The US is the birthplace of deregulation and the gospel of freeing markets from economic controls was exported around the world. US Secretaries of Transportation and their staffs will point with great pride to the list of over 100 countries as proof that access to the US markets compelled foreign countries to “adopt” the lessons of Dr. Kahn abroad to other countries.
Without directly criticizing the deregulation movement, Captain Moak, ALPA’s president, made a case that the gospel has not been fully accepted within those other countries. The union’s call for a new approach in international aviation negotiations was made at an International Aviation Club speech on March 10.
His facts included a detailed recitation, particularly the Middle East, of how countries have created policies which favor their flag carriers. Perhaps the most egregious example was one government in which vertical integration had reached the extreme; Captain Moak related that an individual occupied the following positionS in his country:
· Head of the national bank
· Head of the FAA
· Director of the airport
· Chairman of the national airline, and
· Prime minister
That same oil rich country publishes that its export of petroleum comprises 5% of its GDP and the airlines generates 28% of that same metric. The air carrier sectors employees total 250,000 people.
ALPA included an impact of this foreign growth is US shrinkage. Where once American carriers flew 45% of the world’s fleet, today the number is 17% and by 2025 the astonishing number will be 5%. That trend line was the most compelling proof of the speech’s thesis.
Captain Moak concluded that Open Skies needs a 2.0 version which he labeled should be called Fair Skies. The new standard should include a test (both retroactive and prospective in application) to assure that the other country does not provide unfair support of their carriers.
He also pointed out that even without a Fair Skies regime, the US government needs to think carefully about its exercise of its existing prerogatives, specifically the grant of the dramatically advantageous pre-clearance facility in a foreign airport, especially where only an international air carrier operates or predominates. The well-publicized battle over including such a benefit to a foreign carrier at Abu Dhabi was cited, especially the broad coalition of ALPA, A4A, ACI and the US Chamber of Commerce against this action. The future list for such an anti-US carrier initiative will see additions at Doha and Dubai. Congress does not seem to be outraged.
The ALPA president returned to the terms to be included in his Open Skies 2.0 and recited the oft-cited Norwegian Air International case. The parent company, based in Norway, plans to obtain an Airline Operations Certificate from the Irish Aviation Authority and hire cockpit and cabin crews in Singapore. This is new to aviation, but the legal fiction called Flag of Convenience which has drastically changed the distribution of the maritime industry. Today, shipping companies register their vehicles in countries with low safety and tax standards. Based on this threat, Captain Moak would include a provision which would assess the labor standards of the country from which an applicant would seek authority to the US.
The speech included criticism of the ExIm bank and the low level of US pilot compensation, particularly regional carriers. Those messages will not aid in ALPA’s effort to expand their coalition; however the basic message on Fair Skies contains much substance around which the aviation industry should coalesce.
The Captain wittily wrapped his introduction and close in the Olympic Flag. His analogy indicated in his last paragraph that his proposal will be a marathon, not a sprint. That’s correct. There are more than 100 existing Open Skies agreements and their terms permit termination on a year’s notice (tied to the airline scheduling seasons) or a dispute resolution that a violation of Article 11 Fair Competition is resolved against the foreign country. Aviation’s policy assertions have had little resonance in the White House , maybe the Obama aviation policy makers will listen to this union.Share this article: