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Airports and Air Traffic Control must reduce costs

With military operations underway in Iraq, the airlines need to work quickly and closely with governments, regulatory bodies and…

With military operations underway in Iraq, the airlines need to work quickly and closely with governments, regulatory bodies and industry service providers to ensure that civil aviation will not be crippled by this conflict, said IATA Director General & CEO Giovanni Bisignani. I have written to some 200 airports and ATC provides to urge them to implement financial contingency plans, in order to freeze or even reduce charges and rates in this difficult period.

Still struggling to recover from two years of staggering industry losses, airlines are looking for full and immediate cooperation from their industry partners. In 2000-01 and according to independent sources, the operating margins reached 27.6% for airports and 23.4% for air navigation service providers.

Some airports and air navigation services providers have already announced plans to increase their charges. It would be irresponsible for any service provider to consider rate increases simply because traffic has dropped. They should be looking at reducing costs to meet the lower levels of revenues, instead of raising prices to meet revenue and profit targets, Bisignani added.

Speaking last weekend in Montreal at the ICAO (International Civil Aviation Organisation) Air Transport seminar, Bisignani called for effective economic regulation of monopoly service providers. Operating without marketplace discipline, airports and air navigation providers must be kept from abusing their monopoly position. Competitive pressure forces airlines to constantly reduce their costs. Government regulators must force airports and air traffic control providers to do the same.

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Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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