favour of expanding KLIA. “The priority must be on providing efficient infrastructure that delivers low costs for all airlines. Cross-subsidisation is not acceptable. Common facilities and services, such as landing charges and security, must be borne equally. And access to all facilities must be open to all airlines. These are United Nations principles agreed at the International Civil Aviation Organization (ICAO), which I am sure that the Government of Malaysia will follow,” said Bisignani.

“Now Malaysia must build these good decisions with a longer-term strategic plan focused on maximising the economic benefits from its air transport infrastructure investments,” said Bisignani.

Environment: IATA’s Four Pillar Strategy of technology investment, efficient infrastructure, effective operations and positive economic measures is delivering results. In 2009 aviation’s carbon footprint will shrink by 4.5%. Of this, 2.5% derives from capacity reductions. The remaining 2% is a direct result of efficiency gains with the Four Pillar Strategy.

Bisignani praised the continuous descent approach trials currently underway at KLIA by Malaysia Airlines, Singapore Airlines and AirAsia as an example of the Four Pillar Strategy at work. “Each landing with a continuous descent approach has the potential to save between 160kg and 480 kg of carbon through reduced fuel burn. That is good news for the environment and helps reduce the fuel bill,” said Bisignani.

“While the industry struggles with technical achievements, many Western governments pile environmentally-branded taxes on travellers. By 2012, the UK’s Air Passenger Duty will add GBP85 to the cost of every Malaysian vacation starting in the UK. And ETS proposals in Europe, the US and elsewhere could add billions more in cost. Each dollar added to the cost of travel to bail-out bankers puts Malaysian tourism jobs at risk. Malaysia must be a strong voice to fulfill the vision of Kyoto with a globally coordinated ICAO solution,” said Bisignani.

Commercial freedoms: Airlines cannot take advantage of commercial freedoms that other businesses take for granted. “Markets are closed until governments negotiate them open, and foreign ownership restrictions have resulted in a hyper-fragmented industry of 2,323 players that is vulnerable to economic shocks. Airlines facilitated the global village. Because of outdated rules, we are the last to be able to take advantage. This crisis must be an opportunity to modernise,” said Bisignani.

“ASEAN has missed the December 2008 deadline to open markets between capital cities on a multilateral basis. Malaysia must be a strong voice encouraging ASEAN member states to fulfill their obligations under the ASEAN Roadmap for the Integration of the Air Travel Sector (RIATS) and to meet the 2010 milestone. ASEAN must aim high. A single market including ownership liberalisation by 2015 would be a major leadership step forward,” said Bisignani. The IATA-led Agenda for Freedom initiative has brought together 14 governments and the European Commission in an effort to deliver change to outdated restrictions on ownership and market access that are unique to aviation.

Bisignani is visiting Kuala Lumpur in advance of the 65th IATA Annual General Meeting and World Air Transport Summit which will take place in Kuala Lumpur from 7-9 June 2009. Over 700 aviation leaders from airlines, manufacturers and industry partners are expected to meet in Kuala Lumpur for this event. “Our Kuala Lumpur AGM will be one of the most important ever with critical discussions on key tools to help airlines survive this crisis and build a sustainable and efficient future while opening new commercial opportunities,” said Bisignani.

View Giovanni Bisignani's full speech

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Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.