IATA chief downplays importance of overseas funds owning airports

by Hiroko Nakata

The aviation industry does not care who owns airports as long as the facilities are properly and efficiently managed, the head of the International Air Transport Association said Thursday.

IATA Director General Giovanni Bisignani’s comments came amid fierce debate among Japanese lawmakers over whether to cap the stake held by overseas investors in the operators of the country’s airports that are undergoing privatization.

“I don’t care who owns the airport. That is for politicians to decide. An airport is important for what it delivers, not who owns it,” Bisignani said in a speech in Tokyo.

“Providing the right incentives is the most critical part of the privatization process,” he continued. “We have seen too many privatizations fail because governments sold the crown jewels without appropriate guidance to the new owners.”

Bisignani did not specify the kind of guidance governments should provide, but he said it is important for airports to deliver “adequate capacity to ensure that markets are well served.”

He also said airports must have “service levels that meet customer expectations,” which should be provided “at prices that reflect efficiency.” He also said the ongoing privatization of Narita International Airport will provide a good opportunity to improve service and efficiency at the nation’s main international gateway.

Bisignani was speaking at a luncheon meeting in Tokyo at the invitation of the American Chamber of Commerce in Japan, the European Business Council in Japan, and the Australian and New Zealand Chamber of Commerce in Japan.

IATA, an international trade body, represents about 240 airlines worldwide.

The government’s recent attempts to curtail foreign ownership in operators of the country’s major airports, amid concerns over the ownership of facilities deemed vital to the national interests, came under attack from lawmakers who argue such regulation would stifle foreign investment in Japan. Cabinet approval of a planned bill has been postponed for the time being.