WORLD PROPERTY CHANNEL ®

Giovanni Bisignani

Airlines around the world lost $1.7 billion in 6 days when they were forced to ground planes, delay freight traffic and leave thousands of passengers stranded at shutdown terminals, according to the International Air Transport Association.

In a prepared statement today from Geneva, Giovanni Bisignani, IATA's Director General and CEO, applauded the European Commission's announcement on plans to provide relief to the air transport sector in the aftermath of extra-ordinary airspace closures last week.

Ash plumes from an Icelandic volcano forced aircraft to remain on the ground until the dangerous clouds weakened in strength.

"I applaud Vice Presidents Kallas, Almunia and Rehn for their quick action says Bisignani.  "Airlines lost revenues of US$1.7 billion in just six days, with the greatest impact on European carriers.

"These urgent measures will provide much needed assistance to airlines at a time when their financial resources are stretched."

IATA highlighted its particular support for three longer-term elements of today's announcement:

Single European Sky:

"The events of last week clearly showed the need for the Single European Sky. I fully support Vice President Kallas in his efforts to accelerate the appointment of a European Network Manager by the end of this year.

"But that is one element of the Single European Sky. We also need to accelerate plans for the implementation of functional airspace blocks and a performance framework to ensure that the system is delivering efficiencies.

"We are looking for a strong commitment from Europe's transport ministers on all three of these elements when they meet on 4 May."

IATA estimates the reduced delays and greater efficiency that a Single European Sky will bring will have broad benefits. It is estimated that it will save EUR 5 billion and reduce carbon emissions by 16 million tons a year.

Financial Compensation:

"This was an event completely beyond the control of airlines. We don't want bailouts, but government compensation for costs--including the cost of lost revenue and providing extended care to passengers--should be provided to airlines in line with Europe's established rules for compensating companies in such extra-ordinary events," says Bisignani.

Improved Aviation Risk Management for Volcanic Activity:

"Safety is always our top priority. We fully agree that we need a better framework for decision making to ensure safe operations at times of volcanic activity. IATA is already working with the International Civil Aviation Organization (ICAO) to apply lessons learned from this event to improve global standards and best practices."

Establishing an Aviation Platform:

"The events of last week showed that aviation is critical to Europe's life and economy. Too often aviation is over-taxed and micro-regulated.

"A platform to raise aviation on the policy agenda through industry/government interaction is a much needed development to follow-up on these proposals and to build a more competitive future for the sector," says Bisignani.

IATA also welcomed the announcement of flexibility on slot rules, flight restrictions, and air navigation payments that will provide some short-term operational and financial relief.

Please see related Real Estate Channel postings:

• VOLCANO UPDATE NO. 4:  They're Flying Again!, April 21, 2010.
  
• VOLCANO UPDATE No. 3: Ash Cloud Cripples European Air Traffic for Sixth Day, April 20, 2010
• VOLCANO UPDATE No. 2: Brits Expect to Fly Again Tomorrow but Other European Airports Will be Down Until Thursday, April 19, 2010
• VOLCANO UPDATE No. 1 : Iceland Ash Blast Triggers Chaos as More European Airports Forced to Close, April 16, 2010
• SPECIAL REPORT: Massive Volcano Ash Cloud from Iceland Grounds Air Traffic Across UK, April 15, 2010.

---