Liberalisation - time to reconsider

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محتوى الصفحة: Home > مجلة النقل الدولي "Transport International" > Issue 13 October 2003 > Liberalisation - time to reconsider

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Francois Ballestero calls for a comprehensive appraisal of aviation reforms in Europe, Political Secretary of the ETF, based in Brussels, Belgium

The European Commission is planning a review of the so-called “Third Package for the liberalisation of air traffic”. Its aim is to correct certain provisions that have become obsolete or unsuitable or that have not been enforced.

However, what is needed is a full-scale appraisal of how European civil aviation has responded to this package of reforms, which (building on the first and second packages of 1988 and 1990) was adopted under the framework of the Single European Act of 1993.

The third package is founded upon three pillars that liberalise the licensing of airlines, the routes they can fly and the prices they can impose – in EU member countries, as well as in Norway, Iceland and Liechtenstein. These are fundamental reforms, and dramatic changes have followed in the decade since their inception.

Only just over half of those airlines active in 1993 are still around in 2003. Likewise in the United States, in early 2000 it became clear that the majority of the 180 new airlines launched since US air traffic underwent liberalisation in 1978 are now gone. Names as famous as Pan Am and TWA have collapsed spectacularly into bankruptcy.

While the stated aim of the third package was to create “a level playing field” through a gradual approach to liberalisation, it is clear that the European Union is basing the construction of its policy on the American model. Admittedly, it has tried to avoid the American-style “big bang”, but this is an effort that has not always proved successful as the demise of Sabena, Swissair, Air Lib and others demonstrate.

In the meantime, there has been a growth in the number of regional carriers. This has promoted regional trade and tourism in Europe and thereby reinforced regional development, thus providing a broader foundation for the regions of Europe.

Workers lose out
The principal beneficiaries of this process of liberalisation have been consumers, who have gained access to extended travel options and a much wider range of ticket prices. In the wake of large-scale redundancies, widespread job insecurity, the extension of social deregulation, the lack of European social legislation and the development of social dumping, it is becoming clear that the major losers from liberalisation are the workers.

Liberalisation has facilitated the rapid development of transnational low-cost, minimum-service carriers. These companies are now raising structural issues and radically changing the industrial landscape in Europe. Paradoxically, they may be in the process of becoming European Community companies flying out of many different cities across Europe.

For the union movement, the challenges that these airlines pose involve the recognition of union organisations (or their reinforcement where they are already recognised), employment stability, the improvement of pay and working conditions, the battle against social dumping and improvements in professional status.

The ITF's European arm, the ETF, is campaigning hard to ensure that the advent of low-cost airlines will not destroy all the social benefits and entitlements that were only obtained within traditional airlines after long, hard struggles.

One of the aims of the third package was to eliminate monopolies. Yet the European Council of Ministers has now given the Commission a mandate to negotiate open-sky agreements with the United States – a decision likely to lead, in the short term, to consolidation between airlines. This potential concentration, the contours of which would only become clear later, would recreate mega-companies, dominating the European market, with a major risk that jobs would be lost due to the restructuring that this would entail.

In the wake of the attacks of 11 September 2001 and the war in Iraq, the US government has provided enormous financial assistance to support its air transport industry. Despite the depth of the current crisis, the longterm outlook is still optimistic. The ever-present potential for growth is demonstrated by the projections for Airbus (growth of 4.7 per cent per annum over the next 20 years) and Boeing (growth of 4.5 per cent per annum, again over the next 20 years).

These projections are destined to more than double global air traffic, even while the industry's structural crisis persists, and demands to be tackled. In order to curb the current effects of the crisis, there is a risk that airlines will develop twin policies: on the one hand, seeking to make productivity gains through increased rationalisation and, on the other, relocating low value-added functions to countries where labour is cheaper.

Joint responsibilities
While the principal trends in the sector are pretty clear, the cycles that it will go through remain heavily dependent upon external factors. This is why it is completely unsatisfactory to take account of economic considerations alone. Political, social and environmental factors must form part of the ensuing negotiations within the European air transport sector, and unions and management together have a duty to take responsibility for industrial relations in the sector during cyclical and structural change.

In its White Paper European transport policy for 2010: decision time, the Commission stressed that, in order to combat air transport congestion and saturation, airport capacity would need to be optimised, the growth in air transport would need to be reconciled with environmental priorities, and existing safety levels would need to be maintained.

The ETF believes that all air transport policies are interdependent and that this is no time to be adopting partial measures in the absence of an overall appreciation of all the issues and problems facing the industry and its workforce. Furthermore, the recent conference of the International Civil Aviation Organisation (ICAO) in Montreal demonstrated that the debate over a new phase of liberalisation is still ongoing, and that not all countries share the same approach to this issue.

Given the known dangers and proven results of 10 years of liberalisation, the ETF believes that a new phase of air transport liberalisation would be catastrophic for the workforce. Rather, Europe needs to re-regulate air traffic so as to establish rules allowing for the fairest possible competition and to avoid instances of social and fiscal dumping. This is why the ETF is strongly insisting that the Commission should not adopt any new measures that would lead either to further job losses or to a new phase of social deregulation.

The Commission's planned review of the third package should comprise a comprehensive assessment of the policies applied to date. It should be all-encompassing, and should lead to the drafting of detailed proposals to implicitly involve labour and management working together as major players in the construction of the European air transport industry of the future.

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Issue 13 October 2003

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