May 3, 2012
AEA Suggests Greater Cooperation Necessary for Survival of Flag Carriers in Former Yugoslavia
The liberalization and consolidation of the global aviation sector that has occurred over the past decade, especially in Europe, has often come at the expense of the symbolic benefits flag carriers provide to a nation's sense of identity. EU Member States have begun making this sacrifice by privatizing, and in some cases shuttering, their national airlines in their pursuit of an EU single market. Though these measures may be most painful for nations that have only recently established an independent identity, such as the States comprising the former Yugoslavia, some form of market integration is financially necessary according to Ulrich Schulte-Strathaus, head of the Association of European Airlines (AEA). Schulte-Strathaus recommends that Slovenia's Adria Airways, Croatia Airways, Montenegro Airlines, and Serbia's JAT Airways look for ways to cooperate to reduce costs and fend off competition from low-cost carriers. See Struggling Airlines of Former Yugoslavia Urged to Boost Cooperation, Associated Press, May 2, 2012 (available here). Though Slovenia is the only one of the four States presently in the EU, no State in the region is immune from the market dynamics driving consolidation in the aviation sector. Representatives of the four carriers appear aware of this reality as they will meet later this month to discuss the potential for fleet sharing, exchanging aircraft, and joint maintenance facilities, among other ideas.
May 2, 2012
A4A Files Comments on Proposed Changes to Pilot Qualification Rules
Airlines for America (A4A), the primary trade organization for U.S. carriers, has filed comments in response to the FAA Notice of Proposed Rulemaking, issued on Feb. 29, 2012, which would alter the requirements for pilot certification. The FAA's proposed rule would require first officers hold an Airline Transport Pilot certificate, currently only required for pilots in command. A4A warns that the 1,500 flight hours required to obtain the certificate could result in a shortage of certified pilots. A4A recommends the FAA establish a separate certificate for first officers that takes into account the quality of a pilot's training and experience without relying on a minimum flight hour threshold. In its comments, A4A also recommends the FAA form an aviation rulemaking committee to consider the adoption of a Multicrew Pilot Licensing Program. The A4A's full comments are available here. The commenting period ended April 30.
May 1, 2012
Etihad Acquires Stake in Aer Lingus
Etihad Airways has purchased a 2.987% stake in Irish carrier Aer Lingus. See Alex Delmar-Morgan, Etihad Buys Aer Lingus Stake, Wall St. J., May 1, 2012 (available here). This move demonstrates Etihad's continued interest in European carriers, following its investment in Air Berlin last December. The purchase increases speculation that Etihad could be a buyer for the Irish government's 25% Aer Lingus stake.
April 30, 2012
New 'Home Base' Rule Glimpse Into Future of Global Aviation?
Recently the European Parliament adopted new rules granting pilots and cabin crew access to social security rights in their "home base" State, as opposed to the State out of which the carrier operates. See Press Release, European Parliament, Better Social Protection for Airline Staff and Cross-Border Workers, April 18, 2012 (available here). The "home base" is defined as the State where pilots and crew "normally start and end a duty period" and "where the operator is not responsible for the accommodation of the crew member." The measure was intended to improve the functioning of the European single aviation market by ensuring that all airline employees working out of the same airport will be paying into and benefiting from the same social security system. Some low-cost carriers, Ryanair in particular, were known for subjecting foreign employees to the labor laws and social security systems of the State where the carrier's business operations, rather than the employee, was located. See Charlie Taylor, MEPs Vote on Social Security, Irish Times, April 18, 2012 (available here). Labor concerns about work rules have been a significant political impediment to the elimination of foreign ownership rules and the creation of truly global airlines. The impact of this new "home base" rule over the next few years will be worth studying to determine its attractiveness as a possible solution to labor's concerns.