By Sarmad Qazi
After an overall dismal performance this year, the airline industry outlook for 2010 looks “fragile” at best unless governments start to open up markets, a senior IATA official warned yesterday.
Speaking on the second day of the Doha Aviation Summit, the regional vice-president for the Middle East and North Africa (MENA) region of the IATA (International Air Transport Association), Dr Majdi Sabri, said much depends on the coming together of governments to start allowing airlines to operate like any other business, such as banks and telecoms.
“2009 was (an) annus horribilis (horrible year) due to a global recession, reduced demand, a sharp drop in revenues and pandemic fears.
“Being in the survival mode, the industry losses will continue in 2010,” Sabri said.
Industry revenues have so far fallen by 15% after the recession with the total revenue disappearing in 2009 standing at $80bn. Airlines are expected to lose $11bn.  
“Our vision for the governments is to ensure a level playing field, effectively regulate safety, security, monopolies and environmental standards,” he added.
Governments have long treated their airlines as part of national security or to serve as tourism-enhancing tools, in case of national carriers. 
According to him, an IATA-backed summit “Agenda for Freedom”, to be held next month in Montreal, Canada will push for a critical mass of signatures by countries representing at least 80% of global traffic to sign a multi-national statement of policy principles.
“The state of business in the industry continues to be based on bilateral agreements (there are 3,500+ between the countries of the world) since 1940. This was 60 years ago when passenger traffic stood at 9mn. Today, it is 2bn,” he explained.
Since the 1940s, the average profit margin for airlines has been a mere 0.3% while the industry debt currently stands at $170bn. 
“The ‘Agenda for Freedom’ will allow airlines to operate like any other business; consolidate, have access to private equity. And will facilitate discussions on removing the barriers that prevent commercial freedom for airlines,” Sabri hoped. “No one cares who owns the airlines if it is safe and provides efficient service. Just as banks facilitate trade and market transactions, air connectivity facilitates trade and globalisation.”
Deeper liberalisation, according to the official, will not only address the financial un-sustainability of airlines, but will also be beneficial to employees and travel consumers.
An example of liberalisation generating demand and jobs, helping fill the airports, and stimulating traffic is the Dubai Liberal Policy that created an airport and an airline growing at 20% annually, Sabri said.
“Steps like these can avert widespread airline failures, generate cost efficiencies by improving returns and reducing fares, and can still be achieved maintaining safety, security and labour standards,” the IATA official maintained.