Wednesday, September 16, 2009

Bisignani at the International Aviation Club

Giovanni Bisignani, Director and CEO of the International Air Transport Association, urged U.S. President Barack Obama and his Administration to formulate a comprehensive aviation policy.  See Giovanni Bisignani, Remarks to the International Aviation Club, Washington, D.C. (Sept. 15, 2009) (available here).  Coincidentally, this came just a day after former American Airlines President and Charman Bob Crandall recorded his thoughts for the International Aviation Law Institute's Conversations with Aviation Leaders series that the U.S. direly lacked such a policy.  See "A Conversation with Bob Crandall."  However, Bisignani and Crandall would likely find little common ground on what such a policy would look like.  On the matter of air transport liberalization, Bisignani stated:

Finally, we must cooperate with government to liberalize this crazy industry. It has been three decades since the US started the process with domestic deregulation. This crisis highlights that we must finish the job.

The US has always been a bastion for free markets. Your open skies vision changed the industry market by market. The US-EU agreement on open skies is a great example. It did not go as far as we wanted and outdated ownership restrictions remain.  But it is an important step in the right direction creating new opportunities in the world’s largest aviation markets. Now we need a strong signal on liberalization by addressing ownership in the second stage.

. . .

Let me be clear. We are not asking for bailouts. But airlines need the freedom to operate like any other business. The ability to merge or consolidate across borders could be a lifeline particularly if the situation gets bloody later this year. Consolidation strengthened some European carriers -- Lufthansa with Swiss, Brussels, bmi and Austrian as well as Air France with KLM and an interest in Alitalia. Delta and Northwest are good examples on this side of the ocean.
But in a global business why restrict consolidation within political borders? Automobiles, telecoms and pharmaceuticals are all strategic industries benefiting from global capital. Why treat aviation differently? It does not protect jobs.  About 200,000 US airline jobs disappeared after 9/11. A different approach is required.

See Bisignani, supra; cf. Robert L. Crandall, Remarks to the Wings Club, New York, N.Y. (June 10, 2008), reprinted at 8 Issues Aviation L. & Pol'y 9-19 (2008) (criticizing the U.S. open skies policy and offering support for maintaing tight caps on foreign ownership of U.S. airlines).

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