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Concept
International Air Transport Association
Summary
The International Air Transport Association (IATA aɪˈɑːtə) is a trade association of the world's airlines founded in 1945. IATA has been described as a cartel since, in addition to setting technical standards for airlines, IATA also organized tariff conferences that served as a forum for price fixing.
Consisting in 2023 of 300 airlines, primarily major carriers, representing 117 countries, the IATA's member airlines account for carrying approximately 83% of total available seat miles air traffic. IATA supports airline activity and helps formulate industry policy and standards. It is headquartered in Montreal, Canada with executive offices in Geneva, Switzerland.
IATA was formed in April 1945 in Havana, Cuba. It is the successor to the International Air Traffic Association, which was formed in 1919 at The Hague, Netherlands. At its founding, IATA consisted of 57 airlines from 31 countries. Much of IATA's early work was technical and IATA provided input to the newly created International Civil Aviation Organization (ICAO), which was reflected in the annexes of the Chicago Convention in 1944, the international treaty that still governs international air transport.
The Chicago Convention did not result in a consensus on the economic regulation of the airline industry. According to Warren Koffler, IATA was formed to fill the resulting void and provide international air carriers with a mechanism to fix prices.
In the late 1940s, IATA started holding conferences to fix prices for international air travel. IATA secretary J.G Gazdik stated that the organization aimed to fix prices at reasonable levels, with due regard being paid to the cost of operations, in order to ensure reasonable profits for airlines.
In 1947 at a time when many airlines were government-owned and loss-making, IATA operated as a cartel, charged by the governments with setting a constrained fare structure that avoided price competition. The first Traffic Conference was held in 1947 in Rio de Janeiro and reached unanimous agreement on some 400 resolutions.
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