RESEARCHED AND PRESENTED BY

Danish Ali Bhati Darshan Barot Sandeep Yadav Shreyas Pednekar

Prateek Patil
Vishnu

INTERNATIONAL AIR TRANSPORT ASSOCIATION

Was founded in Havana, Cuba in 1945. It is the prime vehicle for inter-airline cooperation in promoting safe, reliable, secure and economical air services for the benefit of the world's consumers. A very few industries can match the dynamism the growth in the air transport sector, which would have been much less spectacular without the standards, practices and procedures developed within IATA.

INTERNATIONAL AIR TRANSPORT ASSOCIATION

To promote safe, regular and economical air transport for the benefit of the peoples of the world, to foster air commerce, and to study the problems connected therewith. To provide means for collaboration among the air transport enterprises engaged directly or indirectly in international air transport service

To cooperate with the newly created International Civil Aviation Organization (ICAO - the specialized United Nations agency for civil aviation) and other international organizations.

EARLY DAYS IN THE AIR TRANSPORT SECTOR

Before IATA came into the picture , ICAO coordinated regional air navigation and support for airports and operational aids in countries which could not themselves afford such services.

The standardization of documentation and procedures for the smooth functioning of the world air transport network also required a sound legal basis which the ICAO couldnt conjure up.

EARLY DAYS IN THE AIR TRANSPORT SECTOR

In the early days, governments insisted on the right to oversee the prices charged by international airlines but could not, in practical terms, develop those prices for themselves. Various questions such as Who can fly where? What prices are to be charged? How is the money from multi-airline journeys that is, interlining - to be divided up, and how do airlines settle their accounts? were yet to be answered.

EARLY DAYS IN THE AIR TRANSPORT SECTOR

A coherent pattern of fares and rates pattern was never established Avoiding inconsistencies between tariffs affecting neighboring countries - and thereby avoiding traffic diversion was yet to be brought about. The Warsaw Convention - originally signed in 1929 - on airline liability for passenger injury or death and cargo damage or loss was still not followed strongly.

OLIGOPOLISTIC MARKET

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Oligopolies can retain long run abnormal profits. High barriers of entry prevent sideline firms from entering market to capture excess profits Oligopolies have perfect knowledge of their own cost and demand functions but their inter-firm information may be incomplete. Buyers have only imperfect knowledge as to price, cost and product quality.

THE AVIATION INDUSTRY

The distinctive feature of the aviation industry was interdependence. It was composed of a few large firms. Each firm was so large that its actions affect market conditions. Contemplating a market action, an aviation firm would have take into consideration the possible reactions of all competing firms and the firm's countermoves It was very much like a game of chess or pool

FORMATION OF IATA (CARTEL FORMATION)

A cartel is a formal (explicit) agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production.

Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products. Cartel members may agree on such matters as price fixing, total industry output, market shares, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies, and the division of profits or combination of these.

FORMATION OF IATA (CARTEL FORMATION)

Formed in 1945, IATA or International Air Transport Association is an example of cartel formation. It is the prime vehicle for inter-airline cooperation in promoting safe, reliable, secure and economical air services - for the benefit of the world's consumers. The modern IATA is the successor to the International Air Traffic Association founded in the Hague in 1919 - the year of the world's first international scheduled services. At its founding, IATA had 57 members from 31 nations, mostly in Europe and North America. Today it has some 240 members from 126 nations in every part of the globe.

FORMATION OF IATA (CARTEL FORMATION)

Automation became commonplace in airline operations during the 1960s. Standardization in its use was less commonplace and IATA began its involvement in perfecting standard message formats for intercompany data exchange, which continues to this day. The goal has been to save money for the airlines, while enhancing airline service. IATA's mission is to represent, lead and serve the airline industry.

IATAS MISSION

Air transport is one of the most dynamic industries in the world. The International Air Transport Association (IATA) is its global trade organization. IATAs members comprise some 240 airlines - the world's leading passenger and cargo airlines among them - representing 84% of total air traffic. IATA seeks to improve understanding of the industry among decision makers and increase awareness of the benefits that aviation brings to national and global economies.

IATAS MISSION

Air transport is one of the most dynamic industries in the world. The International Air Transport Association (IATA) is its global trade organization. IATAs members comprise some 240 airlines - the world's leading passenger and cargo airlines among them - representing 84% of total air traffic. IATA seeks to improve understanding of the industry among decision makers and increase awareness of the benefits that aviation brings to national and global economies.

IATAS MISSION

IATA's aim is to help airlines help themselves by simplifying processes and increasing passenger convenience while reducing costs and improving efficiency. The groundbreaking Simplifying the Business initiative is crucial in this area. Moreover, safety is IATA's number one priority, and IATA's goal is to continually improve safety standards, notably through IATA's Operational Safety Audit (IOSA). Another main concern is to minimize the impact of air transport on the environment.

IATAS MISSION

IATA ensures that people and goods can move around the global airline network as easily as if they were on a single airline in a single country. In addition, it provides essential professional support to all industry stakeholders with a wide range of products and expert services, such as publications, training and consulting standards, notably through IATA's Operational Safety Audit (IOSA). IATA's financial systems also help carriers and the travel industry maximize revenues.

IATAS MISSION

For the benefit for all parties involved: For consumers, IATA simplifies the travel and shipping processes, while keeping costs down. Passengers can make one telephone call to reserve a ticket, pay in one currency and then use the ticket on several airlines in several countries. IATA allows airlines to operate safely, securely, efficiently and economically under clearly defined rules. IATA serves as an intermediary between airlines and passenger as well as cargo agents via neutrally applied agency service standards and centralized financial systems. A large network of industry suppliers and service providers gathered by IATA provides solid expertise to airlines in a variety of industry solutions. For governments, IATA seeks to ensure they are well informed about the complexities of the aviation industry to ensure better, long-term decisions.

IATA'S INDUSTRY PRIORITIES

Safety and Security Financial Regulatory

Environment
Simplifying the Business Benefits to Member Airlines

SAFETY AND SECURITY

Implement a business intelligence tool for the Global Safety Information Center (GSIC) reports.

Over the last decade, the industry has been rocked by a series of successive crises and shocks. These include terrorism, pandemic threats, global economic upheavals and an unprecedented rise in the cost price of fuel. Between 2000 and 2010, airlines posted a net loss of $30 billion.
All this has made IATAs leadership more crucial than ever. The IATA Operational Safety Audit (IOSA): IOSA is the global standard for airline safety management and by 2009 airlines were required to achieve IOSA registration as a condition of IATA membership. This is the flagship component of a comprehensive strategy that includes audits, cargo, flight operations, infrastructure, training and data collection.

FINANCIAL

Industry Charges
Secure reductions to charges, taxes and fees of US$750 million by end 2013, while ensuring proposals for increases are reduced by a total of at least 30%. Seven major providers/states to commit to more favorable pricing agreements. Improve service from seven providers/states, for fuel supply, airport infrastructure or air traffic control operations. Deliver commitment for longer-term savings of US$750 million until end 2016.

IATA Settlement Systems

Ensure that 99.95% of funds are settled on time. Secure approval for guidelines for global standards for agent financial criteria and financial securities

Migrate at least 175 airlines to the Simplified Interline Settlement (SIS) platform. Direct Data Service (DDS) database to exceed 85% of global indirect sales

REGULATORY
EU Parliament and Council do not adopt positions on the revision of the EC slot Regulation that depart from the four cornerstones of the Worldwide Slot Guidelines. Prevent the implementation of other costly new regulatory burdens on the industry. Eliminating Barriers to Profitable Growth Improve perceptions of the role of aviation in economic and global competitiveness. Ensure that the recommendations of the NEXTGEN Advisory Committee are addressed by the FAA. Secure airlines' full involvement in decision making on SESAR issues.

ENVIRONMENTAL

Avoid a global climate-related tax on passengers, carbon or fuel. Secure ICAO commitment on developing a global framework for aviation to replace EU ETS in time for the ICAO 38th Assembly in 2013. Secure ICAO commitment on establishing a CO2 standard for new aircraft types for consideration by ICAOs Committee on Aviation Environmental Protection (CAEP). Secure commitments from five governments to support the construction of commercial scale biofuel plants.

SIMPLIFYING THE BUSINESS

Successfully complete the Baggage-management Improvement Program (BIP), expand use of Electronic Miscellaneous Documents (EMDs) to 75% of passenger volumes and implement at least three Fast Travel solutions at 100 airline/airport pairs.

Launch two new STB Projects on passenger facilitation and airline distribution.
Progress towards 100% e-freight with 15% e-Air Waybill (eAWB) global penetration in 2012.

BENEFITS TO MEMBER AIRLINES

Reduce IATAs service fees and charges to members by US$ 6 million. IATA also strengthened its position as the voice of the industry, with firm advocacy and lobbying to focus governments on the long term issues for viability of aviation, such as liberalization, environment and taxation.

VISION 2050 SHAPING AVIATIONS FUTURE

Vision 2050 represents IATAs long term vision for the air transport industry. The industry supports the global economy, supporting 32 million jobs across the globe and $3.5 trillion in economic activity. And the industry is growing. By 2050, it is estimated that some 16 billion passengers and 400 million tonnes of freight will need to be flown yearly. However, with historical margins of 0.1% over the last 40 years, the industry faces enormous challenges, including financial sustainability. To prepare the industry for the future, IATA is working on an ambitious plan, Vision 2050, based on four pillars.

VISION 2050 PILLARS

Structuring for profitability

Sufficient and efficient infrastructure

Sustainable technology to power the industry Capability to meet the needs of the customer of the future

REFERENCE

Mr. Afaq Kadiri (SIES, Nerul) Mr. C.S. Purshotaman (SIES, Nerul)

Mr. Adhir Dhabolkar (Indian Airlines)

Mr. Mahesh Pandit (Lufthansa Airlines) www.iata.org