Aviation unions attending the fifth air transport conference of the International Civil Aviation Organisation (ICAO) in March will be challenging expected calls for further liberalisation of the industry. ITF Aviation Secretary Shane Enright summarises the alternative vision they will be presenting

ICAO’s fifth Air Transport Conference takes place against a background of gloomy and worsening prospects for air services, for those working in aviation and for the communities and industries that are dependent upon them. The ITF has long supported the role of ICAO as principal custodian and regulator of the international economic rules governing the industry. There is a clear need to maintain a link between safety considerations and economic concerns, since economic decisions have the potential to affect safety performance. However civil aviation unions fear this crucial link could be compromised by plans for ongoing aggressive liberalisation of a sector that desperately needs to concentrate on stability, accountability and fair play.

Intervention for stability

The global aviation industry has clearly failed to manage the business cycle. Even before the events of 11 September 2001 it was clear that the industry was piling on capacity in order to gain market share at the expense of profitability. This long-term pattern is confirmed by the chief economist of the International Air Transport Association (IATA), who described airline profitability as “marginal even in the best of years”. If market mechanisms have failed to deliver stability – or worse, added to the industry’s woes – then governments must intervene to impose order. Aviation is not a fringe activity; it is at the heart of the economic health of nations. It is too valuable to be left in the hands of unaccountable board rooms, working to short-term shareholder objectives.

Economics and safety together

The ITF opposes the transfer of responsibility for economic regulation of aviation to the World Trade Organisation. The subcontracting of formerly integrated activities, such as maintenance and ground handling, risks breaking the line of safety command and communication between activities that are now regulated solely by commercial contracts. As new forms of industrial structure and organisation emerge, they will need to be regulated to ensure that safety and security do not slip through the net.

Public control of key services

Private companies that are answerable to shareholders, yet underwritten by governments, are supplying an increasing proportion of aviation services. Many providers, such as airports and air traffic services, are essentially monopolies authorised to operate in the public interest – and these should remain under public control. It cannot be right that shareholders gain the benefits while governments become the guarantors of risk. There has to be a balance that recognises the social, cultural, and nation-building role of the aviation infrastructure.

Protection and support

Ever since ICAO was established over 50 years ago, aviation has developed on the principles of sovereignty and reciprocity. These visionary principles have helped small and large nations to participate alike in the growth of aviation. They have also acted as a key barrier against the development of flags of convenience of the sort seen in the maritime transport industry.

The ITF believes that all nations, but especially developing nations, need support and protection to develop their aviation markets as part of a general improvement in their core economic infrastructure. The current ownership and control regulations, which limit the level of foreign ownership of nationally designated airlines, have served the industry well. There is scant evidence that a free-for-all of transnational consolidation among airlines would lead to a healthier industry or improved passenger services.

Partnership for the future

At its last major conference in 1994 ICAO concluded that aviation employees, as stakeholders, should have a voice in the future of their industry. Aviation employees certainly are stakeholders in their industry. So much so that a number of airlines and service providers are operating today only because aviation workers have made major sacrifices to save their national carriers or providers from poor economic management.

These sacrifices have amounted to many billions of US dollars in lost wages, reduced conditions and unpaid work. Aviation workers are willing to support their industry in the long term. But they ask in return that the industry takes a long-term view of employee security, rewards and investment. They urge regulators to help ensure that employees do not become accepted as the principal disposable asset when managing business downturns. 

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