Transport and communication remain a key driver to most of the human activities carried out in today’s society. The two sectors of the economy are interdependent. However, in spite of this relationship, certain aspects of institutional streamlining are essential.
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The strengths and weaknesses of these two elements, as well as their impacts on the economy, should be reviewed. The transport industry is made of many sub-sectors. They include, among others, rail, road, water, and air transport. All of them have unique characteristics and contribute differently to economic growth.
In this essay, the focus is made on the civil aviation wing of the transport industry. Two agencies operating in this industry are reviewed. To this end, the author of the paper examines the historical backgrounds of the International Air Transport Association (IATA) and International Civil Aviation Organisation (ICAO).
In subsequent sections of this paper, examples of negative and positive connotations of the two agencies are illustrated. The intention is to highlight the efforts made by the authorities in improving the international aviation industry.
The International Civil Aviation Organisation: Historical Background
The agency draws its authority from the United Nations (UN). According to information obtained from its website, ICAO is one of the many specialized agencies formed under the auspices of the United Nations (International Civil Aviation Organisation [ICAO], n.d.). The organization is tasked with the responsibility of formulating key techniques and strategies to promote the efficacy and safety of operations in the international aviation industry. It has its headquarters in Montreal, Canada.
At the turn of the 20th century, the global airline industry was beginning to take shape. As such, there was a need to introduce some streamlining measures into the industry. The aim was to regulate the activities of the operators in this sector. The International Commission for Air Navigation (ICAN) acted as the regulatory body at the time.
However, membership of the regulatory body was not very attractive. For example, in 1903 (when ICAN had its first convention in Berlin), the organization had only eight members. Key policy measures were first realized when another convention was held in London in 1912. The convention came up with radio call signs, which were expected to be used by aircraft.
The ICAO came to replace the ICAN on a permanent basis in 1947. The former had been disbanded in 1945. To make sure that there was no vacuum left after the disbandment of ICAN, a caretaker organization was formed. The transient agency was referred to as the Provisional International Civil Aviation Organization (PICAO).
The caretaker entity operated for two years, giving way to the eventual creation of the ICAO in 1947. The organization (ICAO) credits its formation to the famous Chicago Convention of 1944. Its formation was seen as a way of stabilizing air transport in the aftermath of World War II.
The growth of the aviation sector in the world has seen a corresponding rise in the number of members who have joined the convention. Information obtained from the website of the convention reveals that as of 2011, 190 members of the UN had ratified the treaty in their countries. In effect, the countries were active members of ICAO (ICAO, n.d.). The organization’s leadership is drawn from a governing council that has a three-year mandate. There are 36 members in the governing council.
The states taking part in the council are divided into three categories. According to Milde (2012), the first category comprises of states that are seen as occupying strategic positions in air transport. The second tier consists of countries that make significant contributions in terms of facilities that promote international air navigation. Lastly, the third class is made up of countries that give a geographic representation to the council.
It is noted that ICAO plays a number of roles in the aviation industry. One of the roles assumed by this entity is the standardization of procedures associated with the international aviation industry. In terms of communication, ICAO helps to provide a standard framework for the Aeronautical Message Handling System (AMHS).
Milde (2012) points out that the organization is responsible for publications that contain the required standards for several aviation procedures. An example is the Aeronautical Information Publication (AIP) that illustrates the standards to be adopted with respect to airspace and aviation facilities. According to Milde (2012), ICAO is also instrumental in the development of the airline code system. The system is an important communication platform for air traffic since it enhances the development of flight plans.
The International Air Transport Association: Historical Background
The International Air Transport Association is an aviation agency that caters for the welfare of airlines. The organization was formed in Havana, Cuba, in April of 1945 (International Air Transport Association [IATA], 2011).
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The entity is essentially an agency that champions for the welfare of the airlines. Information contained from public records indicates that the association succeeded the then International Air Traffic Association (IATA, 2014). The latter had a narrow scope, which IATA was keen on improving upon. The new organization has its headquarters in the Canadian city of Montreal.
At its inception in 1945, IATA had a total of 57 members. Majority of the founding members were drawn from Europe and North America (IATA, 2011). The regions were very active in the international aviation industry. However, it is important to appreciate the fact that the 57 members represented just 31 countries. The organization has experienced tremendous growth over the years. Today, it has a membership of 240 drawn from 118 countries worldwide (IATA, 2014).
According to Tiffin and Kissling (2007), most international bodies are often a creation of industry stakeholders. The stakeholders are keen on developing technical aspects of the trade. The IATA draws its life from the ratifications of the Convention Relating to the Regulation of Aerial Navigation. According to IATA (2014), the convention was held in 1919. It is important to note that organized international flight was not realized until 1919.
The organization of these flights called for an agency that would develop policies and a properly working framework. The reason is that such flight activities required regulation. At the time, rudimentary navigation systems required an agency that would enhance the safety and reliability of air transport. The same explains the formation of IATA. The body was meant to oversee international flights, which were increasing with a rise in globalization.
The organization was formed with a number of objectives in mind. According to IATA (2011), one of the missions of this entity is to safeguard the interests of operators in the airline industry. It is engaged in lobbying for these interests among member states and regulators. Secondly, the organization has a specific role to play as far as the airline customer is concerned.
As such, IATA is expected to ensure that airlines provide quality services to the customer (IATA, 2011). The third objective behind the creation of the entity is capacity building. To this end, IATA was created to ensure that there are adequate professional and expert services in the industry, which are required for growth.
Given its status in the airline industry, IATA is tasked with a number of responsibilities. Safety is the most fundamental of these objectives. The concern comes against the backdrop of serious accidents at the time (IATA, 2011). In addition, the organization was created to provide security to the airline industry.
The need for security was compounded by the terrorist attack against America in 2001. A number of airlines were involved in this attack. Priorities and objectives associated with the entity were adjusted to ensure the overall well being of the airline industry.
Examples of Negative Attributes of the Agencies
In any sector, there are a number of agencies tasked with the responsibility of formulating policies and frameworks to oversee the activities of the stakeholders involved. However, the operations of these regulatory agencies may be counterproductive to the players involved. Tiffin and Kissling (2007) are of the opinion that IATA is such an entity. It is noted that the role played by IATA in terms of setting up prices in the industry is turning the agency into a cartel.
Tiffin and Kissling draw similarities between the agency and cartels operating in the oil industry. According to Tiffin and Kissling (2007), the interest groups in the energy sector determine prices in a bid to control the market. Price setting may be intended to promote fair competition. However, it appears that IATA has exploited this regulatory aspect of the body.
At around 1941, IATA came up with a framework meant for the coordination of flight tariffs. According to Tiffin and Kissling (2007), any two airlines were required to come up with a common figure to be used as the price for a given flight. If the deal involves two different countries, the opinion of the member states with regards to the set price is sought.
Such a move locks the client out of the process. There are many cases involving collisions between airlines and governments to keep the prices high for maximum profit. At the end of the day, the airline consumer suffers at the expense of the profits made by aviation companies. Such forms of exploitation go against the principle of customer satisfaction.
Positive Attributes of the Agencies
As mentioned in the previous sections, ICAO was instituted at a time when the international civil aviation industry was nascent. The subsequent two World Wars made the situation worse for operators in the industry. Over time, the industry has recorded significant improvements. At the center of the improvements in the communication system adopted by IATA and other stakeholders.
The airline codes have enhanced safety in aviation travel. Milde (2012) suggests that improved communication systems have helped reduce air accidents. In addition, ICAO has proved instrumental in the recovery of aircraft that experience difficulties in the air. In general, the agency has demonstrated its effectiveness in the making air transport a safe endeavor.
International Air Traffic Association. (2011). Introduction to the airline industry. Montreal: IATA.
International Air Traffic Association. (2014). The founding of IATA. Web.
International Civil Aviation Organisation. International civil aviation organisation: A united nations specialized agency. Web.
Milde, M. (2012). International air law and ICAO. Québec, Canada: Eleven International Publishing.
Tiffin, J., & Kissling, C. (2007). Transport communications: Understanding global networks enabling transport services. London: Kogan Page Publishers.