Alliances are ‘old fashioned’, sixth freedoms have become ‘taboo’ and why ‘fair competition is like beauty’ – initial insights from the CAPA Qatar Aviation Aeropolitical and Regulatory Summit

It is now 75 years since the aviation regulatory framework was established, and with the evolution of the industry many believe it is time for a serious global review of its relevance today. The “business of freedom” underpins 10% of global GDP and it is too important to be constrained by economic regulation that was designed to meet entirely different conditions.

What trends and opportunities await our industry? What strategic challenges and risks are we set to face in the year ahead? Discussions will cover Europe’s aviation relations with the world, a post Brexit world and its repercussions, North America’s approach to open skies, how open skies have helped Asia’s emerging markets, Africa and SAATM, airport privatisation and infrastructure, air cargo and industry sustainability.

CAPA – Centre for Aviation attempted to address those questions with its Qatar Aviation Aeropolitical and Regulatory Summit, which had more than ten hours of agenda content designed to address the latest development in aviation regulation both within the Gulf Cooperation Council countries and globally.

Here’s some of the key insights and observations from delegates during the event at the Sheraton Grand Doha Resort and Convention Hotel in Qatar.

Qatar Airways Group CEO: Alliances are ‘old fashioned’
Qatar Airways Group CEO Akbar Al Baker stated the alliance system “is old fashioned”, adding alliances are only “fashionable” and allow airlines to “burn miles on each other and use their lounges”. Mr Al Baker noted Qatar Airways is the second largest ASK contributor to the oneworld alliance.

European Commission Director General Mobility and Transport: Qatar blockade was ‘unthinkable’
European Commission Director General Mobility and Transport Henrik Hololei stated “the blockade on the state of Qatar and blockade of the transit routes was unthinkable to most of us… and unfortunately nothing much has changed. The only thing is that Qatar has shown its resilience”.

Broekema Aviation owner & principal consultant outlines ‘clear tensions’ in privatisation
Broekema Aviation Advisory Services owner & principal consultant Gerben Broekema stated there are three “clear tensions” in the airport privatisation process, including “regulatory certainty”, “the difference in the objective function to the profit and loss” and “divergence in the interest of growth”.

Croon Callaghan Aviation: Brexit will lead to a freeze of 20 million passengers per annum
Croon Callaghan Aviation partner Jim Callaghan noted Airports Council International predicted Brexit will lead to a freeze in aviation traffic of approximately 20 million passenger p/a between the UK and the EU, “which is some hideous amount of jobs and revenue… on both sides”.

Arab Air Carriers Association: ‘Fair competition is like beauty, it is in the eyes of the beholder’
Arab Air Carriers Association secretary general Abdul Wahab Teffaha stated “fair competition is like beauty, it is in the eyes of the beholder”. Mr Teffaha stated: “Every single airline complains about unfair competition… what is important when there is differences of opinion of what is fair or not, dialogue takes place… both governments will come to terms with what is important”.

LOOK OUT… Exclusive executive interviews from Doha will be published on CAPA TV in the coming weeks, as well as full coverage of the agenda sessions.

Qatar Airways CEO: Brexit or no Brexit, I believe aviation will continue as normal
Qatar Airways Group CEO Akbar Al Baker said he believes aviation will continue as normal post Brexit, but cautioned that some short term hurdles could emerge. Mr Al Baker stated: “Brexit or not Brexit, I am big believer aviation will continue as normal. People will still travel. There could be upheaval, but soon it will be business as usual”.

Holland & Knight partner: sixth freedom traffic ‘became all of a sudden taboo’
Holland & Knight partner Anita Mosner stated “in the debate over subsidies, we started to hear concerns over sixth freedoms and US carriers keeping their traffic”. Ms Mosner noted sixth freedom traffic “became all of a sudden taboo” and “so the hypocrisy and inconsistency there gave me pause particularly when you start seeing things like our traffic… so if you make the mistake of applying for sixth freedom rights in the DoT application, and you are a US carrier, they will strike it”.

COHOR MD: Auctioning is far from being a solution
COHOR managing director Eric Herbane stated “it is important that the system that allocates capacity is providing an incentive to the community… to offer not only competition but a network”. Mr Herbane added: “Auctioning is far from being a solution… I am not sure that auction will deliver an incentive because it will simply allow the airlines with the deepest pockets to buy the slot”.

‘Heathrow is the only airport where secondary trading has taken place’: IATA
IATA manager of worldwide airport slots Philip Ireland stated: “Heathrow is the only airport where secondary trading has taken place”. Mr Ireland noted: “that is a result of the ongoing lack of capacity… you can say it is anomaly”.

IATA CEO: ‘Some political circles are rejecting globalisation’s benefits’
IATA director general and CEO Alexandre de Juniac stated: “Some political circles are rejecting globalisation’s benefits. A protectionist future can only lead to a less connected and less prosperous world – economically and culturally”. Mr de Juniac emphasised that the aviation industry “must stand up for business of freedom.”

MORE INSIGHTS…
CAPA – Centre for Aviation members were able to see live updates from the CAPA Qatar Aviation Aeropolitical and Regulatory Summit and have access to over 100 briefs from the event. Find out more about how a CAPA membership provides a front row seat to global aviation news, analysis and data as it happens, with access to a comprehensive suite of tools that can be customised to your needs.

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