Do Airline Industry Associations Have A Future?
Following two conspicuous defections from regional airline associations in 2015, there must be questions about the role of industry bodies in future.
The issue is further complicated when a European, cross-association grouping is set up to achieve a special purpose.
The effects of rapid industry change, both in operations (LCCs and the Gulf carriers) and distribution (the new players and attempts to regain product control) are driving wedges between airlines who previously had a greater commonality of interest in lobbying governments.
In the US, Delta argued that “The $5 million that Delta pays in annual dues to A4A can be better used to invest in employees and products to further enhance the Delta experience, and to support what we believe is a more efficient way of communicating in Washington on issues that are important to Delta customers and employees”. The trigger difference was over A4A’s lobbying for airways privatisation.
IAG left AEA on broader policy grounds: “We believe global liberalisation of our industry is fundamental to our future growth and we are not willing to compromise on this fundamental matter”; IAG then joined ELFAA, saying, “We look forward to working with ELFAA and its member airlines on a full range of policy and regulatory issues including the pursuit of further aviation liberalisation.” That association had previously been the stronghold of LCCs. Then, to add spice to the situation, applying the formula that my enemy’s enemy is my friend, the CEOs of Air France-KLM, Lufthansa and IAG, along with their peers in Ryanair and EasyJet, joined forces to promote measures for greater efficiency, better airport regulation, reduced taxes and prevent ATC strikes.
Meanwhile the global association, IATA, seemingly continues from strength to strength.
- Are regional associations still valuable as lobby groups?
- Can they effectively represent group views on economic regulatory issues?
- Should they restrict roles to lobbying for less consumer regulation and on matters such as airport charges?
- How is it that IATA can remain intact while regional bodies appear to be embroiled in conflict?
- Does IATA really represent the global industry when 30% of seat capacity (on LCCs) is not represented?
- AACO, Secretary General, Abdul Wahab Teffaha
- ACI EUROPE, Director General, Olivier Jankovec
- AEA, Chief Executive Officer, Athar Husain Khan
- Airlines 4 Europe, Managing Director, Thomas Reynaert
- European Low Fares Airline Association, Secretary General, John Hanlon
- European Regions Airline Association, Director General, Simon McNamara