Governments are being urged by airlines to take a cautious approach when considering airport privatisation amid an “infrastructure crisis”.
Iata members called on governments to prioritise the long-term economic and social benefits delivered by an effective airport ahead of the short-term financial gains provided by a poorly thought-out privatisation.
About 14% of airports globally have some level of privatisation. As they tend to be large hubs, they handle about 40% of global traffic, according to the airline trade body.
Iata director general and chief executive Alexandre de Juniac, speaking at the organisations annual meeting in Sydney, said: “We are in an infrastructure crisis. Cash-strapped governments are looking to the private sector to help develop much needed airport capacity.
“But it is wrong to assume that the private sector has all the answers.
Airlines have not yet experienced an airport privatisation that has fully lived up to its promised benefits over the long term.
“Airports are critical infrastructure. It is important that governments take a long-term view focusing on solutions that will deliver the best economic and social benefits. Selling airport assets for a short-term cash injection to the treasury is a mistake.”
He added: “Iata research shows that private sector airports are more expensive. But we could not see any gains in efficiency or levels of investment.
“This runs counter to the experience of airline privatisation where enhanced competition resulted in lower pricing to consumers.
“So we don’t accept that airport privatisation must lead to higher costs. Airports have significant market power. Effective regulation is critical to avoiding its abuse – particularly when run for profit by private sector interests.”
Meanwhile, Qatar Airways chief executive Akbar Al Baker took over as chairman of the Iata board of governors for a one-year term, succeeding Singapore Airlines’ CEO Goh Choon Phong.
Iata is to hold its annual meeting in the South Korea capital of Seoul from the first time in 2019 with the event set for June 2.4.