FlyingTypers Logo
FlyingTypers Ad
   Vol. 14  No. 19
Monday March 2, 2015

Grexit And Des Is Back From Exit

     February has been quite a month for news related to IATA and IATA Cargo.
     First, the man who headed IATA air cargo for three years and hosted the last World Cargo Symposium (WCS) in Los Angeles in 2014 (and, after WCS, quickly “retired to spend more time with . . . family”), Des Vertannes has almost as quickly regenerated himself and “unretired.” He is back in air cargo reportedly having joined a Boston-based IT firm.
     IATA has announced that it is offering cash on the barrelhead for anybody with the best idea willing to travel to PVG for WCS on March 8. So far, only three companies have made the cut and are scheduled to present their ideas; all are Dutch.
     We have reported in the past that IATA Cargo has called for ideas at other WCS gatherings, but handing out bucks for brainstorms is something entirely new for air cargo.
     On one hand, the gambit confirms IATA doesn’t really have anything in its bag of tricks that can be construed as a breakthrough for the delegates at WCS this year.
     On the other hand, pitching to the strength of air cargo—the thousands of companies and tens of thousands of people who make this industry great—may just be the winningest idea all by itself.
     We just wonder how all of the smart people landed in the Netherlands.
     But let’s suspend disbelief and see what they have to offer, as we will certainly share our thoughts, dear reader, right here, as time goes by.
     This is about a paper IATA recently put out, which we suppose was created out where that organization thinks some of its big thoughts around beautiful Lake Geneva in Switzerland.
     In Europe tensions have recently risen between the newly elected Greek government (led by Prime Minister Alexis Tsipras of the leftist Syriza party) and other members of the Eurozone, as a so-called Greek exit or “Grexit” from the EU Zone looms large on the horizon.
     Grexit is also the subject of a recent paper from IATA titled “What would a ‘Grexit’ mean for the Eurozone air passenger market?”
     The paper is impressive in presentation (linked here) put out by by some economic folks in Geneva.
     But upon closer examination we wonder if these people really know what they are talking about.
     In truth, this report actually says very little, providing a lot of figures but scarce background and no clear guidance on how Greece’s “Grexit” might impact European aviation.
     For example, in the analysis of the passenger traffic streams, both domestically within the various European states and intra-European, IATA has either forgotten a few significant factors impacting European aviation or voluntarily decided not to mention them:
     While Germany, as the economically strongest EU member, plays a significant role in IATA’s analysis, the considerable impact of strikes occurring in the last few years, which have taken down German aviation to a practical standstill, appears to have been disregarded in this report.
     Likewise, IATA forgot to mention that the German Passenger Tax (GPT) imposed on all tickets in Germany has driven sizable numbers of German air passengers in parts of the country with other air options to utilize gateways such as Zurich, Schiphol, Brussels, and Vienna.
     IATA outlines that “Indeed, some economists think that euro exit could actually present the weaker members of the Eurozone with better long-term prospects than remaining in the euro, and potentially lead to faster growth in the region as a whole in the long term.
     “This would particularly be the case if some Grexit-type event resulted in a pick-up in domestic demand in the ‘healthier’ parts of the region—notable in Germany,” IATA writes.
     How an exit of Greece from the Eurozone is supposed to stimulate the domestic growth in Germany is unexplained in this report.
     Thinking into it a bit further, we wonder why Germans would fly more (or other European nationals might commence flying via Germany or on German air carriers) because Greece left the Eurozone?
Greece is a popular holiday destination in Europe.
     But supposing Grexit occurs and the Drachma returns, vacationing in Greece would actually be less expensive for Eurozone citizens as IATA has outlined that that Germany alone would have to write off 83 billion Euros (US $94.5 billion), something German Chancellor Angela Merkel has promised “could not and will not happen.”
     Grexit has a number of ramifications IATA has overlooked, including its political effect on the rest Europe.
     In some quarters, the thinking follows that writing off Greece’s debt entirely could also boost the advent of anti-European, anti-Euro and nationalist movements throughout Europe.
     IATA’s analysis does not take into account that while a “Grexit” would have Greece expelled from the Eurozone, the nation would still be a member of the European Community.
     But while the Rome and Maastricht European Treaties provide ample guidance on accession to the EC and member states’ commitments and obligations, they do not provide for an exit mode.
     IATA’s economists and report writers utilize information from many sources, including the Bloomberg and Reuter’s newswires.
     Not a bad idea to add some Mark Twain words to the mix:
     “It's tough to make predictions, especially about the future,” wrote Samuel Langhorne Clemens (MT).

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Access complete issue by clicking on issue icon or
Access specific articles by clicking on article title

Vol 14. No 16
Lunar New Year Around The World
ASEAN No Show Still Has A Date
The Year Of The Green Wood Goat
It's Your 'Fortune' Cookie
Saudia Strong
Make In India
Vol 14. No. 17
The Girl In The BIFA Halo
The Flux & Fog Of Ocean
Chuckles For February 23, 2015
Best In Show—FIATA Not Yada Yada Part II