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REMARKS
FOR
THE
HONORABLE NORMAN Y. MINETA
SECRETARY
OF TRANSPORTATION
INTERNATIONAL
AIR TRANSPORT ASSOCIATION
WASHINGTON,
D.C.
JUNE
2, 2003
Good
morning. Thank you Leo Mullin for
the kind words of introduction. Director
General Bisignani, it is a pleasure to join you, the Board of Governors and the
members and guests of IATA for your 59th Annual General Meeting.
On
behalf of President Bush and Vice President Cheney, I welcome you to Washington
D.C. I thank IATA for choosing the
United States as the host Nation and for choosing Washington DC as the host city
in honor of the Centennial of Flight.
One
hundred years ago –- the Wright Brothers, one of our first pioneers in air
transportation – set the world on
a course that both electrified our imaginations and revolutionized aeronautical
theory – and we’ve never looked back.
Today,
thanks in large part to the Wright Brothers and others, we live in a global
economy that moves with lightning speed 24 hours a day – seven days a week.
Air travel is critical to making that happen.
The
World Bank estimates that the World Gross Domestic Product (GDP) in 2001 was
more than $31 trillion U.S. dollars. Of
that, nearly $1.4 trillion or 5 percent of that World GDP can be attributed to
aviation’s impact on the economy.
But
we live in a new world. The airline
industry is facing some of its most challenging times ever – a slowed global
economy, the aftermath of 9/11 and the Iraq war, the threat of terrorism, and
severe acute respiratory syndrome – SARS.
Together,
these concerns have taken a collective toll on our economies – and the
airlines that serve them.
Two
weeks ago, IATA reported that, due to the Iraq war and the SARS outbreak, world
passenger traffic in April dropped by more than 18 percent over last year.
But
let me say this: I am confident that aviation, the most vibrant and resilient
part of the global economy industry, will
turn the corner. And no one has
been more critical to ensuring the continued vibrancy and resilience of this
industry than the men and women of IATA.
IATA
has worked hard to foster international cooperation between airlines and between
their governments.
With
the outbreak of SARS, IATA closely worked with the World Health Organization to
implement international airline guidelines and recommendations to address safe
passenger travel.
IATA
also serves as a leader in global safety, working closely with the U.S.
Department of Transportation on behalf of safer skies.
A great example of IATA’s leadership is its work in promoting and
enhancing the Safe Skies for Africa initiative.
Safe
Skies for Africa is helping us to support Africa’s integration into the global
economy by promoting sustainable improvements in aviation safety and security,
and I thank IATA for its valuable work.
This
vital initiative has already facilitated preliminary surveys of safety, security
and air navigation systems in eight of the nine Safe Skies countries.
Technical assistance is being provided to prepare countries to meet ICAO
safety standards and an International Aviation Safety Assessment – an FAA
safety evaluation process of government oversight of aviation safety.
Training
and facility needs assessments are being conducted to identify specific training
needs and to support the eventual establishment of regional training centers of
excellence. We’ve also created a virtual
aviation-training symposium at – www.ssfa.net.
The website is used to share, exchange, and post information related to African
aviation training needs.
During
the past decade, this industry has made great strides in discarding its past
reliance on government-imposed regulations in favor of greater market
responsiveness and more open skies agreements.
History will remember this transformation.
And
to ensure even greater levels of global trade and further expansion of the
world’s economy, this transformation must continue.
In
recent years, many of the world’s long standing and restrictive bilateral
agreements have been replaced by more liberal open skies agreements.
This liberalization has been successful because it produces public
benefits that are simply not possible under restrictive regulations.
Liberalization
provides airlines with the opportunities and incentives to become more
efficient. It provides airlines
with new business opportunities while strengthen existing operations. This freedom to grow and compete should be at the heart of
every aviation agreement worldwide.
While
bilateralism opened markets in the 20th century, the 21st
century requires a new model. In
order to further expand aviation markets, we need a broader, multilateral or
regional framework that replaces the current patchwork of aviation agreements.
I encourage you to join us in crafting a vision for what is possible in
global air transportation.
The
European Union (EU) provides one model for establishing an internal market for
aviation services in a specific region. The
EU, as part of its broad, single market reforms, has transformed the once
separate bilateral aviation markets of its members into a single, liberal
aviation market that is open to all airlines from EU member states.
The
European Commission is now seeking a mandate from EU member countries to
represent them in aviation negotiations with the United States.
We look forward to those discussions once the Commission receives a
comprehensive negotiating mandate.
The
Asia Pacific Economic Cooperation (APEC) forum provides another model for
establishing a collective approach to international air service.
A
multilateral aviation agreement involving the U.S. and six other nations,
including one non-APEC economy, currently provides the parties’ airlines with
the opportunity to operate freely between and among each other’s territories.
The
effect has been to create one large open aviation market between the U.S. and
each of the parties, as well as between the other countries.
This
APEC multilateral agreement also provides new opportunities for investing in
airlines of the parties by eliminating many of the traditional restrictions
based in bilateral agreements.
Significantly,
the agreement is open to accession by both APEC and non-APEC economies, creating
a streamlined mechanism for expanding commercial aviation opportunities beyond a
bilateral or even regional context.
The
U.S. Department of Transportation recently submitted to the Congress a request
for consideration of a proposal to grant U.S. airlines greater access to foreign
capital markets. The request raises
the permissible level of foreign ownership of voting stock in U.S. airlines to
49 percent, provided that effective control remains in U.S. hands.
This change would make U.S. law broadly consistent with the EU rules
governing ownership and control of EU member-state airlines.
It
is my sincere hope that Congress will include this provision in the aviation
reauthorization legislation that it is currently working on.
I
know that liberalizing national ownership rules is something that Director
General Bisignani and IATA have endorsed.
This
topic was perhaps the most prominent individual issue discussed during ICAO’s
Fifth World Air Transport Conference in March.
There was overwhelming support at the Conference for liberalizing airline
designation criteria provided that there are clear lines of responsibility for
safety and security oversight.
Investment
restrictions are a sensitive subject, but given the vital contribution that air
service makes to our economies and to our daily lives, we must begin looking at
ways for airlines to have increased access to the pool of global capital.
It
is important that airlines have the ability to attract the capital investment
necessary to ensure their continued ability to promote trade and economic
growth, and to give our citizens access to new services.
Finally,
let me talk about the importance of infrastructure and capacity.
There is a significant danger, that as a result of the unprecedented
severity of the downturn we are experiencing in the air transport sector, we may
lose focus on the importance of expanding capacity – both at our airports and
in our air space. That would be a
very serious mistake.
If
we fail to continue to grow system capacity, it is absolutely certain that we
will find ourselves unprepared to accommodate the demand for air travel when the
global economy rebounds.
In
the U.S., we still remember vividly the congestion and delay that characterized
air travel in our country during the summer of 2000.
We owe it both to our citizens and our airlines to ensure that we never
again subject them to that level of inconvenience and expense.
Is
it for that reason that the Bush Administration has submitted legislation to the
U.S. Congress that, if enacted, will ensure funding to support continued
expansion of our airport and airspace infrastructure over the next four years.
In
addition I have asked the Federal Aviation Administration to develop a new
initiative for modernizing the way we manage our air space.
The FAA has worked effectively to grow the capacity of our air traffic
control system over the past few years, notably through our Operational
Evolution Program.
But
the successes realized through the OEP – as essential as they are to keeping
up with demand over the course of the next decade – will not be sufficient to
accommodate the air transportation market 15 or 20 years from now.
We need something more.
In
response to that challenge, the FAA has established a team that is working with
my office, DOT, and other agencies in creating a roadmap to the future.
Of
course, we know we can’t pursue this objective on our own.
Improvements in air traffic management must be embraced on a global basis
or the system will become hopelessly fragmented.
For that reason, we look forward to cooperating with our friends in other
regions of the world as we march toward a more robust system --a system capable
of accommodating whatever the market may require in the future.
Thank
you very much for the invitation to join you this morning.
I wish you a very successful 59th Annual Meeting as you
discuss and debate the critical issues facing the aviation industry.
I look forward to working together toward even more international
aviation successes.
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