International Air Transportation Association

The International Air Transportation Association (IATA) is the global trade organization for the international airline industry, representing 230 member airlines that account for 93% of scheduled international air traffic, and is headquartered in Montreal, Canada. The mission of IATA is “to represent, lead, and serve the airline industry,” by working with governments and businesses to increase passenger convenience, reduce costs, and improve efficiency. Since its founding in 1945, IATA has promoted the growth of international air transportation by fostering interairline cooperation and coordination in areas such as safety, rate-setting, security, and economic efficiency. IATA should not be confused with the International Civil Aviation Organization (ICAO), which is an agency of the United Nations founded in 1947 with headquarters also in Montreal and principally concerned with rules and procedures of international air navigation. As such, both IATA and ICAO serve roles not unlike other international organizations that have established functional frameworks to facilitate global integration.

The history of IATA mirrors that of air transportation in general, as aviation technology developed during the 20th century and the need for international standards and cooperation became more acute. The precursor to IATA was the International Air Traffic Association, founded in The Hague, the Netherlands, in 1919, which only included European airlines. Toward the end of World War II in 1944, an important air transportation conference was held in Chicago that established many of the rules and procedures for the conduct of civil aviation for the postwar period. The 1944 Convention on International Civil Aviation (also known as the Chicago Convention) involved states from throughout the world and began the transformation of aviation into a global industry. The creation of IATA in Havana, Cuba, in 1945 directly reflected this new international orientation as its original 57 members came from 31 different nations.

One of many important outcomes of the Chicago Convention was the establishment of the so-called freedoms of the air among the participating states. These freedoms included, for example, the right to land in another country as well as to provide air service between countries. While there was some hope for universal recognition of most of these freedoms, the lack of a multilateral consensus led to the need for a series of bilateral air service agreements, modeled after the U.K.-U.S. [Page 927]Bermuda agreement of 1946. The bilateral agreements between states thus became the framework for an international regulatory system that controlled where and how many flights could be conducted between states, and at what price. To facilitate governmental approval of air fares, IATA was delegated the responsibility of coordinating traffic conferences at which a coherent system of rates could be established so as to facilitate the orderly growth of international aviation. At the first IATA Traffic Conference in 1947 in Rio de Janeiro, agreements were reached on issues such as fare construction rules for multisector trips, revenue allocation among airlines for interairline travel (interline traffic agreements), baggage allowances, ticket and air waybill formats, and technical specifications. IATA also served (and still serves) as the official traffic clearinghouse for debt settlement among airlines.

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