Airspace management, instability impact GCC growth potential, warns IATA CEO

The GCC must improve its airspace management and co-operation between states or face reduced growth potential, the director general and CEO of the International Air Transport Association (IATA) has warned.

Speaking at a roundtable in Dubai, Alexandre de Juniac said: “Aviation is a priority for this region but it’s been a pity that prosperity, growth and international exposure are being slowed down by the problem of airspace.”

Asked if progress has been made with the long-standing issue, he replied “not really”.

The Syria conflict, Qatar blockade and war in Yemen pose challenges of “reintegration”, he said.

“The key issue is to improve co-operation between states.”

Moreover, with large airline capacities and pressures on yields, he anticipates Middle East growth will be a “bit below the average” with Asia once again spearheading demand.

According to IATA’s latest report for November, Middle East carriers saw a 2.8 per cent rise in international passenger – the lowest among the regions for a third consecutive month.

Capacity rose 5.6 per cent and load factor slipped 1.9 percentage points to 69 per cent, the report found.

Globally, De Juniac said rising protectionism will have macro economic consequences and the second major challenge is infrastructure, with governments “needing to make decisions and the right ones”.

With the UK facing the prospect of a no-deal Brexit at the end of March, the CEO didn’t anticipate flights would grind to a halt, but said the first guidelines are based on 2018 traffic and don’t take into account 2019 growth.

“This constraint is too strict on the traffic between the UK and EU,” he said.

Drone-related incidents at London Gatwick and London Heathrow pose major problems for key hubs and while it was important to create uniformity, airports should be left to decide how best to implement boundary restrictions as approaches vary, he added.

Despite all these external factors, IATA anticipates 6 per cent demand growth in 2019 and positive developments with biometrics, RFID luggage tags, new IATA Pay system and low-cost growth set to improve the passenger experience.

IATA Pay is a new payment option announced this week which allows consumers to purchase a ticket directly from an airline website. It offers high levels of security to both the user and recipient and can be instantaneous.

“We can’t talk of a downturn … 2019 should be a decent year,” De Juniac stated.