MH370: Aircraft tracking could affect ticket prices

Last updated 08:26 04/06/2014

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Moves by airlines to keep track of their aircraft in real time following the disappearance of Malaysian Airlines' flight MH370 could push up ticket prices for passengers - but governments should also foot part of the bill, airline industry leaders said on Tuesday.

Senior executives attending the International Air Transport Association's (IATA) annual meeting in Doha this week said they needed to install a tracking system to ensure no more airliners could simply vanish as the Malaysia Airlines Boeing 777-200ER did in March.

Passengers, however, would have to bear at least some of the cost of automated tracking that is eventually expected to become mandatory.

"This would be an additional cost and would be passed to passengers," Finnair's chief executive Pekka Vauramo said.

"Who is the ultimate beneficiary of the services that the airlines provide? The answer is the passenger," Japan Airlines' chairman, Masaru Onishi, added.

"Along those lines, the airlines need to continue studying this system, especially as it pertains to the cost of not only the widespread introduction but also the sustainability of a system," he said.

IATA, which represents most of the world's airlines, announced last month that it had formed a task force to look at the various options.

Preliminary recommendations will be presented first to the International Civil Aviation Organisation (ICAO) in September and then to the industry by the end of the year, Kevin Hiatt, IATA's Senior Vice President, Safety and Flight Operations said..

"Aviation stakeholders are united in their desire to ensure that we never face another situation where an aircraft simply disappears," said Hiatt.

"While states work through ICAO to develop and implement performance-based global standards, the industry is committed to moving forward with recommendations that airlines can implement now."

However, he added at the press conference that IATA is working with ICAO to ensure that governments "have a part in this" when it comes to the cost.

He declined to say if airlines could ultimately pass the cost on to passengers, with an IATA spokesman adding that the association was not involved in "airline pricing decisions".

Meanwhile All Nippon Airways President and Chief Executive Osamu Shinobe said there were "many practical issues" that needed to be considered in looking for a solution.

"We cannot reach an easy conclusion just to have a tracking system. Therefore, before it becomes reality, we have to consider many aspects, including the cost. Otherwise, it is just a pie in the sky," he added.

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The CEO of another major Asian airline, who asked not to be identified, added: "If governments pay, passengers will have higher taxes. If airlines pay, passenges will have higher ticket prices. That is why we must be careful about what we implement. It has to be what we need and not anything more than that."

- Reuters

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