ATW Editor's Blog

IATA’s other imbalance is the lack of LCCs

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IATA’s board chairman, Akbar al Baker, created a lot of controversy last week when he ended the IATA AGM in Sydney by telling reporters that “only a man” could run an airline (for which he later apologized). This followed a media stir when IATA issued a photograph of its board members, comprising 25 men and just one woman. But gender inequality is not the only imbalance in IATA’s ranks.

While IATA’s airline membership includes almost 290 of the world’s airlines—including most of the major flagships—it’s increasingly obvious at each annual meeting that the voices of leaders of the large low-cost carriers (LCCs) are absent.

Among those airlines that are not IATA members are Allegiant, AirAsia, easyJet, Norwegian, Ryanair, Southwest and Spirit. These carriers are significant because of how they have changed, and continue to change, the global air transport norms. They have forced “regular” airlines to adapt their business models, either by starting their own LCCs or adapting their products and fare offerings. The latest trend by legacy carriers such as American, Delta and United is to segment their main cabins to include a “basic economy” fare stripped of extras such as pre-assigned seats, checked bags or use of the overhead bin. This is directly aimed at persuading the passenger who wants the absolute lowest price to opt for them rather than one of the LCCs.

LCCs are among the most innovative and adaptable of the world’s airlines. They’ve introduced concepts that people not so long ago would never have imagined to be sellable, let alone prevalent, in air travel: bring your own food and water; pay for a blanket or pillow; pay if you need the airline to print your ticket. And LCCs have now moved into long-haul routes, proving there’s a market for cheap-and-basic even on eight-hour or longer flights. LCCs have created new air travel markets, flying people who have never flown before. Interestingly, the influence of the LCCs has been so large that even when you are flying on a “legacy” carrier, your onboard experience is likely to be closer to that of an LCC than to what used to be thought of as full-service.

LCC leaders’ innovative approach to the business could add much to the IATA AGM discussions and presentations on common industry issues such as slot constraints, air traffic system congestion, security, safety and emissions reduction.

Asked during the AGM about the lack of LCC participation, IATA director general Alexandre de Juniac said about 10% of IATA member airlines are LCCs, but conceded that none of the big LCCs were onboard.

Singapore Airlines CEO Goh Choon Phong, who was chairman of the IATA board of governors through the 2018 AGM, noted that the association would like more representatives from across all sectors of the industry and more messaging was needed to encourage broader membership.

A greater proportion of LCCs in IATA’s ranks could stimulate a more lively, modern-day debate on where commercial air transport is going. Like the legacies, most of the LCC CEOs are men, so they wouldn’t do much to address the gender imbalance. But their different way of approaching how to get people where they want to go by air would bring a fresh perspective on the changing expectations and priorities of today’s traveler. And maybe new answers to some of this industry’s perennial challenges.

Why always leave it to al Baker to make the controversial statement?

Editor's note: An earlier version of this blog incorrectly listed WestJet as one of the LCCs that was not an IATA member. WestJet in fact joined IATA in 2017.

 

Karen Walker, karen.walker@informa.com

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