Asia-Pacific airlines spend B for pax’s safety/security

MACTAN ISLAND, Cebu City (PNA) – Safety and security have been, and will continue to be the top priorities of the 17 members of the Association of Asia Pacific Airlines (AAPA).

Andrew Drysdale, Regional Director, Asia Pacific International Air Transport Association (IATA) Singapore, who was one of the guest speakers in the recently concluded 46th AAPA Assembly of Presidents held here, said, “without public confidence that flying is safe and secure, there is no future for our industry.”

Drysdale said the total cost for added safety measures for this year has reached $3 billion, adding “governments would recognize that the cost of security is theirs to bear and we need harmonized global security standards.”

“Aviation was not the target of the terrorist attacks of Sept. 11. Nor was the atrocity in Bali, or in Moscow, or in Zamboanga. Terrorism in whatever its form is an attack against the state or society. And security is the responsibility of states,” Drysdale said.

He added, “security must apply equally to people in their homes, on the streets, in parks, riding in buses or flying in airplanes.”

With regards to insurance, Drysdale said in September last year, “all aviation insurers issued a seven-day notice of cancellation of the industry’s third-party war risk liability insurance. This threatened the immediate shut down of the entire aviation industry.”

Insurance premiums will reach $6 billion, six times higher than prior to Sept. 11. Although the airlines were not liable for what happened, the commercial market is currently not willing to provide third party coverage, Drysdale said.

To continue to function, he said, this industry must have affordable, global, non-cancelable and non-discriminatory third-party war risk insurance. IATA has worked with the International Civil Aviation Organization (ICAO), individual government and private insurers to propose a plan for a global non-profit, special purpose, insurance company.

On the other hand, Richard Stirland, AAPA Director General said airline companies are affected by the escalating airport charges, thereby pushing them to consider the privatization of airports as one way of generating cash in their operations.

He said air traffic control authorities provide charges without any justification and relation to the value of their services.

As to the cost of additional security of airlines, Stirland said the governments should shoulder the financial burden, to avoid giving additional charges to passengers, which certainly would hike fares.

He said with the present economic condition, airlines have the ability to cover additional security costs. Airlines in the Asia Pacific are still recovering from the economic slump and the ill effects of the Sept. 11 terrorists attacks.

“It’s impossible to increase fares because the market is so sensitive right now. If airlines would pass additional costs to passengers, they will not be successful in getting significant market share,” Stirland said.

Likewise, Drysdale said, “we need to establish a new partnership between the airports and the airlines. We need to deliver the best quality of service at a reasonable price.”

To allow this capital-intensive industry to reach its full economic potential, the airline industry should liberalize and modernize rules governing international aviation.

Drysdale added the threat of war between the US and Iraq is pushing fuel prices up. Airlines are paying some $40 billion in fuel per year. Every one percent increase in the price of jet fuel costs the airlines some $600 million.