January 25, 2011-  On Thursday the International Air Transport Association (IATA) called on the Canadian government to improve its global competitiveness in air transport, travel and tourism by working with industry to address issues of taxation and regulation, security and the environment. 

“Air transport is key to Canada’s economy.  Canada is a great place to visit and to do business, but the country is losing its competitive edge.  Canada needs a comprehensive strategy to keep it competitive in the world market,” said Giovanni Bisignani, IATA’s Director General and CEO.  Bisignani outlined short and long-term opportunities for Canada in a speech to the Montreal Council on Foreign Relations.

“Canada and other governments must also take a global approach to security.  With today’s terror threat, we need to find bad people, not the bad objects that airport checkpoints were designed to detect.  We need to deploy airport checkpoints that use intelligence from government and airline sources to match checks with a passenger’s risk level.  We look forward to working with governments through the International Civil Aviation Organization (ICAO) to build a Checkpoint of the Future,” said Bisignani.

Bisignani also outlined a long-term vision using technology to allow passengers to be screened without time wasted in queues. “My vision is for hassle-free tunnels of technology. Passengers would identify themselves with their fingerprint, biometric passport and bar-coded boarding pass on a mobile device. After a risk-level assessment, most passengers would stroll through a tunnel of technology that checks for all forms of terrorist elements without unpacking or undressing. It’s in everybody’s interest to use the billions being spent on security to make it more effective and more efficient,” said Bisignani. 

On environment, “No industry has a future unless it is environmentally sustainable.  Aviation is the most ambitious and united industry in combating global climate change. Airlines, airports, air navigation service providers and manufacturers are committed to improving fuel efficiency by 1.5% annually to 2020; capping net emissions with carbon-neutral growth from 2020 and cutting net emissions in half by 2050 compared to 2005. The challenge is to keep governments focused on effective measures to reduce emissions. For Europe’s cash-strapped governments, environment is an excuse to raise taxes.  I urge the Canadian government to formally oppose Europe’s plans to bring international aviation into its emissions trading scheme and support a global approach through ICAO,” said Bisignani. 

On profitability, Bisignani’s call for renewed competitiveness came as the airline industry entered a second consecutive year of profitability. Following a $15.1 billion profit in 2010, IATA is predicting that this will shrink to $9.1 billion in 2011. IATA contributed to these profits with cost savings since 2004 that now exceed $55 billion. “For an industry that generates nearly $600 billion in revenues the margins are pathetic. The 2.7% margin that airlines earned last year does not even cover the cost of capital which is around 7-8%. And the margin will shrink to 1.5% this year,” said Bisignani. 

IATA is using this window of profitability to host Vision 2050 in Singapore on 11-12 February. “Over 30 strategic thinkers will join me to look ahead with a mission to lay the foundation for air transport to have the technology and infrastructure to meet the needs of 16 billion passengers sustainably and profitably in 2050,” said Bisignani. Vision 2050 will benefit from the inspirational leadership of Singapore’s Minister Mentor Lee Kuan Yew and the competitive expertise of Harvard University’s Professor Michael Porter. 

“IATA is proud to call Montreal its home and contribute to Montreal’s status as a global capital for aviation. The future for this industry is challenging. But I am confident of aviation’s future and of Montreal’s leadership role in shaping this industry,” said Bisignani.