Cost reduction key for airlines recovery

SINGAPORE, May 28 (UPI) -- The International Air Transport Association issued a strong statement Wednesday to Tokyo's Narita Airport and Seoul's Incheon International Airport after the two have refused to lower landing cost for airlines.

IATA argues that along with restoring passenger confidence, cost reduction is a key ingredient for helping airlines to recover.

"Airlines are cutting costs as a matter of survival. It is important that all airports join in this effort, including Incheon and Narita," said Lasantha Subasinghe, IATA's Assistant Director for User Charges.

"Narita continues to charge the worlds' highest fees to land an aircraft. It is time that Narita understood the severe realities that face a competitive air transport industry and seriously pursued cost reduction," he added.

Speaking at a news conference Wednesday, Anthony Concil, IATA's assistant director for corporate communication said Narita had been "very reluctant" to provide any relief for airlines. "They say they cannot reduce their charges because they are suffering. But they are acting like a monopolistic entity. Any business would try to come up with some solution to help their clients," Concil noted.

April figures from the IATA showed an 18.5-percent drop in global passenger traffic, with Asia Pacific carriers experiencing a 44.8-percent drop as a result of the combined impact of severe acute respiratory syndrome and Iraq. By comparison, after the events of Sept. 11, 2001, global travel fell 23.5 percent, but 10-15 percent in Asia Pacific, Concil noted.

These dire statistics are a lucid indication of the depth of the problems that the industry is facing, IATA said.

Many Asian airports have already responded to IATA's call for cost reduction including Singapore, Jakarta, Manila, Hong Kong, Macau, Kuala Lumpur, Taiwan and China. Airport fees usually represent about 10 percent of an airline's operating costs.

IATA, which was meeting with the Pacific Asia Travel Association Tuesday in Singapore, was strongly supportive of the World Health Organization-recommended screening efforts at airports across Asia.

"Screening is effective. The WHO reports that since screening measure were implemented not a single case of inflight transmission of

SARS has been reported. The screening measures are also an important visible symbol of the industry's efforts to keep air travel safe," said Andrew Drysdale, IATA vice-president Asia-Pacific.

"Our mission is now to get the safety message across with using the combined strength of our membership," added Ken Scott, PATA's managing director for communications.

As such, the travel industry has pledged coordinated efforts to restore confidence in travel and in health-safety travel. "We need to unite to hatch a combat, recovery strategy," Scott said.

He added members of both organizations felt it was necessary to reclaim a balanced media perspective on SARS, pointing that media reports did not always reflect the situation on the ground.

The travel industry is now working on a joint campaign, whose size will depend on how much the private and public sector are willing to contribute to it.

IATA has estimated that the combined impact of SARS and Iraq could cost the industry $10 billion.