02 July 2007

Tear Down the Wall: IATA Block Exemption is cancelled

The EC in its infinite wisdom has chosen not to renew the Block Exemption it gave last year to the IATA Passenger Tariff Conference.

For once this is a good thing as it slowly breaks down the barriers to normal behavior by the airlines. For many years the IATA carriers (now numbering approx 250) have benefitted from operating under supra national rules. In the years before GATT and with certain strange legal mechanisms that actively worked against global trade this was understandable. With GATT and better legal frameworks for international trade, these protections are not nearly as relevant. Perhaps the biggest most telling argument is that there is now a significantly larger non-IATA component to air travel - at least regionally within each Traffic Conference. The second component of this is the alliances which means a single ticket and carrier listing even if the metal is from another airline. According to the EC now less than 5% of travel within EU (defined as EC to non-EC countries) is interlined. This therefore negates the need for the exemption.

We are encouraged by this move to make the airline world more competitive. Perhaps now IATA can go back to being an association of talkers.

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