Successfully developing MENA aviation

The International Air Transport Association (IATA) outlined five areas in which opportunities exist to further develop aviation in the Middle East and North Africa (MENA) to benefit the region’s economies.

“MENA is a growing force in aviation. For example, over the last decade, the Middle East share of global international traffic has risen from about 5% to about 11.5%,” said Tony Tyler, IATA’s Director General and CEO. “The rise of the Gulf carriers is an amazing story. They are leading Middle East traffic growth that is still in the double digits. And even if we look at the less-headline-grabbing carriers in North Africa, we are seeing a healthy demand performance,” continued Tyler.

Speaking at the Arab Air Carriers Organization (AACO) Annual General Meeting in Algiers, Tyler identified opportunities to build a stronger industry in MENA.

Safety: “Safety is a top priority and global standards such as the IATA Operational Safety Audit (IOSA) are critical to achieving industry-levels of safety across MENA. In the first ten months of 2012 there has not been a single Western-built jet hull loss in the MENA region. “This is a great achievement. However, if we look at all accidents the picture is different. The accident rate for non-IOSA carriers is trending at about three-and-a-half times worse than those on the registry. This is clear evidence that IOSA improves safety. The African Union is moving towards mandating IOSA. Governments of the Arab Civil Aviation Commission should be reminded of their commitment dating back to 2006 to make IOSA compulsory for the carriers in their region. Flying is safe. But it is our collective responsibility to always make it safer,” said Tyler.

Aviation as a catalyst for growth: “The Gulf area has prospered from big thinking on aviation. In the United Arab Emirates, for example, a study by Oxford Economics recently concluded that aviation supports some 15% of GDP and 14% of total employment. Building on world class infrastructure and business-friendly policies, the Gulf carriers are now extending their reach through alliances, equity stakes and innovative partnerships. I would encourage similar big thinking across North Africa to help spur economic development and GDP growth. For example, why not move forward with developing a major North African hub?” said Tyler.

Air Traffic Management (ATM): Growing traffic in the MENA region must be matched with sufficient airspace capacity. “MENA must avoid the inefficiencies that we see in Europe. There is no room for complacency. In the Gulf, ATM delays are already nearing crisis levels. Evolving East-West traffic patterns are creating new challenges across the region, including North Africa. Successfully handling this will require cooperation among states. Some of this is already starting and we hope for a successful and speedy conclusion. It would be a shame if the potential of the investment in ground infrastructure was held back by a lack of progress in the air. The experience of Europe should ring a clear warning. If congestion problems are allowed to grow they can quickly turn unmanageable. And the bigger they get, the more difficult the solution,” said Tyler.

Environment: Sustainability is a key priority for the global aviation industry. Aviation contributes about 2% to global carbon emissions. Tyler reiterated the industry’s commitments to manage and reduce its carbon emissions. “No other industry has made tougher commitments to emissions reductions than aviation. We are making good progress toward our targets to improve fuel efficiency by 1.5% annually to 2020, cap net emissions from 2020 with carbon-neutral growth, and cut net emissions in half by 2050 compared to 2005. Along with new technology, biofuels and better infrastructure, market-based measures (MBM) will also be needed—at least temporarily. And we must ensure that these measures are developed with a global approach through the International Civil Aviation Organization (ICAO),” said Tyler.

The airline industry is working towards developing consensus on a fair and equitable global solution for MBMs that would feed into the ICAO process in advance of the 2013 Assembly. “AACO has been instrumental in providing some very sensible proposals,” said Tyler.

The industry’s pragmatic approach is in stark contrast to the European Union, which continues to pursue the unilateral and extra-territorial inclusion of international aviation in its Emissions Trading Scheme. “It is a roadblock instead of a stepping stone. States outside of Europe see this as a challenge to their sovereignty. This is dividing the world and recklessly risking a trade war. The challenge is for Europe to create space to arrive at a successful global conclusion for MBMs. Europe needs to find a way of relieving the pressure that it has created. There is no time to lose. We must focus our united industry efforts on helping forge an agreement at the ICAO Assembly less than a year away,” said Tyler.

New Distribution Capability: The recent approval of a foundation standard for a new distribution capability (NDC) will enable airlines to sell their full range of products through all distribution channels. “It is time to modernize distribution. Our customers expect more. When they buy the hotel component of their travel, they can choose the room category, views, package it with a spa treatment, and add breakfast or dinner options. Compare that to the options for buying a plane ticket from an agent. We have lots of ways to add value to our passenger’s travel experience. But the legacy model that powers current GDS systems cannot efficiently facilitate making these known to the traveler. The NDC will allow airlines to make their product offers available in the way that they would like to present their products. It will allow GDSs and new entrants to develop new solutions to revolutionize airline retailing,” said Tyler.

Read Tony Tyler’s full speech