IATA chief cautions GCC countries on airport privatization

Governments in the GCC and Middle East should adopt a cautious approach towards privatization, as past efforts have “failed to live up to their promised benefits,” the International Air Transport Association (IATA) said in a statement.

“As Saudi Arabia and others across the region consider airport privatization our message is clear and simple: talk to all stakeholders—especially the airlines—to ensure that you gain the best long-term economic and social benefits,” said Alexandre de Juniac, IATA’s Director General and CEO, speaking at the Arab Air Carriers’ Organization (AACO) AGM in Cairo.

“There is no need for governments in the region to repeat the mistakes that have been made in other parts of the world. Consultation is not just key, it is a must,” he added.

It is important that governments not only learn from past successes and failures, but also recognize that the value of airports to national development is in the connectivity they provide—which will far outweigh any short-term financial gain from concession arrangements, said de Juniac.

IATA also urged the GCC and MENA region to work on maximizing the economic and social benefits of aviation.

According to the report, aviation currently supports 2.4 million jobs and $130 billion in economic activity across the MENA region.

“Over the next 20 years we expect passenger numbers to grow by 4.3 percent annually. As aviation’s leaders we must work together and with governments to realize this potential---and the economic and social development that it will catalyze,” de Juniac said.

Meanwhile, the IATA also expressed concern for air traffic delays in the Gulf. The average delay per flight attributed to ATC issues in the region is 29 minutes. Without urgent progress, that could double by 2025 costing over $7 billion in lost productivity and adding over $9 billion to airline operating costs.

“There is an enormous amount of traffic in a limited geographic area. And the only solution is to manage the area as a whole. Governments must replace political fragmentation with collaborative cross-border decision-making. This has to happen fast or the effectiveness of the region’s hubs will be severely compromised,” said de Juniac.