Aviation liberalisation 2.0

Back in the 90s the European aviation industry was liberalised, coming from a purely national to a “European” system within a relatively short period of time.

The passengers were happy about new choices, cheaper air fares & more connections. The aircraft manufacturers sold more of their products than ever. And the airlines made intensive use of their new opportunities by building additional capacity & new business models. Also for us, the pilots, this new environment brought a lot of changes: new job opportunities, new forms of employment and different careers, built on many different employers, instead of just one as before.

Now, twenty-five years later, the European Commission (EC) wants to boost the growth of the aviation industry globally. How? By simply lighting up another rocket booster of liberalisation. The plan is simple: this will generate more choices, more connectivity, more aircraft, more jobs – as it has done before! Will it work? Well, for some stakeholders this is an easy question. Yes, of course – new opportunities will result in “more” of everything. But I have my doubts, and I am not alone!

The first example: Wet-leasing. The EC would like to liberalise the market access for third country airlines based on such leasing models – as a first step limited to the EU/US market, but more to come. Does anybody in the industry really believe that any of these new jobs would be based in Europe? Why would anyone need such a wet-leasing based business model, if the plan was to build it on European labour anyhow? And it will only be a matter of time that existing European quality jobs will be replaced by 3rd country crew wrapped in a shiny metal tube. In the end, Europe will not only lose its jobs, but also production, local spending power and payments of taxes and social security.

The second example: Ownership & Control. Again, the EC wants to completely liberalise the existing restrictions on 3rd country ownership of and control over EU carriers – be it based on reciprocity. Sometimes experts from other industries ask the aviation people: “Why do you still have those O&C restrictions?” Well, maybe because the production sites in other industries don’t have large wings and two powerful engines that can easily take them to another country, region or even continent within hours? The consequences of such a step need to be carefully examined before any action is taken. The maritime industry should be a warning example here!

The last example is the negotiation of new Air Transport Agreements with 3rd countries. At the time, the EU Commission holds mandates for negotiations with – among others – the UAE & Qatar. While the UAE does not show too much interest in such negotiations (they seem to like the cherry-picking approach more), Qatar has entered talks right away. The big question for us as the employees of the European industry is: how can we achieve a “balanced” agreement between a small country with just one airport – but plenty of spare aircraft capacity – and a whole continent with over a hundred attractive destinations?

All these questions will require our professional pilots’ input. We – pilots – are an essential part of this industry in Europe and contribute to its success, so we need to have our say. Liberalisation is an easy thing. Recovering from its consequences isn’t!

by Capt. Dirk Polloczek

Publicerad 2019-12-17 av SPF