International Air Transport Association (IATA)
In the business of travel, the International Air Transport Association (IATA), the world organization of scheduled airlines have played a key role since its inception in the year 1945. A world association of about 200 Active Members and 35 Associate Members, the International Air Transport Association was a result of the rapid expansion in the network of international airlines in the years following the Second World War.
A need for the worldwide regulation of air traffic including co–coordinating international airfares and rates was felt and consequently an international convention was called by President Franklin D.Roosevelt of the United States of America at Chicago from November 1 to December 7, 1944.
Table of Content
- 1 International Air Transport Association (IATA)
The Convention constituted two permanent bodies, namely,the international Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO). However, before reaching the position that it now occupies in the field of aviation, IATA passed through several stages, in parallel with a spectacular development of commercial aviation.
Its modest beginnings date back to 1919 when the International Air Traffic Association was founded in Hague by half a dozen European airlines that had just been created right from the beginning; they recognized the need to cooperate in setting up a network for rationalizing airlines business.
The International Air Traffic Association expanded steadily with the development of air services in the world. Among other things, it drew up the general formula for tickets and transport documents adopted in 1927. The innovations and improvements introduced by the Association progressively placed unique tools at the disposal of the industry.
In November 1944, as the World War was coming to an end, 54 states met in Chicago to lay the first foundation of the new system that would soon be needed by civil aviation. The Conference led to the creation of the International Civil Aviation Organization (ICAO), the international body set up by government to establish universal norms for the technical regulation of civil aviation.
Indirectly, this Conference was also responsible for the foundation of the International Air Transport Association–a non–governmental body officially set up in Havana in April 1945– which in practice, carried on the task assumed by the former IATA.
- To promote safe, regular and economical air transport for the benefit of the people 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 International Civil Aviation Organization and other international organizations
The IATA is a voluntary, non–political and democratic organization. Membership is automatically open to any operating company, which has been licensed to provide scheduled air service by a government eligible for membershipin ICAO. Airlines engaged directly in international operations are active members, while domestic airlines are associate members.
IATA’s work begins only after governments have promulgated a formal exchange of traffic and other rights (bilateral air transport agreements) and have licensed the airlines selected to perform the service. From that point on, the activity of IATA spreads through virtually every phase of air transport operations.
The basic source of authority in IATA is the annual general meeting in which all active members have an equal vote. A year–round policy direction is provided by an elected executive committee and its creative work is largely carried out by its financial, legal and technical and traffic advisory committees.
Negotiations of fares and rates agreements is entrusted to the IATA Traffic Conferences with separate conferences considering passenger and cargo matters, all establishing agreements valid for periods of two years. Members of IATA committees are nominated by individual airlines and, subject to the regulation and review of the executive committee, serve as experts on behalf of the entire industry.
In the Traffic Conference, however, delegates act as representatives of their individual companies. While the executive committee fixes the terms of reference of these conferences, their decisions are subject only to the reviews of governments and cannot be altered by any other part of IATA. The IATA administration is headed by a Director General and five Assistant Directors General.
The Association has two main offices, one in Montreal and the other in Geneva. Regional Technical Directors are based in Bangkok, Geneva, London, Nairobi and Rio de Janeiro and Regional Directors (Special Assignments) in Singapore and Buenos Aires. IATA Traffic Service Offices are located in New York and Singapore.
IATA’s budget is financed from the dues paid by its members, largely in proportion on to the part of the total international air traffic carried by each airline. Some IATA activities are self–supporting through charges for services rendered.
A wide range of services provided by IATA includes the following :
- The global planning of international timetables
- The standardization of the inter–company communications and reservation system
- The international coordination of telecommunication networks and computer systems
- The single formula for tickets and airway bills The training of travel and freight agents
- The regulation of legal question of general concern, to develop security measures
- The examination and solving of the problems raised by tourism, the flow of passengers and goods at the airports and to establish procedures and technical norms
IATA’s major purpose is to ensure that all airline traffic anywhere in the world moves with the greatest possible speed : safely, conveniently and efficiently and with the utmost economy.For the airlines, IATA provides machinery for finding joint solutions to problems beyond the resources of any single company.
It has become the means by which they knit their individual routes and traffic handling. Practices into a worldwide public service system, despite differences between languages, currencies, laws and measurements. It is a pool of experience and information and the administrator of many common services and enterprises.
For governments, IATA furnishes the medium for negotiation of international rates and fares agreements. It provides the most practical way of drawing upon the experience and expertise of the airlines. It helps to carry out the fast and economical transport of international airmail and to make certain that the need of commerce and the safety and convenience of the public are served at all times.
For the public, IATA ensures high standards of efficient operation, proper business practice by airlines and their agents and the lowest possible fares and rates consistent with sound economy. Through the IATA, by one telephone call and payment in a single currency individual passengers can arrange journeys including many countries and the services of several scheduled carriers.
IATA member airlines are registered in some 100 nations. Their routes cross almost every country of the world at one time or another. It is the IATA’s operational task to ensure that the aircraft utilized to carry the world’s passengers and goods are able to proceed with maximum safety and efficiency, under clearly defined and universally understood regulations.
It is IATA’s commercial objective to ensure that people, cargo and mail can move anywhere in the global network as easily as though they were on a single airline within a single country. Plainly thesetwo categories of IATA activities are closely related in their connection with the cost of airline operation, the carrier’s charges to the public and the desire to keep both of these as low as possible and in keeping with safety norms.
There is a constant and progressive effort to simplify and standardize devices, procedures and documentation within the airlines themselves, among governments and manufacturers and in collaboration with other international organizations.
Trade Association Activities IATA Finances
The IATA Financial Committee deals with all aspects of accounting and settlements between airlines in respect of the business they do with one another or on one another’s behalf It is also concerned with many of the airlines’ common problems in regard to currency and exchange, taxation, charges, insurance and statistics.
Over the years, IATA has been able to reconcile the financial and accounting systems developed independently in many parts of the world before airlines were extensively linked by intercontinental routes. To do so, it has developed and is continuously working to improve standard manuals of revenue– accounting practices, forms for cost reporting and for operating profit and loss and surplus statements and similar documents and has made possible the application of electronic data–processing techniques in accounting and other fields.
An example of IATA’s financial work is the IATA Clearing House, through which the airlines settle monthly accounts for interline revenue transactions. It enables them to collect and pay their worldwide debts simultaneously by single cash settlement in either dollar or convertible sterling, regardless of the number of national currencies involved.
By offering accounts, the Clearing I–louse eliminates the necessity for cash payment of all but a small amount of the total value of monthly claims. It assures regular and timely settlements of interline debts, eliminates much correspondence and other paperwork, saves substantial foreign exchange expenses and, moreover, affords protection in the event of currency devaluations.
Virtually all airlines are members of the Clearing House. Its facilities are also used for international clearance by the Airlines Clearing House, Inc., of the USA.
The Legal Committee
The Legal Committee of IATA, composed of experts drawn from more than 20 airlines, is concerned with all legal matters having a bearing on international air transport. One of its main activities is the formulation of the airlines’ views in the development of international conventions affecting such matters as the liability of air carriers to their customers and to other parties, the commission of offence on board aircraft, the carriage of nuclear materials and the carriage of airmail.
Another important side of the committee’s work is the legal aspects of traffic documents. Since the sale of a passenger ticket or the issue of a cargo waybill creates a contract between the airline and its customer, international airline documents must be effectual under many different systems of law.
The Legal Committee has prepared the legal foundation for the present system of uniform traffic documents that can be used throughout the worldwide network operated by IATA members. The relationship between airlines and travel agents, by whom such documents are frequently issued, is also within the scope of the Committee’s work New legal problems are arising with the introduction of computer ticketing, automatic baggage handling and the use of container for the carriage of cargo
Cooperation of the airlines in operational and technical matters is channelled through the IATA Technical Committee, its annual technical conference and its various global and regional working groups. IATA technical activity is founded upon full exchange of information and experience among all the airlines.
Out of the data, the airlines extract common requirements and observations, which guide the standardization and unification of their own activities, determine their practical advice and assistance to governments and act as guide to future development in transport aeronautics.
Policies approved are recorded in the technical manual. IATA has played and continues to play, an important role in the drafting of the ICAO Standards and Recommended Practices, which form the accepted international pattern for the technical regulation of civil aviation, and cooperates closely with ICAO to encourage governments to implement them fully and keep them up–to–date.
IATA works in much the same way with other organizations such as the International Telecommunications Union, the World Meteorological Organization and the International Organization for Standardization. In addition, IATA provides means for member airlines to enter into consultation with ICAO, with individual states or with the countries comprising a particular region on the planning and implementation of air navigation facilities and services.
This work is generally carried out, under the control of the Technical Committee, by global and regional working groups, which deal with new and developing problems in all technical fields of air transport operations. The annual technical conference provides an international forum in which the airlines and related branches of transport aeronautics can discuss technical development on a broader basis.
Whereas normal IATA technical work is concerned with the problems of integrating into airline use a particular new procedure on a device already available, the conference attempts to fix the relationship between devices, to work out the general requirements of the airlines for new equipment, devices and systems and to set up development priorities which will help airlines, governments and manufacturers, to attain their goals and maximum efficiency and economy.
There are also numerous sub–committees, which meet throughout the year. One is the Medical Advisory Committee, which deals with the physiological and psychological facts, which might affect the safety and well–being of aircrew and passengers. Its emphasis on preventive medicine has resulted in safe air travel for infants, elderly persons and the seriously ill, despite the speeds and altitudes of modern aircraft operations.
Traffic Conferences and Activities
The most difficult role IATA has to operate in is the field of traffic–a term that consists of the commercial activities of the airlines. As an airline association, IATA is particularly concerned with facilitating interline arrangements, the standardization of forms, procedures, handling agreements and the like which allow quick and easy exchange of traffic between airlines.
In addition to this IATA is also a quasi–public agency to which many governments have delegated the responsibility for negotiating international agreements on international rates and fares subject to their approval. Various countries have come to terms with the fact that the huge and intricate job of negotiating detailed agreements to meet the constantly changing conditions of world air commerce should be delegated in the first instance to the IATA Conference and that these agreements should become effective only after interested governments review and approve them.
To ensure unifying its member airlines into a single commercial network, IATA has produced a series of interline agreements between them (to which many non–IATA and domestic airlines and sea carriers are parties as well), covering all phases of passenger, baggage and cargo handling, reservation codes and related matters.
In almost all these areas, IATA works towards adapt the forms and procedure to processing by computer and teletype. For the public, IATA has formulated a single formula for a ticket or airway bill on international air transport that is from anywhere in spite of the geographical barriers, national boundaries, linguistic, monetary, legal, economic and other differences.
Through IATA agreements, the airlines have adopt standard codes of relations with their passenger and cargo agents and consolidators, which assure the agents of fair, uniform and non–discriminatory treatment. Committees screen and special boards all agencies and scrutinize their qualifications to serve the public and the airlines.
Such arrangements are usually carried out under the leadership of the Traffic Advisory Committee, expert working groups and Assistant Director General (Traffic) and his staff. This is usually under the guidance of other standing committees. Actual application, however, comes about mainly through formal resolutions that are subject to the approval of governments.
Virtually every IATA traffic action is the result of this unusually comprehensive and successful process of international agreement reached through the IATA Traffic Conferences, where decisions must be taken by unanimous vote. The Traffic Conference process comes up from the uncharacteristic nature of air transport.
Every inch of the world’s surface is accessible by air and the airlines fly between most of their major cities over a maze of interrelated routes. Nevertheless, every government reserves complete control over its own share of the airspace and the right for determining what the air services levy on the public.
International fares and rates and conditions which underline them must therefore be fixed by international agreements in which virtually every country has some direct or indirect concern. For administration purposes, there are three Traffic Conference areas :
- for the Western Hemisphere, Greenland and the Hawaiian Islands,
- for Europe, Africa and the Middle East, including Iran and
- for Asia, Australia and the South Pacific.
Conference business is organised within the framework of these areas, or on an inter–conference basis, but practically, the interrelation of fares and rates throughout the world makes it necessary that all of these conference sessions are held at the same time and place. Usually, worldwide composite conference meetings are held every two years–in the autumn–to review rates and fares for passengers operations and in spring to think about matters that involve air cargo.
Special meetings are called in the interval and action is taken immediately by mail vote, subject to the same rules of unanimity and government approval. The sessions of the conferences are prefaced by months of careful preparation and study, not only by continuing traffic working groups, but also by research and cost committees, which forecast the result of operation to which fares and rates are related.
Preparatory work of this nature is under the direction of a Commissioner, Commercial Planning and Coordination. The workload of the conferences has been spread since the establishment of the permanent traffic conferences committees, which deal with traffic, handling procedures and agency matters except for fares, rates and commissions.
These committees namely the Cargo Agency, Passenger Agency, Cargo Traffic Reservations and Passenger Traffic –also function based on unanimous vote. Decisions of the Traffic Conferences and their permanent committees are subject to review and approval by interested governments before becoming effective.
The conferences may accept the advice of other parts of IATA, but within their terms of reference they are responsible only to governments and thus to the public, for what they do. Enforcement of IATA resolutions is the duty of a Compliance Office, which, under the Director General, strives to ensure that members respect the obligations, which they have voluntarily assumed.
The flexible nature of the IATA traffic machinery is quite evident over the difficult years of expansion (from 1946). Not only have rates and fares been compatible on the “blue ribbon” North Atlantic routes, but they have also been effective on other major world trunk routes and on the regional feeder services in less developed areas.
The trend of rates and fares has been downward and it is significant that the governments concerned have ever disapproved less than five per cent of the conference resolutions even in part. This is a substantial proof of JATNs minute concentration to the public interest. Over the years, other services have been added to the traffic organization.
Among these is the Traffic Publications Office, which prepares prints and distributes IATA manuals of conference resolutions and recommended practices, directories and handbooks, which are the tools of the international industry.
Tariff Coordination Activities
The negotiation of international fares and rates for submission to various governments arises from the special nature of air transport. Airlines have their operations between major cities, which often have criss–crossing routes. For an airline, any country is accessible by air.
Today governments in most countries of the world reserve control over their own airspace as also over what air carriers may charge the public for using their services. The subject of international rates and fares and the circumstances that emphasize them are the subjects wherein almost every country has some direct or indirect matter.
Tariff coordination framework of IATA is formed with the aim of providing sufficient flexibility Provision has been made for IATA members to introduce innovative passenger fares or cargo rates to respond quickly to market changes without necessarily affecting other tariff in their area of operation.
Participation in such activity by IATA member airline is, however, optional. Airline representatives attend tariff coordination meetings as independent agents on behalf of their companies. Certain level of compromise in this case is advantageous; nevertheless, in the final analysis, governments may need resolving major disputes that are related to cargo rates and passenger fares.
Tariff coordination meetings are held worldwide as and when the members consider these necessary. These meetings are held annually.
Another service of traffic is the facilitation section. In an industry based on speed, economy and service, red tape is a serious matter. Customs, immigration and health regulations hamper and delay the efficient transportation of passengers and cargo. Delays can add millions of dollars to the cost of operation.
With international airlines operating in almost 200 countries and their operations subject to the regulation requirement of numerous public authorities in every country, cooperation becomes very vi MI. Cooperation starts with the airlines themselves. A programme to cut red tape is worked out and constantly reviewed by the IATA Facilitation Advisory Committee.
For operation purposes, it is handed over to more than 100 airlines personnel at the headquarters of their airlines throughout the world. The next step is to consult with the various governmental inspection services in a cooperative effort to work out simpler clearance documentation and procedures at airports where international passengers or cargo arrive and depart.
Cooperation carries right up the line from the individual nation to the United Nations and its specialized agencies, particularly ICAO, which sets standards and recommended practices for cutting red tape through Annex 9 to its Convention. Since the inception of IATA and ICAO, there has been constant collaboration.
Numerous other international organizations, both governmental and non–governmental, Travel Agency Appointments cooperate with IATA to ensure the facilitation of air transport and to guard against the aircraft’s particular vulnerability, which is the delay factor.
IATA has numerous tasks outside the formal framework of its committees and conferences. In postal matters, IATA is concerned with questions relating to the speedy and expeditions handling of mail and with the rates paid by governments to foreign airlines for the transportation of mail.
It keeps up close association with the Universal Postal Union on these matters and has time after time encouraged reduction in airmail postage rates.
IATA Allied Service
IATA conducts various functions. The IATA collates and publishes industry statistics. It is a documentation centre and publishes on behalf of its members, issuing internal manuals, tabulations of airlines distances, technical surveys, reports and other important industry information.
The Association Protection Advisory Committee comprises of senior representatives in the economic, technical, public relations fields and legal, studies the manner in which airlines can reduce noise and emissions and yet profit from the progress of technology.
In the field of public relations, IATA maintains a worldwide information programme, furnishes source material for students of air transport, acts as a spokesperson for the industry and provides a number of special publicity and promotional services.
The work of IATA’s Public Relations Department, guided by the Public Relations Advisory Committee, also includes the organization of PR Conferences and Regional Panels as part of its effort to foster cooperation among the public relations offices of member airlines.
In order to carry out several functions, IATA has a staff of over 500 people through the world and operates with funds provided in the form of annual dues paid by members. Broadly speaking, IATA is the world association of scheduled airlines with which it coordinates its efforts to serve its passengers, shares their experiences and analyses their problems.
Representing over 180 companies from100– odd countries, together they provide a bulk of world scheduled air services. IATA plays a leading role in three respects, on the basis of the aims defined in its statutes. The Association provides machinery for the airlines for finding joint solutions to problems often beyond the resources of any single company.
Through the Association, airlines have succeeded in standardizing their operating methods and with their complementary routes, they have created a worldwide public service network, despite the many differences in language, currency, legislation and regulations.
The Association is able to act as an intermediary between governments and their users. It is the world parliament of airline companies and their spokesperson vis–a–vis various other international bodies. For governments, it serves as a forum where proposals for international rates and fares are formulated in a natural context for study and approval.
For the general public it symbolizes the uniform quality of services, the use of rational commercial methods by airlines and agents, the simplification of formalities and the lowest possible fares and rates consistent with sound economy. The International Air Transport Association (IATA) plays a very important role in the area of representing and serving not only the airline industry but also the general public who use its services.
The activities and goals of IATA cover the entire gamut in the areas of air transport, which is the key to the development of modem travel and tourism.