Applauding the Malaysian government for its two-year reduction in landing fees at Kuala Lumpur as well as its rejection of a new airport there, International Air Transport Association Director General Giovani Bisignani said such action signal opportunities for Malaysian Aviation.

“The elements for success are in place,” he told the Malaysian International Chamber of Commerce and Industry (MICCI). “Cost efficiency will help air transport play its role as a catalyst for economic activity even amid the enormous economic crisit.”

The outlined three areas for further work including infrastructure, the environment and open skies. Bisignani is visiting Kuala Lumpur in advance of the 65th IATA Annual General Meeting and World Air Transport Summit which will take place in Kuala Lumpur from 7-9 June 2009.

Citing “outdated rules,” he said aviation is the last business segment to be able to take advantage of open markets citing the fact that the industry is “hyper fragmented with 3,200 players.” Bisignani noted that ASEAN missed its December 2008 deadline to open markets between capital cities on a multilateral basis.

“Malaysia must be a strong voice encouraging ASEAN member states to fulfill their obligations under the ASEAN Roadmap for the Integration of the Air Travel Sector (RIATS) and to meet the 2010 milestone,” he said. “ASEAN must aim high. A single market including ownership liberalization by 2015 would be a major leadership step forward.”

Bisignani cited the IATA-led Agenda for Freedom initiative, which has brought together 14 governments and the European Commission in an effort to deliver change to outdated restrictions on ownership and market access that are unique to aviation.

“Malaysia’s bold move to reduce landing fees at Kuala Lumpur International Airport (KLIA) by 50% for two years will keep KLIA competitive,” said Bisignani. “It demonstrates a clear understanding by the government and Malaysia Airports Holdings Berhad that competitive costs drive traffic and fuel economic activity. Other airports and governments should follow Malaysia’s example.” Bisignani also welcomed the decision to focus efforts on building a strong KLIA hub. In February the Malaysian Government abandoned plans for a second (low cost) airport in favor of expanding KLIA.

However, he called for a fairer distribution of costs amongst all airlines as well as equal access to all facilities. “The priority must be on providing efficient infrastructure that delivers low costs for all airlines,” he said. “Cross-subsidization is not acceptable. Common facilities and services, such as landing charges and security, must be borne equally. And access to all facilities must be open to all airlines. Now Malaysia must build these good decisions with a longer-term strategic plan focused on maximizing the economic benefits from its air transport infrastructure investments.”

Hailing the projected drop in the industry’s worldwide carbon footprint by 4.5 percent this year, Bisignani praised the continuous descent approach trials currently underway at KLIA by Malaysia Airlines, Singapore Airlines and AirAsia. “Each landing with a continuous descent approach has the potential to save between 160kg and 480 kg of carbon through reduced fuel burn,” he said, adding that 2.5 percent of this year’s savings will come from reduced capacity while the remaining two percent results from efficiency gains.

“While the industry struggles with technical achievements, many Western governments pile environmentally-branded taxes on travelers,” he said. “By 2012, the UK’s Air Passenger Duty will add GBP85 to the cost of every Malaysian vacation starting in the UK. And ETS proposals in Europe, the US and elsewhere could add billions more in cost. Each dollar added to the cost of travel to bail out bankers puts Malaysian tourism jobs at risk. Malaysia must be a strong voice to fulfill the vision of Kyoto with a globally coordinated ICAO solution.”

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