Iata seeks global consumer protection regulation

Globally, the issue of consumer protection regulation in the aviation industry has not been properly addressed, as there are different approaches by individual countries and airlines of the world, without international standards.

However, world aviation body has disclosed plans to take a new approach to regulate the consumer protection system, stressing that before now, the industry does not oppose sensible, well thought-out regulation, developed with participation from all stakeholders.

Indeed, it sees consumer protection regulation advanced in partnership with the industry and based on global standards as a cornerstone of success in making aviation so safe.

For this reasons, the International Air Transport Association (IATA) has expressed worrisome on the absence of consumer protection regulation partnership approach or reliance on global standards, when compared to partnerships on the other issues in air transport.

The international body noted that the industry has a proliferation of prescriptive, unharmonized passenger rights regimes around the world that has created difficulties for the industry and confusion for customers.

According to IATA, the purpose of many of these regulations appears to be to defend passengers from airlines, that, has resulted in rules which reduce consumer protection and convenience – through higher fares, less choice, and more confusion, and which raise costs for airlines that must comply with a excess of differing and often conflicting regulatory regimes.

It noted that airlines already have many policies in place to ensure passengers are looked after, citing the voluntary commitment to repatriate passengers in Europe.

Meanwhile, IATA members have also unanimously agreed core principles on consumer protection that is aligned with the International Civil Aviation Organization (ICAO).
“These examples, and others, show that the industry is able to safeguard passenger interests without the need for overly prescriptive and punitive government regulation. We are here to support this message, but to be truly effective it needs to be communicated by everyone in aviation”, said IATA.

Speaking at the World Passenger Symposium, Hamburg recently, the Director General, Tony Tyler said: “I have said that aviation is a team effort. Airlines compete intensely for each passenger, but as an industry, we also work together to develop the global standards and best practices that enable connectivity around the world”.
“Over the next few years, we have the opportunity and ability to transform the passenger journey, providing a more comprehensive and transparent shopping experience and a more pleasant and predictable trip”.

Said he: “Our milestone year is, by historical measures, a very good one for aviation. Demand for connectivity is strong and fuel prices have fallen significantly—although less so for airlines whose home currencies have lost value against the US dollar. Still, after many years of hard work and restructuring, the industry is on a path toward financial sustainability”.

For 2015, Tyler stated that the body expected an industry net profit of $29.3 billion on revenues of $727 billion, for a net profit margin of 4 per cent, generating a return on capital of 7.5 per cent.

He added that for the first time, the industry on average would be creating value for its equity investors, maintaining that for any other industry, earning the cost of capital is the absolute minimum performance expected.
“So we should not feel the need to apologize for achieving a 4 per cent net profit margin. I suspect future investors will demand more than that after so many years of the destruction of shareholder value!” he said.

The DG continued: “They will do that as the demand for connectivity continues to grow. This year airlines will carry 3.5 billion passengers and that figure is expected to more than double in 20 years. The task before us is how to work together to accommodate that growth, while upholding customers’ expectations for their air travel experience”.

He however noted that, after investing billions in airport security processes, “it is disappointing that our customers repeatedly tell us that the security checkpoint is a universal pain point. Lack of standardization across countries also hurts us. One in five travelers say they are not sufficiently informed about security screening procedures, according to our 2015 Global Passenger Survey”, he pointed.

According to him: “Our passengers expect aviation to be safe and secure. They also want aviation to be sustainable—alongside all other industries. Sustainability is the license to grow. As an industry we are committed to achieving carbon neutral growth from 2020, with a 50 per cent reduction in net CO2 emissions by 2050 compared to 2005.
“And we will do that with improvements in technology, operations, infrastructure, and the implementation of a global market-based measure (MBM).
This too is a team effort. For example, the solid work that the industry has done to prove that sustainable aviation fuels are safe and effective must be followed-up by governments with measures to ensure that it is commercially viable in terms of supply and cost”.
“And we are counting on governments to achieve a historic agreement at the 39th ICAO Assembly next year on a framework for a global and mandatory carbon offsetting scheme. As we saw with recent events at Volkswagen, customers expect companies to live up to their environmental commitments”.
“As an industry, we need the ability to engage with our customers in real time via text message, email or social media, to update them on their flight status, gate changes, wait times at security and immigration, even what traffic is like to and from the airport. We also need to be able to communicate with other travel providers pro-actively so that, for example, car services and hotels are automatically informed when a customer is delayed or rerouted”, Tyler stated.

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on Oct 23, 2015

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