At the Service of Small and Medium-Sized Carriers

From the beginning, air transport was designed to be used in the same way in all countries of the
world with the same constraints but also the same possibilities for all. As early as the Chicago
Conference in December 1944, which created the foundations on which air transport was built, and
then with the creation of IATA in April 1945 in Havana, it was clear that this mode of transport should
be accessible to all peoples. This is how, unlike many in the fields of transport: trains, roads but also
hotels, the operating airlines can cooperate with each other at leisure using the same tools and the
same procedures. This is a considerable advantage that is ultimately relatively unexploited.

Of the 1200 or so scheduled airlines, only a few hundred of them use the facilities that they could
greatly benefit from. This of course covers all operational aspects, for example a spare part labelled
AOG (Aircraft On the Ground) in plain English a breakdown for a grounded aircraft, will have absolute
priority on all cargo holds. That is one of the aspects, but the facilities are also exercised in the
distribution of air transport. However, these are very often little known to the small or medium-sized
companies that make up the vast majority of the players, even if they represent only a little more
than 25% of the 1,000 billion in turnover that will most likely be reached this year.

In fact, the large carriers, which have a large infrastructure and specialized services in all areas, are
the only ones to use all the facilities at their disposal, and even then most do not pay any attention to
small markets. But small companies also have the same facilities and they do not use them because
the managers do not have the teams with in-depth knowledge of their usefulness and access. It is
striking to see the energy spent on creating ancillary products such as payment for checked or cabin
baggage, privileged access to certain check-in counters, the use of video games on board, not to
mention the payment of meals or drinks and so on. All this has a cost and even if the revenues end
up becoming significant, the related expenses are not negligible.

Many managers entrust the distribution of their product to the Internet channel alone. I remember
meeting a Swede in the admittedly distant past, the founder of his airline and whose headquarters
were based in Gothenburg. Its product consisted of operating twice a day flights to London, Paris,
Milan and Nice with MD 83s, comfortable 180-seat jets. I asked him how he planned to distribute his
product? “Only through the Internet through my website,” he replied. “Very well,” I pointed out, “but
then you will have to spend considerable amounts of money to inform your potential customers. You
will operate 8 daily frequencies from Gothenburg which has around 500,000 inhabitants, but you will
have to reach the 12 million or so in the London metropolis, the 11 million Parisians who live in Paris
and its surroundings, the 4 million in the Nice area and the 6 million Milanese while in each of these
cities you only operate 2 daily frequencies. It’s going to cost you a fortune. Why don’t you use the
tour of travel agents, whom you will have to pay, but only when they have sold seats?”. This man
took me for a dangerous nerd… But he filed for bankruptcy after 6 months.

Why this anecdote? Simply to emphasize the many facilities available to companies, starting with the
GDSs which are linked to all travel agencies, the IATA BSP (Billing and Settlement Plan) which allows
the issuance of tickets and the repatriation of funds and the “interline” agreements with one of the
two companies specializing in global distribution: Germany’s Hahn Air and France’s APG. However,
all these tools can be used at variable costs with the exception of a few costs for entry into the BSPs,
i.e. the expenses are only payable once the revenues have been received. Why then are they not
used? Most of the time due to a lack of knowledge and it’s a shame. This does not in any way prevent
us from using the tremendous possibilities offered by the Internet.

Everything is designed so that every airline, no matter how small, can access all the world’s markets.
The AFRAA (African Airlines Association) has understood this well because it is in the process of
launching information on the subject to its African constituents. Its example could be usefully copied
by other associations of small and medium-sized airlines for which IATA is too big an organization.