State of the MENA Industry (Aviation)

On 19 October 2010 the Arab Air Carriers Organisation (AACO) held its 43rd AGM in Cairo. Mr Giovanni Basigniani DG/CEO of  IATA addressed the AACO AGM on 20 October 2010 (Click to read the full remarks). Over the last decade MENA went from 5% to 11% of the global passenger traffic. The MENA region has more than $200 billions in aircraft orders. This is an admirable performance and a great challenge to sustain these successes.

I will touch upon three (3) of the topics that Mr. Basignani talked about; Safety, Environment and Government Involvement.

Safety
In 2009 the hull loss rate of western built aircraft was 0.71 accidents per every million flights a 36% improvement over the last decade. MENA had no hull losses in 2006 but the rate jumped to 3.32 accidents per million flights in 2009, 4.6 times the world average (click here for the 2009 Aviation Safety Performance). MENA airlines have so far this year eight (8) accidents of which half of them were in Iran.
The growth of aviation in MENA should be accompanied with improved Safety. Global standards such as IOSA (IATA Operational Safety Audit) are important but the region must pay more attention to safety standards. AACO should play a greater role in bringing up safety standards by working closer with affected carriers.

Environment
Qatar Airways has been a pioneer in the region in alternative fuels. The region is committed to the reduction of carbon emissions with an average fleet age of 11 years compared to a global 13 years average, it is contributing to improved fuel efficiency. Implementation of performance based navigation at six airports in the region and improving en-route airspace in the gulf is saving thousands of tons in carbon emissions.
In the last ICAO General Assembly, Aviation as a sector managed to ensure that market distortions are removed and that emissions are accounted for once. How would that reflect on EU-ETS (European - Emission Trading Scheme) no one is sure. However, 120 countries have formally registered their opposition to EU-ETS.

Government Involvement
The airline industry should be allowed to operate like a normal business. Government interference with the bilateral system produces very low profit margins in good years and massive losses in bad ones. Import fuel taxes and unilateral runaway charges by airports should be curbed. The airlines should not become cash cows to governments and airport concessionaires, a balanced consultative approach should be the means to meeting end user needs. This is not endemic to MENA only but is also seen in Europe. Open skies agreements with Europe and the USA and continuing restrictions within the region, has meant that long and ultra long range traffic developed faster than intra regional traffic. Airlines should have the commercial freedom to fly where business is.