US Transportation Secretary Rodney Slater lost few opportunities to remind his international peers of the historic nature of what they were being called together to do. In the same week in 1944, in the same Chicago hotel, a delegation of international heads of state met and agreed to an airways policy that would become known as the Chicago Convention Treaty. Was it possible, Slater was asking, to remake history?
To keep that goal in mind, one of the guests and keynote speakers was 100-year-old Welch Pogue, the original crafter of the Chicago Treaty. Pogue appealed to the 1999 gathering not to fail where the 1944 delegates had failed - their inability to reach compromise led to the bilateral system that much of the airline world still operates under today. The 1999 conference, attendees were constantly told, should be looked back on as the meeting that led to a freer and more flexible airways system.
Just how much historic significance will be attached to the 1999 Chicago beyond open skies conference in 50 years is debatable. For all the rhetoric, it became clear early in the proceedings that to get beyond open skies will require a magnitude of open minds not typical of the industry, where so much is vested in protectionism and so much pride is still attached to flagship carriers.
Few tangible results
Consequently, the tangible result of the conference was minimal and there could have been no transport minister who returned home uncomfortable with the notion that he or she played an instrumental role in the destruction of the current mix of bilaterals and open skies agreements. What was achieved at the conference's closing, was the adoption of a report that acknowledged the need to take steps to address the aviation challenges of the 21st century. A separate report was adopted by countries already signed up to US open skies deals to take liberalisation further.
To be seen as the nation most willing to build on these reports, the USA has also announced that it will initiate a policy dialogue on further liberalisation, including possible plurilateral mechanisms for achieving a more open global aviation system. It is anticipated that these discussions will be conducted on a regional basis with aviation leaders from Europe, Latin America, Asia-Pacific and other regions of the world. The discussions would also include key regional bodies such as the European Commission and Asia-Pacific Economic Co-operation (APEC)forum, says the DoT. "As 93 nations of the world meet to consider the important issues facing international aviation in the years ahead, we must maintain our momentum to improve the existing process for liberalisation of air services to enhance competition and further benefit consumers throughout the world," says Slater.
Meanwhile, the open skies march continues unimpeded. The US-Italian agreement was signed during the conference and a new open skies deal, with Argentina, was announced. Immediately following the 5-7 December meeting, Slater set out on a transportation and trade mission to several Central American and the Caribbean nations designed to expand support for an improved Western Hemisphere transportation system that would encourage trade between the USA and its Central American and Caribbean neighbours. The trip was capped by the signing of an open skies accord with the Dominican Republic.
To show further good faith, Slater also announced steps to encourage foreign air carriers to provide more service to Hawaii. The DoT has issued an order to allow virtually all foreign carriers that have the right to serve the USA to also serve Honolulu and Kona, Hawaii, and to combine these services with those to other US cities for which they hold authority. The order also will allow foreign carriers to expand their air cargo services at these airports and provide increased flexibility for these operations. The DoT also invited eligible foreign carriers to apply for authority to serve additional US cities as long as they serve one or both of those two Hawaiian cities.
These are tiny steps compared with the convention's ultimate goal of a worldwide free and open aviation policy. But many delegates felt that an important precedent was established. "It has put the issue firmly on the table," says one observer. "This can no longer be ignored. There will be more dialogue, more meetings and eventually change."
The two areas where that change might occur first appear to be either between the USA and Europe, where a multilateral deal might be possible and which could then become a blueprint for other regional deals around the world.
Or it will come via the air cargo sector, which regards itself as almost completely separate from the passenger industry. It claims different needs and is finding it increasing difficult to operate within the tight boundaries of the bilateral system, especially with level of growth it is experiencing. Both Fred Smith, chairman of Federal Express, and Tom Weidemeyer, vice-president and transportation group manager of UPS, made pleas for the freight industry to be allowed to lead the way to a freer aviation market. "I represent a global, intermodal logistics company," says Weidemeyer. "We are enablers of global commerce. But without a change in the way we are able to do business, we will become a barrier more than an enabler. We believe that open skies is a significant step forward, but today's restricted bilateral system still falls short of what today's business demands." Weidemeyer says it would not be "unreasonable" to treat cargo carriers differently from passenger airlines. "We would be prepared to go first and be the test case," he says.
European breakthrough?
The other hope for a breakthrough lies within Europe. Loyola de Palacio, the European Union's (EU) transport commissioner, makes her enthusiasm for a US-EU multilateral agreement clear. "We need to move towards a regional aviation agreement that would lead towards globalisation," says Palacio. "Our specific proposal is for the creation of a transatlantic common policy. The current bilateral agreements are a complex, difficult web that are difficult to segregate, so the USA and Europe should be trailblazers in establishing such a regional agreement."
Palacio emphasises that there is no question of abandoning each European nation's sovereign status, but the beginnings of a transatlantic policy could be put together by first concentrating on a common, high standard for less controversial issues such as safety, the environment, consumer protection, solving disputes and fair labour standards.
In many respects, the cards for such a policy are already on the table. The Association of European Airlines (AEA) has drafted a policy statement called towards a Transatlantic Common Aviation Area (TCAA) which has the backing of all major European carriers and which provides a framework for an EU-USA negotiation. "We are presenting a vision of where our airline industry needs to go," says Kees Veenstra, the AEA's deputy secretary general and drafter of the document. "What we need is to create a new worldwide regulatory framework to replace the current bilaterals. And to do that, you need a beginning. Those with the strongest shoulders should bear the biggest burdens and that is where Europe and the USA must bear their responsibilities."
While Veenstra insists that there are no preconditions to the document, some of the proposals contained within the TCAA have raised eyebrows in the USA. For example, it calls for permission for cross-border mergers, acquisitions and new entrants within the TCAA because this will be the case within the future European Common Aviation Area. Similarly, it calls for cabotage rights in the USA because this would reciprocate a US carriers' right to hop between European nations. But it acknowledges the political difficulty this will impose on the USA. "Most probably, the objective of freedom for airlines to provide services within the TCAA cannot be achieved from the outset," states the document. "The USA is known to have reservations about cabotage and not all EU member states have fully liberalised their bilateral relations with the USA under open sky agreements. Transitional arrangements are therefore likely to be required in this area. This suggests leaving EU member states a fair degree of flexibility in negotiating the terms of such arrangements with the EU.
Open approach
While some US labour representatives at the Chicago conference baulked at the inclusion of cabotage and lifting of ownership restrictions within the TCAA proposal, the general approach by labour to change in the global airways system seems open, provided they are invited to the negotiation table. "ALPA and the machinists are willing to go forward with new bilateral agreement negotiations," says Duane Woerth, president of the Air Line Pilots Association. "But we are not willing to be left behind."
Chicago delegates may have returned home with little that is tangible as a result of their meeting, but there is a recognition that change may not just be desirable, but inevitable. There is an awareness that those who arrive first to the negotiating table will have most say in shaping a new, multilateral aviation policy. Alan Larson, US assistant secretary of state for economic and business affairs, probably sums it up best: "It is time to take bolder steps," he says.
Source: Airline Business
