IATA Notes (International Air Transport Association)

  

THE FOUNDING OF IATA

IATA was founded in Havana, Cuba, in April 1945. It is the prime vehicle for  inter-airline cooperation in promoting safe, reliable, secure and economical  air services - for the benefit of the world's consumers. The international scheduled air transport industry is more than 100 times larger than it was in 1945. Few industries can match the dynamism of that growth, which  would have been much less spectacular without the standards, practices and procedures developed within IATA.      

At its founding, IATA had 57 members from 31 nations, mostly in Europe and North America. Today it has some 265 members from 117 nations in every part of the globe.

The modern IATA is the successor to the International Air Traffic Association founded in The Hague in 1919 - the year of the world’s first international scheduled services.  

EARLY DAYS

The old IATA was able to start small and grow gradually. It was also limited to a European dimension until 1939 when Pan American joined. The post-1945 IATA immediately had to handle worldwide responsibilities with a more systematic organization and a larger infrastructure.

This was reflected in the 1945 Articles of Association and a much more precise definition of IATA's aims than had existed before 1939.

• To promote safe, regular and economical air transport  for the benefit of the peoples of the world, to foster air commerce, and to study the problems connected therewith;
• To provide means for collaboration among the air  transport enterprises engaged directly or indirectly in international  air transport service;
• To cooperate with the newly created International Civil Aviation Organization (ICAO - the specialized United Nations agency for civil aviation) and other international organizations. 

The most important tasks of IATA during its earliest days were technical, because safety and reliability are fundamental to airline operations. These require the highest standards in air navigation, airport infrastructure and flight operations. The IATA airlines provided vital input to the work of ICAO, as that organization drafted its Standards and commended Practices. By 1949, the drafting process was largely complete and reflected in "Annexes" to the Chicago Convention, the treaty which still governs the conduct of international civil aviation.

In those early days, ICAO coordinated regional air navigation and support for airports and operational aids in countries which could not themselves afford such services. IATA provided airline input to ICAO and to sessions of the International Telecommunications Union on wavelength allocation.

The standardization of documentation and procedures for the smooth functioning of the world air transport network also required a sound legal basis. IATA helped to mesh international conventions, developed through ICAO, with US air transport law which had developed in isolation prior to World War Two. The Association made a vital input to the development  of Conditions of Carriage the contract between the customer and the transporting airline. One early item on the legal agenda was revision and modernization of the Warsaw Convention - originally signed in 1929 - on airline liability for passenger injury or death and cargo damage or loss. This work continues.  

Once they were operating within a sound technical and legal framework, airlines' next requirements were for answers to questions such as: who can fly where? What prices are to be charged? How is the money from multi-airline journeys - that is, interlining - to be divided up, and how do airlines settle their accounts?

The Chicago Conference of 1944 which gave birth to the  tried to achieve a multilateral answer to the first two questions, but failed to do so. The questions of who flies, and where, were resolved on a bilateral basis. The benchmark Bermuda Agreement of 1946 between the US and the UK was the first of almost 4,000 bilateral air transport agreements so far signed and registered with ICAO.

In the early days, governments insisted on the right to oversee the prices charged by international airlines but could not, in practical terms, develop those prices for themselves. IATA was delegated to hold Traffic Conferences for this purpose, with all fares and rates subject to final government approval. The aim was twofold: ensuring that fares and rates would not involve cut-throat competition, while ensuring that they could be set as low as possible, in the interests of consumers.

A coherent pattern of fares and rates pattern was established, avoiding inconsistencies between tariffs affecting neighboring countries - and thereby avoiding traffic diversion. The predictability of fares and rates in this pattern also enabled airlines to accept each others' tickets on multi-sector journeys and thus gave birth to interlining. Today, 50 million international air passengers a year pay for their ticket in one place, in one currency, but complete their journey using at least two, and sometimes five or more, airlines from different countries using different currencies.

The first worldwide Traffic Conference was held in Rio de Janeiro in 1947. It reached unanimous agreement on nearly 400 resolutions covering all aspects of air travel.

Fare construction rules for multi-sector trips, revenue allocation - pro-rating - rules, baggage allowances, ticket and air waybill design and agency appointment procedures were  typical details agreed at this pioneering meeting.    

Today, that pioneering work is reflected in the currently applicable IATA Resolutions dealing with these and many other subjects. Notable examples are: 

• The Multilateral Interline Traffic Agreements: These are the basis for the airlines' interline network. Close to 300 airlines have signed them, accepting each others' tickets and air waybills - and thus their passenger and cargo traffic - on a reciprocal basis.
• Passenger and Cargo Services Conference Resolutions: These prescribe a variety of standard formats and technical specifications for tickets and air waybills.
• Passenger and Cargo Agency Agreements & Sales Agency Rules: These govern the relationships between IATA Member airlines and their accredited agents with regard to passenger and cargo. 

Debt Settlement between airlines, largely arising from interlining, takes place through the Clearing House, which began operations in January 1947. During its first year, 17 airlines cleared (US) $26 million.  

GROWTH AND DEVELOPMENT

International air transport grew at double-digit rates from its earliest post-1945 days until the first oil crisis in 1973. Much of the impetus for this growth came from technical innovation. The introduction of turbo-propeller aircraft in the early 1950s, transatlantic jets in 1958, wide-bodied aircraft and high by-pass engines in 1970 and later, advanced avionics were the main innovations. They brought higher speeds, greater size, better unit cost control and, as a result, lower real fares and rates. Combined with increased real incomes and more leisure time, the effect was an explosion in demand for air travel.

Increased demand for air travel led to increased activity for IATA

Technical work evolved into seven broad areas. Avionics and Telecommunications included the vital air navigation function; Engineering and Environment developed IATA policy on aircraft noise and other emissions; Airports defined airline requirements for airport terminals; Flight Operations worked on safety factors such as minimum aircraft separation standards and air routings; Medical  monitored health standards for flight crews and facilitated air travel for disabled passengers; Facilitation attempted to speed the flow of people and goods through airports - particularly, customs and immigration; Security worked on measures to safeguard passengers and cargo by preventing hijacking and sabotage and on minimizing fraud and theft of tickets.

IATA's legal efforts anticipated the effects of new technology associated with the period of rapid growth. It was able to advise the industry on new aircraft and systems, electronic data processing and advances in sales and marketing techniques. Since acts of hijacking and sabotage became more frequent during this period, IATA assisted in the development of the Tokyo, Hague and Montreal Conventions, the first international legal counter-measures.

Automation became commonplace in airline operations during the 1960s. Standardization in its use was less commonplace and IATA began its involvement in perfecting standard message formats for inter-company data exchange, which continues to this day.

The goal has been to save money for the airlines, while enhancing airline service. This philosophy was carried over to many activities during the 1950s and 1960s. Development of the Clearing House was followed by the establishment of Billing and Settlement Plans  and Cargo Accounts Settlement Systems  - in effect, one-way clearing houses to speed the flow of revenue from agents to airlines. Sales Agents were given the opportunity to prove their professional status under an accreditation process, and training - in conjunction with the Universal Federation of Travel Agents' Associations and the Federation of Freight Forwarders' Associations - was introduced. The pattern for airline-agent relations was set with the introduction of the Standard Agency Agreement in 1952. There are now nearly 81,000 IATA agents worldwide and 135,000 students have enrolled for IATA-sponsored agency training courses since they were introduced.

International air transport creates special problems of taxation. This was a concern even before World War Two. IATA makes specific challenges to the legality of certain taxes and points out to governments the counter-productive effect of excessive aviation taxation in general. User Charges - payment for using airports and air navigation services - mushroomed during the 1960s and 70s. IATA's task is to minimize their impact by ensuring that the charges are for facilities actually required, that charges are cost-related and that productivity improvements are built into cost projections. Currency earned by airlines abroad is sometimes blocked by the central bank of the country in which it is earned. IATA works to free it, for transfer back to the airline that earned it.

Unit Load Devices, or ULDs - principally, containers - allow rapid, economical cargo handling. IATA Members developed the technical specifications for containers and created a ULD control centre, to keep track of their movements. Until 1955, there was a complete embargo on the air transport of toxic, flammable or corrosive materials. Then IATA developed Dangerous Goods Regulations for their safe carriage. A decade later, Live Animals Regulations provided for suitable standards for the in-flight welfare of animals.

A TWO TIER IATA

Between the late 1940s and the early 1970s, it could be said that flight was transformed from "a scientific phenomenon to a public utility at the disposal of the entire world." At the same time, the popularization of civil aviation led to growing demands that the "public utility" view of the industry on the part of governments be modified to encompass greater competition and wider access to markets.

These demands were fuelled by competition for leisure travellers provided by charter companies and the challenge of stimulating demand to fill the new wide-bodied aircraft. Potential demand for air travel had extended well beyond the original client base of bureaucrats, businessmen and the well-to-do. New travel products and greatly increased price flexibility were needed. As a result, the old basis for conducting IATA Traffic Conferences needed modification.

At the same time the US Government, which had first given IATA Traffic Conferences immunity from national anti-trust law in 1946, began its own review of air transport regulation which, although domestic in scope, was bound to have international repercussions.

The international dimension of the US review resulted in a "Show Cause Order". Hearings took place in 1979, at which IATA was called upon to show cause why anti-trust immunity should not be removed from its Tariff Coordination activities. The outcome mainly affected North Atlantic passenger fares which, for some years, were subject to special rules under an inter-governmental Memorandum of Understanding (MoU) between the US and ECAC states. The present position is that all Tariff Coordination activities continue to be protected.

Eventually, IATA was re-organized on a two-tier basis in October 1979. The tiers comprised:

• Trade Association (technical, legal, financial, traffic services and most agency matters)
• Tariff Coordination (passenger fares, cargo rates, and related conditions and charges)

At present, some 100 Members, including the world's largest airlines, continue to participate in Tariff Coordination.

FROM A NEW TRADE ASSOCIATION TO A NEW STRATEGIC THRUST 

The IATA that emerged since 1979 has put an increasing share of its resources into trade association activities.

IATA also changed the basis of its funding. Much of the association's funding is now done through the marketing of its products and services to member airlines, other airlines and others in the travel, transport and tourism industry.  As a result airlines can access a broader array of professional services, tapping into IATA's expertise. And IATA has greater flexibility in the way it approaches its tasks, while remaining devoted to its non-for profit operations principles.

In many ways, those tasks remained the same as in 1945, or even in 1919. But IATA gave them new relevance and focus by redefining its mission and goals in 1994:

• Safety & security: to promote safe, reliable and secure air services.
• Industry recognition: to achieve recognition of the importance of air transport worldwide social and economic development.
• Financial viability: to assist the industry to achieve adequate levels of profitability, by optimizing revenues (yield management) while minimizing costs (fuel, charges and taxation).
• Products & services: provide high-quality, value for money, industry required products and services that assist the airlines in meeting the needs of the consumer.
• Standards & procedures: to develop cost-effective, environmentally-friendly, standards to facilitate the operations of international air transport.
• Industry support: to identify and articulate common industry positions and support the resolutions of key industry issues (congestion, infrastructure).

These objectives proved to be relevant and most were carried over to the new millennium, where they still form most of IATA's current mission. 

ENSURING THE VIABILITY OF AIR TRANSPORT

While the 20th century saw the creation and rapid growth of the air transport industry, the beginning of the 21st century was marked by great challenges met with major transformations.

Over the last decade, the industry has been rocked by a series of successive crises and shocks. These include terrorism, pandemic threats, volcanic eruptions, global economic upheavals and an unprecedented rise in the cost price of fuel. Between 2000 and 2010, airlines posted a net loss of $30 billion.

All this has made IATA’s leadership more crucial than ever.  In 2002, Giovanni Bisignani took over leadership of IATA as its Director General and CEO from Pierre Jean Jeanniot. Bisignani initiated a complete restructuring of the association to increase IATA’s relevance and speed in driving major industry changes.

Initiatives spearheaded by IATA include: 

• The IATA Operational Safety Audit (IOSA): IOSA is the global standard for airline safety management and by 2009 airlines were required to achieve IOSA registration as a condition of IATA membership. This is the flagship component of a comprehensive strategy that includes audits, cargo, flight operations, infrastructure, training and data collection
• Environment: IATA led the alignment of the whole aviation industry—airlines, airports, manufacturers and air navigation service providers—in a long term strategy to achieve carbon-neutral growth by 2020 and to cut aviation’s carbon emissions by half by 2050
• Simplifying the Business (StB): In 2004 IATA launched this initiative to use technology to improve customer convenience and reduce costs. In 2008, 100% e-ticketing was achieved, marking a major milestone for the industry. Other industry savings initiatives range from bar-coded boarding passes (BCBP) to Fast Travel, Baggage Improvement Program (BIP) and e frieght, e-services
• Savings: IATA embarked on a major initiative to reduce costs across the air transport value chain, particularly with monopoly suppliers. By 2010 this ongoing campaign has claimed industry savings exceeding $17 billion
• Financial: IATA operates industry financial systems which now settle in excess of $300 billion a year with a success rate of over 99.99%. Unit costs for this system have been decreased by over 80% since 2000

IATA also strengthened its position as the voice of the industry, with firm advocacy and lobbying to focus governments on the long term issues for viability of aviation, such as liberalization, environment and taxation.

CREATING PARTNERSHIPS

On 1 July 2011,Tony Tylor succeeded Giovanni Bisignani as IATA’s Director General and CEO. Tyler immediately focused on creating partnerships across the industry that would help aviation on its path to a profitable, sustainable future.

He extended this invitation for collaboration to governments, calling for better regulation, improved infrastructure and a healthier tax regime that would allow air travel to realize its potential to benefit the economy at the local and global level.

In his first AGM as IATA Director General in 2012, Tyler announcedNew Distribution Capability (NDC). NDC addresses airline requirements for greater product differentiation than is currently available through global distribution systems. As the NDC standard wins approval from authorities, airlines are beginning to revolutionize their relationships with customers, finally offering the personalized service that is taken for granted in many other industries.

IATA has also been active in other critical areas. Members overwhelmingly endorsed a resolution on the

“Implementation of the Aviation Carbon-Neutral Growth (CNG2020) Strategy”

(pdf) at the 69th IATA AGM in 2013. Later that year, States agreed on developing a global market-based measure at the 38th ICAO Assembly. The move complements progress on improving technology, operations and infrastructure in the industry’s long-established four-pillar strategy to manage aviation’s climate change impact. The implementation of a global MBM will be an essential enabler for the industry to achieve CNG2020.

At the same AGM, IATA members unanimously endorsed a set of core principles on consumer protection regulation, following a proliferation of uncoordinated and extra-territorial passenger rights regimes. The core principles called on governments to develop consumer protection regulations that are clear, unambiguous, aligned with international conventions, without extra-territorial implications, and comparable to regimes in place for other modes of transport.

As well as ensuring the correct regulatory protection, IATA continued to focus on the passenger experience. Improvements such as boarding passes on smartphones and the self-tagging of luggage have become commonplace thanks to theFast Travel project. Choice now typifies a journey, from booking to destination.

Meanwhile, safety, always the industry’s top priority, was thrust into the spotlight in 2014 with the loss of two Malaysia Airlines aircraft. The industry responded promptly with specially-configured Task Forces. These quickly provided recommendations on aircraft tracking and information sharing about conflict zones.

Indeed, the sharing of data, not only across all aspects of safety but also throughout the value chain, promises greater harmonization in the future.

In 2014, the aviation industry celebrated 100 year of commercial flight .From a single passenger flying across Tampa Bay, the industry carries more than 3 billion passengers annually a century later.

2015 marked the association's 70th anniversary of serving airlines and passengers, ensuring the industry remains safe and sustainable.

Two projects started under Tony Tyler’s leadership — New Distribution Capability and Smart Secuirity  — typify the value of collaboration. The first brings airlines together with travel agents, technology providers, and global distribution systems while the latter is a joint initiative with Airports Council International that also involves governments and other regulatory authorities.

THE BUSINESS OF FREEDOM

At the end of August 2016, Tony Tyler retired. His tenure was characterized by his “force for good” messaging, derived from his first-hand observation of the benefits of aviation in Asia-Pacific during his time working for Cathay Pacific.

Aside from its significant contribution to global GDP and employment, Tyler tirelessly championed aviation’s environmental work. This culminated in an historic agreement at the 39th ICAO Assembly in 2016 for a global market -based measure to manage aviation’s carbon footprint.

Much of Tyler’s work ultimately focused on the passenger. It is a theme that has been taken up by his successor,Alexandre de Juniac, who became IATA’s seventh Director General and CEO on 1 September, 2016.

The business of freedom has already become an important focus for de Juniac’s work. Allied to messaging that calls for the speed of innovation in the industry to improve, airlines look set to continue creating value for their end customer.

VISION AND MISSION

Our vision

To be the force for value creation and innovation driving a safe, secure and profitable air transport industry that sustainably connects and enriches our world.

Our mission

IATA’s mission is to represent, lead, and serve the airline industry. 

Representing the airline industry

We improve understanding of the air transport industry among decision makers and increase awareness of the benefits that aviation brings to national and global economies. Advocating for the interests of airlines across the globe, we challenge unreasonable rules and charges, hold regulators and governments to account, and strive for sensible regulation.

Leading the airline industry

For nearly 70 years, we have developed global commercial standards upon which the air transport industry is built. Our aim is to assist airlines by simplifying processes and increasing passenger convenience while reducing costs and improving efficiency.

Serving the airline industry

We help airlines to operate safely, securely, efficiently, and economically under clearly defined rules. Professional support is provided to all industry stakeholders with a wide range of products and expert services.

Our values & behaviors

Our values and behaviors define what we value and how we behave to help us deliver the IATA mission and vision. We all have different personalities, styles and areas of expertise, are at different levels of the organization, and play different roles.

But you will recognize us by the consistent way in which we act and behave. We live our values and embody the supporting behaviors to make IATA a great place to work:

• We act with integrity and uphold our standards
• We think strategically in support of the global big picture
• We partner and manage to create high performing teams
• We put people first, by acting with a simple human touch 

IATA MEMBERSHIP

Today IATA represents some 260 Member airlines in over 119 countries. In an industry that safely flies over 2 billion passengers a year, IATA’s Members carry 84% of the world’s scheduled international air traffic.

IATA MEMBERSHIP BENEFITS

 

Members benefit in several ways. Most importantly, IATA provides a powerful, unified and experienced voice that supports and promotes the interests of its members through:

 

•  International recognition and lobbying
• Providing advocacy on a global, regional and local basis
• Targeting key industry priorities
•  Driving industry change
• Reducing costs
•  Communication campaigns  

1.     International recognition

• IATA maintains an international perspective and provides a unique global voice on behalf of its members
• With over 60 offices worldwide, IATA maintains relationships with governments and other industry stakeholders around the world, advocating on behalf of its members on key industry issues

2. Providing advocacy on a global, regional and local basis

•           As an association representing the worldwide air transport industry, IATA maintains an international perspective and provides a unique global voice on behalf of its members, advocating for the economic and social ‘value’ that air transport can deliver and for the removal of obstacles that stand in the way of that value being realized.

•           With over 60 offices worldwide, IATA maintains relationships with governments and other industry stakeholders around the world and is able to access key decision makers to advocate on behalf of its members. Through this global coverage, IATA also monitors emerging issues and regulatory trends, highlighting these to members via its Industry Affairs Committee.

•           Members are able to shape IATA policy on a range of aero-political issues from unruly passengers to passenger rights, thereby influencing industry positions and benefitting from IATA advocacy resources, including its international brand.

3. Targeting key industry priorities

•           Safety remains the industry’s top priority and IATA

assists its members in continuing to meet industry standards. IATA’s safety strategy is a comprehensive approach to identify organizational, operational and emerging safety issues focusing on improved technology, regulatory harmonization, training and awareness. The IATA Operational Safety Audit ( IOSA), which is mandatory for IATA membership, is a critical component of IATA’s safety program. The total accident rate for IOSA carriers between 2011 and 2015 was 3.3 times lower than the rate for non IOSA carriers. IOSA is being enhanced to widen its scope and will be known as E-IOSA. IATA Members are not required to pay the administration fees associated with the IOSA audits.

•           IATA is actively working with ICAO to move towards the adoption of a performance based standard for global tracking of commercial aircraft as well as working to globally harmonize security measures and improve security processes.

•           IATA is leading the charge on reducing the environmental impact of aviation and has developed a set of industry-wide targets to achieve our goals of sustainability through a four pillar strategy to (i) invest in new technology (ii) build and use efficient infrastructure (iii) fly using more efficient operations and (iv) use effective global market based measures (MBM). IATA is working closely with ICAO and member states to ensure there is a global MBM ready for 2020 to ensure carbon-neutral growth becomes a reality

4. Driving industry change

• Members have the opportunity to help drive the industry’s priorities on key initiatives such as Simplifying the

Business (StB), New Distribution Capability (NDC) and Smart Security.

-   StB aims to use technology to improve customer convenience while reducing costs and improving efficiency.

-  NDC   is a new standard that will enable the travel industry to transform the way products are retailed to corporations, leisure and business travelers.

•         The smart security  project is working to modernize security and provide an uninterrupted journey from curb to aircraft door, where passengers proceed through the security checkpoint with minimal inconvenience.

-   

5.Protecting airline money and reducing costs

• IATA’s financial settlement systems  (ISS) are the backbone of the global air transport industry, helping contain costs, reduce cash flow and maximize efficiency. Participation in ISS

is offered to IATA members at either no cost or substantially reduced rates. A more detailed analysis comparing the costs for members vs. non-members is available below.

• IATA is also working tirelessly to help members achieve substantial cost reductions in the areas of ATC charges, fuel and taxation.

6.Increasing Communication

• IATA’s members are able to participate in a number of member conferences which offers unprecedented access to a variety of airline and industry partners. For example, the IATA Annual General Meeting ( AGM) and World Air Transport Summit held in June, which brings together approximately 800 senior representatives from across the air transport value chain, including on average 120 airline CEO’s.

• Members may also participate in a wide range of committees and working groups supporting a variety of industry issues. Only IATA members may be nominated to participate in the

six  IATA standing committees representing Cargo, Financial, Environment, Industry Affairs, Legal and Operations and IATA membership is also a requirement for participation in many of the individual  Working Groups.

• IATA helps members gain influence with the travel agent community through the  IATA Agency Program.

7. Providing key commercial services and training

• IATA offers a comprehensive suite of information products covering a variety of subjects and IATA members can receive discounts of up to 30% on a number of  IATA publications.

• IATA’s various programs,  products and services help to strengthen the capabilities of aviation industry professionals. Discounts are available to IATA members in many cases.

• IATA provides  training to thousands of aviation professionals each year and its understanding of best practice, international standards and industry regulations ensures its training course address real workplace challenges. Courses are available to airline members at discounted rates in major fields such as passenger, cargo and safety.