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AACO 2011: Wahab Teffaha calls for continued market liberalisation

Abdul Wahab Teffaha, secretary general of the Arab Air Carriers Organisation (AACO), has criticised airlines in Europe and the United States for a perceived return to protectionism during the organisation’s 2011 annual general meeting in Abu Dhabi.

Governments around the world were accused of seeking to “restrain of the growth” of airlines which have extracted new opportunities from the economic crisis.

“Are those leaders actually calling for a return to providing customers with choices based on the flag that the airline carries rather than the value it delivers to them?” Wahab Teffaha asked.

Such ideas were “relics of last century”, he added.

Wahab Teffaha went on to call on the European Union and United States – whom he termed the “flag bearers” for liberalisation - to show free market principles were in the interest everybody, not just the economic interests of their own airlines.

However, Arab airlines are not yet in a position to liberalise, Wahab Teffaha argued, with the “higher national interest” to be considered first.

“It goes without saying the implementation of this agenda needs to take into account the maturity of the markets and airlines in the developing countries of the world,” he added.

“Their timetables for the implementation of the liberalisation principles will respond to macroeconomic and social requirements.”

Government subsidy to, a minority, or Arab carriers was also acceptable, the secretary general stated, as it mirrored the processes by which allowed European and American airlines had flourished in previous decades.

Wahab Teffaha also outlined concerns over the potential impact of environmental policies

Global Concerns

However, Wahab Teffaha was also quick to outline the problems facing the aviation sector – not just in the Middle East – but around the world.

In addition to “the worst economic crisis the world has seen since 1929”, the sector continues to deal with a congested global infrastructure operated by service providers “complacent and content, especially in Europe, imposing whatever charges they want on airlines”, he explained.

Concerns over the potential cost of environmental legislation, volcanic ash and political unrest were also near the top of the agenda.

Success of Arab Carriers

Despite this, aviation has “ultimately remained on its feet” as there are people in the sector who are able to “extract opportunity from crises” in an industry that is “irreplaceable”.

Arab carriers have successfully improved on existing business models from around the world, generating bright prospects from the region, continued Wahab Teffaha.

Modern fleets across the region allow carriers to spend less on fuel, while low human resource costs and a “friendly” tax environment also cuts costs.

Strong infrastructure in the Middle East also meant carriers do not have to “spend 20 minutes on average to take off or land in Arab airports”, as opposed to Europe.