Sunday, July 10, 2011
This week's edition of the Economist has an excellent piece on airlines and globalization, entitled Climbing Through the Clouds, Economist, July 8, 2011 (available here). However, one strange element of the piece is the fact it identifies the International Air Transport Association as being one time akin to a "global regulator" for the aviation industry. While it is true that IATA did serve as a cartel facilitator during the days of tightly managed trade in air services, the Association operated under the regulatory supervision of national authorities (e.g., Civil Aeruonautics Board). Unfortunately, the story implies that IATA was vested with direct authority over international air transport, a rather ridiculous claim given the fact that not even the International Civil Aviation Organization--the intergovernmental institution created by the 1944 Chicago Convention--possesses that level of power.