Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : DEWAN TUN DR. ISMAIL, PUTRA WORLD
TRADE CENTRE, KUALA LUMPUR
Tarikh/Date : 30/10/95
Tajuk/Title : THE 51ST INTERNATIONAL AIR TRANSPORT
(IATA) AGM
It is indeed a pleasure to welcome you to Malaysia for
the 51st IATA AGM. As you gather in Kuala Lumpur to discuss
the issues affecting the aviation industry, let me
congratulate members of IATA for the US$1.8 billion nett
profits generated and the turn around in its fortune for
1994 after the record losses for the period 1990 to 1993.
2. Malaysia takes a keen interest in the aviation
industry. Air transport plays a major role in the world's
economic activities with an estimated 1.2 billion passengers
and 20 million tonnes of freight being transported last
year. It is also an important economic catalyst with a
turnover of almost US$250 billion. Undoubtedly, consumers
have benefitted from the easing of government regulations of
the air transport industry which has resulted in increased
competition, improved services, wider choices and lower
fares.
3. As for Malaysia, the civil aviation system is a vital
national resource and has played a pivotal role in its
trade, tourism and economic progress. Last year the
national carrier's revenue which is about RM4.9 billion, and
the receipts from the tourism sector of RM8.3 billion,
together contributed almost 12.5 percent share of the
country's GDP.
4. Malaysia's rapid GDP growth exceeding 8.4 percent per
annum since 1988 has now made it an attractive inbound and
outbound market for both passenger and cargo traffic. Being
the 19th highest ranking trading nation in the world, and
with a merchandise trade account worth approximately U.S.
120 billion dollars, Malaysia offers tremendous opportunity
for interested operators. In fact the total value of
imports and exports by Malaysia has tripled between 1988 and
1994. As our economy expands, the national carrier's role
has broadened from promoting trade and tourism to linking
the world to Malaysia as well as to bringing about a higher
degree of economic integration and raising the level of
Malaysia's competitiveness.
5. With the Malaysian economy anticipated to continue
growing at well over seven percent per annum until the year
2020, the country's macro-economic policy for the Seventh
Malaysia plan covering the 1996-2000 period will focus on
higher value added, more capital, information and technology
intensive industries. The skill of the workforce will be
upgraded and more funds will be allocated for Research and
Development.
6. In this regard, the Malaysian Government has identified
aerospace/aviation as one of the critical sectors which
offers opportunities for the transfer of advanced
technologies in engineering, electronics, composite
materials as well as manufacturing and system integration
with other industries in the economy.
7. For this reason, the private sector and government co-
operation under the Malaysian Industry Government Group For
High Technology (MIGHT) has been established to promote
Malaysia's entry into the aerospace and aviation industry.
Although aerospace is a high risk and capital-intensive
industry, Malaysia wants a share of the world's aerospace
business which has a sales turnover of more than US$218
billion in 1994.
8. In addition, the huge demand for aircraft by Asia
Pacific countries estimated at one quarter of the 15,000
aircraft or US$400 billion in value by 2014 creates vast
opportunities for off-set work, flight training, repair and
maintenance of aircraft engines as well as the manufacture
and assembly of airframe parts and components.
9. As Malaysia is strategically located within the Asia
Pacific region, with a stable political and investment
climate as well as a highly skilled and competitive
workforce, the aerospace industry can be further developed
through joint ventures and strategic alliances with one or
more of the world's leading aerospace companies.
Incidentally, if you are looking for partners and investment
in the aerospace industry in Malaysia, you are most welcome
to attend the 3rd LIMA or Langkawi International Maritime
and Aerospace exhibition, which will be held in Pulau
Langkawi from 5th-10th December 1995.
10. In line with its aspiration to achieve a developed
nation status by the year 2020, Malaysia has embarked on a
programme of development of major infrastructures.
11. The construction of a new world class Kuala Lumpur
International Airport (KLIA) at Sepang to replace Subang
International Airport, which has almost reached its designed
capacity of 5,454 passenger movements per hour, is part of
the Government's commitment towards the planned development
of the nation. The KLIA will also propel the country's
aviation, aerospace and tourism industry into the next
century.
12. Over the last five years, the Subang International
Airport has experienced robust growth of 14 percent and 15
percent per annum for passenger and cargo respectively. For
1994, passenger movements totalled 11.3 million while cargo
handled at Subang International Airport amounted to 262,000
tonnes.
13. The new KLIA is designed with a terminal capacity for
100 million passengers, six to eight million tonnes of air
cargo per year and five runways when fully completed. The
first phase of the KLIA is estimated to cost RM9 billion and
is expected to be completed by end 1997 and operational by
1st January 1998. It will have initially, a capacity of 25
million passengers and one million tonnes of cargo plus two
runways and a main terminal and one satellite building with
a space of five million sq.ft or equivalent to the total
area of Heathrow's four terminals. KLIA will incorporate
state-of-the-art total airport management system which is a
computerised system that interfaces and integrates with the
various electronics system within the airport environment.
14. With 10,500 hectares of land available, KLIA will be
ideal for development as a major passenger, cargo,
maintenance and aerospace hub in this region. In short,
KLIA is designed to be an efficient, competitive and a world
class hub airport for the Asia Pacific region.
15. To meet the challenges posed by the 4-fold expansion in
Asia Pacific's international scheduled passengers to 375
million by 2010 and a share exceeding 59 percent of the
world's total, many countries within the region including
Malaysia have been either upgrading or building new
airports. In the case of cargo, its long term growth rate
is expected to be even faster than passenger at over nine
percent per annum.
16. Global economic development depends largely on the
reduction of barriers to trade, travel and investments. The
freer movements of goods, services and people across
frontiers have been envisaged by the World Trade
Organisation (WTO). Malaysia supports WTO and has in fact
an open trading economy.
17. In accordance with its free trade practice, Malaysia
has always propagated a liberal aviation policy based on the
principle of reciprocity. Todate we have signed a total of
73 Air Services Agreement of which 44 have been activated.
18. Whilst many Asia Pacific countries have adopted liberal
aviation policies following the deregulation of air
transport in the United States in 1978, it is ironic that
there are still developed nations that have yet to dismantle
barriers to entry and competition.
19. The world certainly needs an efficient transportation
system and the rapid air traffic growth forecast worldwide
in general, and Asia Pacific in particular, must be
accompanied by greater freedom for market access.
20. It is now time that developed countries practise what
they preached on global free trade and apply them to air
transportation. It is pointless for the United States to
single-mindedly pursue "Open Skies" and "Equivalency of
Benefits" policy and insists on getting more and more Fifth
Freedom Traffic Rights whilst keeping its domestic market
closed to foreign competitors. This policy is unlikely to
succeed in the Asia Pacific region if the gains are
one-sided and accrue only to American carriers.
21. Despite the deregulation of the air transport industry
and the introduction of a single European Aviation market in
1992, the European Union's (EU) bilaterals with many Asia
Pacific carriers can hardly be described as "liberal".
Malaysia has encountered great difficulties in securing
additional traffic rights into many of the EU nations.
"Fortress Europe" is definitely an apt term to describe many
of the prevailing bilateral Air Services Agreements. What
is needed is fairer Air Services Agreements which provide
for more balanced opportunities into Europe and the United
States.
22. For Asia Pacific nations, it could perhaps be proposed
that the governments establish very liberal exchange of
rights or even an `Open 3rd/4th Freedom' access for carriers
within this region so as to cater for the rapidly escalating
Intra-Asia Pacific traffic in line with the regional trade
liberalisation and tariff reduction policies ascribed under
AFTA and APEC.
23. To counter the threat of "Bloc Negotiations" and the
pursuit of "Open Skies" as well as to redress existing
unbalanced Air Service Agreements, Asia Pacific nations must
be prepared to act in concert and adopt a co-ordinated
stance in negotiating with the EU and the United States.
The consequence of not doing so will likely be the
domination of the aviation industry by the mega carriers
from the United States and Europe.
24. Hence, for industry to prosper, governments, and
airlines world-wide have to embrace liberal aviation
policies that reflect the spirit of liberalism, give and
take and open handedness in negotiating with one another.
25. The aviation industry has progressed by leaps and
bounds since the first flight by the Wright Brothers.
26. Economic, political and social changes coupled with
decreasing fares have resulted in exploding growth in air
travel. Technology advances on the other hand, have brought
the air transport industry to the edge of a new era of the
Very Large Transport 800 seater aircraft and the twice the
speed of sound High Speed Commercial Transport into virtual
reality.
27. As air transport is both vital and necessary to global
economic development and wealth creation, we must work
together to revamp the regulatory system and policies that
impede the growth of the industry. Together let us make it a
truly thriving global business by the next century.
28. Thank you and I wish you all a successful AGM.
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