The Arab Air Carriers Organization (AACO) convened its 50th AGM today in Sharjah under the High Patronage of His Highness Sheikh Dr. Sultan bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Sharjah. The AGM was held under the Chairmanship of Mr. Adel A. Ali / Group Chief Executive Officer of Air Arabia.
Participation
The General Assembly was attended bythe CEOs of AACO member airlines, AACO partner airlines and industry partners from aircraft and engine manufacturers, Global Distribution Systems (GDSs), IT providers and other specialized companies relevant to the Arab air transport industry. The AGM also welcomed the European Commission, Naif Arab University for Security Sciences and the International Air Transport Association (IATA), in addition to a number of aviation experts, where the number of delegates surpassed 250.
Arab Air Transport Statistics in 2016
Delegates of the AGM received AACO’s annual report, which recaps AACO's annual achievements and regional and global industry developments. The delegates also received the annual statistical publication of AACO (AATS) covering 2016 data. Major statistics included in AATS were as follows:
- The Arab air transport market grew by 9.9% in 2016 compared to 2015, reaching 284 million passengers.
- Passenger numbers using Arab airports in 2016 increased by 4.9% to reach 340.6 million passengers.
- Cargo handled at Arab airports increased by 5% in 2016 reaching 8.11 million tons of cargo.
- AACO members served 421 destinations in 126 countries with 3,991 average daily flights, offering 847,571 daily seats on 1,334 aircraft in 2016.
- AACO members’ operating revenues increased by 6.4% in 2016 reaching USD 62 billion.
- AACO members carried around 217 million passengers in 2016 (an increase of 11.7% compared to 2015) and 6.5 million tons of cargo (an increase of 2.6% compared to 2015).
Tribute to Mr. James Hogan
The AGM paid a tribute to Mr. James Hogan/ Former President and Chief Executive Officer of Etihad Aviation Group, who held this position as of 2006. During his tenure in Etihad Aviation Group, Mr. Hogan was elected as a member of the Executive Committee in 2010, and Chairman of AACO AGM in 2011 where he contributed in strengthening and supporting AACO’s work.
AACO Secretary General Report
AACO’s Secretary General presented his report on the state of the industry, highlighting the continuous success of Arab airlines although many of the present crises are taking place in the Arab region. The Secretary General noted an element that manifests the strength of the Arab air transport market which is the growth of passengers to population ratio over the years. A number of factors that enhanced the growth and expansion of the Arab air transport were highlighted including the fact that 60% of the Arab population is under the age of 25 years, which is a significant growth factor for Arab airlines. Adding to that, the geographical location of the region which allows Arab airlines to play a pivotal role in inter-continental transport, and the focus on hospitality as a major attraction point in Arab airlines’ product, in addition to the gradual liberalization of the Arab air transport market.
The Secretary General also mentioned, in his report, the role of AACO as one of the tools that Arab airlines use to assist them in their work; over the past period, AACO focused on advocating for the interest of Arab airlines with authorities in the Arab world and globally, as well as working with Arab and international bodies and organizations on a range of issues affecting Arab airlines; such as aviation security and facilitation, aeropolitical affairs, infrastructure, and climate change. AACO also focused on providing a platform through which Arab airlines deal with issues related to rationalization of costs in areas such as fuel, ground handling, distribution, emergency response planning, maintenance, human resources development and other sectors.
On the other hand, the Secretary General shed light on some statistical figures related to the Arab air transport; mentioning that in 2016 Arab airlines’ passenger numbers recorded 96 times the number recorded in 1965 - the year of AACO’s establishment, meanwhile, global passengers number grew twenty times only during the same period; meaning that Arab airlines grew fivefold the growth recorded by airlines globally during the past five decades.
Passenger traffic in the Arab air transport market grew from 3 million passengers in 1965 to around 301 million in 2017. This meant that the ratio of passengers to population grew from just 3.1% in 1965 to 72.3% in 2017. As for the past 10 years, passengers to population ratio increased from 33.1% in 2006 to 69.9% in 2016. Meanwhile, the growth in market share of low-cost airlines reached 22.1% of the total number of passengers to, from and within the Arab world in 2016 compared to 4.6% in 2006.
The Secretary General concluded his report, expressing gratitude to the support of AACO member airlines, partner airlines, and industry partners, noting the great cooperation of the League of Arab States in addition to that of ICAO and IATA. He also thanked the AGM chairman and his team for their outstanding efforts to make this AGM a success; as well as the Chairman and members of the Executive Committee, affirming AACO’s permanent credo: We are proud to serve you…
IATA Speech
Mr. Muhammad Ali Albakri, IATA Regional Vice President for Africa and the Middle East, presented the IATA speech. He highlighted the impact of the aviation industry on the economy in terms of contribution to national output and job creation. The sector supports 2.4 million jobs and contributes USD157 billion in the Middle East economic activity.
Mr. Al-Bakri mentioned a number of challenges facing the air transport sector in the region. Albakri indicated the different effect of low oil price for oil exporting countries compared to importing countries in terms of impact on the countries’ economies in the region. He also highlighted the importance of technology and innovation in supporting the air transport sector growth, since IATA works on several projects in this framework, such as: OneID, OneOrder and NEXTT.
On the other hand, Albakri mentioned a number of issues that need to be addressed by the region’s governments and presented the appropriate methodology to adopt laws and regulations related to the air transport sector, which provide it with opportunities for development and growth. He also called on states that had not ratified the Montreal Protocol 2014 and the Montreal Convention of 1999 yet, to do so as soon as possible because of the benefits these international instruments bring to governments, passengers and airlines.
Speech by Vice President of Naif Arab University for Security Sciences
Prof. Abdulrahman Ibrahim Al-Shaer, Vice President of Naif Arab University for Security Sciences, delivered a speech about cooperation with AACO on Aviation Security.
Two Strategic Resolutions by AACO 50th AGM
The second working session was dedicated to AACO members where they discussed the Executive Committee report which covered strategic issues in addition to AACO’s financial and administrative issues.
Based on the recommendations of the Executive Committee, AACO’s AGM adopted two strategic resolutions as follows:
Resolution on Competition Issues in the Relations with the European Union:
Recognizing that the Arab - EU air transport relations are the foundation for trade and movement between the two neighboring regions;
Advocating for the added value that competition brings to the market place and the positive impact of removing restrictions on air transport manifested in:
- lower prices and better service levels for the consumer;
- Increased activity, productivity, growth and job creation for the economy; and
- focus on providing the best services at the best prices by the airlines;
Reasserting that dialogue, consultations, and negotiations are the proper path in air transport relations between states;
Highlighting that unilateral air transport regulations need to:
- Respect the sovereignty of other states and their legal and economic structures;
- Not to be used as a pressure tool to invoke the interests and requests of one state on another;
- Place the interests of passengers at the top of the priorities;
- Not be used to develop protective measures designed to promote one party's competitive position at the expense of another party; and
- Not become a source of disputes with other countries;
And in that regard, Referring to the European Commission’s proposal for a regulation repealing EU regulation 868/2004 on safeguarding fair competition in air transport;
AACO 50th AGM,
- Calls upon the EU institutions to take the above five principles into consideration in their approach towards the revision of regulation 868/2004, and to look into the observations on the EC proposal that some Arab parties, including AACO, submitted to the European Commission and the EU Parliament; and
- Directs AACO to continue working with the relevant Arab parties in advocating the above principles to the EU institutions and to continue engaging with those EU institutions as needed.
Resolution on Aviation Security and Facilitation:
Noting that ensuring the security of civil aviation remains primarily the responsibility of states;
Acknowledging the role of airlines and airports in the implementation of security measures;
Emphasizing that global security standards and measures are the only means to mitigate security threats effectively and efficiently;
Further emphasizing the need for consultation and collaboration between states and airlines and airports in devising and implementing security measures;
Recognizing ICAO’s leadership role as the organization responsible for developing global standards for international civil aviation, and its efforts in developing the Global Aviation Security Plan (GASeP) and establishing the Middle East Regional Aviation Security and Facilitation Group to develop and implement the Regional Security and Facilitation Plan;
Recognizing the efforts of Arab States in contributing to laying down the principles of a global and regional foundation for aviation security through the Declarations of Riyadh, Dubai, and Sharm El Sheikh;
AACO 50th AGM,
- Urges states to refrain from enacting unilateral security measures which do not mitigate the global threats and rather to address threats globally through ICAO;
- Urges states to collaborate with ICAO, airlines, airports, and concerned stakeholders when developing responsive security measures to new threats, and to support ICAO in developing sustainable global mitigation measures to those threats;
- Urges states to consult with airlines and concerned stakeholders on the responsibilities of each stakeholder in implementing security measures and on the applicability and implementation timelines for those measures to ensure protection of passengers and assets while at the same time minimizing disruption to air transport operations; and
- Directs AACO to continue working with ICAO and in collaboration with states, airlines, and international and regional organizations to support the development and implementation of the Regional Security and Facilitation Plan.
Taxation on Air Transport
The issue of heavy taxation on air transport activities was raised by AACO 50th AGM and the AGM expressed its concern regarding the recent provision in the US Senate tax bill (Tax Cuts and Jobs Act), following the proposed amendment by Senator Johnny Isakson to remove the exclusion of certain foreign carriers from paying US income tax for their operations in the US when the carrier is headquartered in a country that doesn’t have a tax treaty with the U.S., and if major U.S. passenger airliners make fewer than two weekly trips to that foreign country. The AGM also noted the risk of subjecting the air transport industry to such new tax policies especially if we start seeing a proliferation of this tax policy by states around the world that would negatively affect global connectivity, consumer interests, and the economy.
AACO 50th AGM also called upon IATA to actively advocate against the adoption of this tax in the US in line with its long-standing priority of shielding the air transport industry from burdensome taxes.
Joint Aviation Forum
The Third Working Session, as usual, gathered all invitees of AACO AGM and witnessed the “Joint Aviation Forum”, which is a panel discussion that was moderated this year by Mr. Jonathan Sullivan of Seabury Consulting. The Joint Aviation Forum hosted the following participants.
- Mr. Henrik Hololei / Director General for Mobility and Transport/ European Commission
- Mr. Adel A. Ali / Group Chief Executive Officer / Air Arabia
- Mr. Peter Baumgartner / Chief Executive Officer / Etihad Airways
- Mr. Samer Majali / Chief Executive Officer /SaudiGulf Airlines
Closing of the AGM
As the AGM concluded, AACO members thanked the 50th AGM Chairman, Mr. Adel A. Ali, for leading this event and for the generous hospitality of Air Arabia.
Venue of forthcoming AGM
The forthcoming 51st AGM will be convened in Cairo by kind invitation of EgyptAir in 2018.