In the Grey
We live in an era of black and white, without a lot of grey. Too often,
perfect is the enemy of good in an all-or-nothing end game, and this applies to
many elements of our lives. This is unfortunate, both in terms of our larger
society and the airline industry, as aviation policy is certainly not immune to
Liberalization. The pursuit of open markets by the relaxing of government
Protectionism. Using government policy to restrict market access.
One policy is black; one is white.
The right path forward for global aviation, however, is actually quite grey.
The problem in Washington, D.C., Ottawa, Brussels, and other capitals around the
world, however, is that there is too often the narrow belief that there is no
room for grey, and one must pick a side. Are you for liberalization or are you
for protectionism? For the Air Line Pilots Association, and for good government
policy, the answer is in the grey.
Liberalization is best manifested through Open Skies and bilateral
agreements, which have greatly benefited both U.S. and Canadian pilots. The
opening of new markets around the world has allowed U.S. and Canadian carriers
to reach new markets and has expanded flying opportunities around the globe.
In some cases, however, liberalization has not worked as intended. Many of
the U.S. Open Skies agreements were negotiated decades ago, using a template
that changes little from country to country. The United Arab Emirates (UAE) Open
Skies agreement was inked when Emirates, now the largest airline in the world by
some measures, was a small, Gulf-focused airline, and Etihad, the
fastest-growing airline in the world, didn’t yet exist. Fueled by pro-aviation
government policies that prioritize airlines as a driver of the broader UAE
economy and, at times, by direct and indirect state subsidies, these state-supported enterprises have massively benefited from liberalization—including a
combined more than two dozen routes to the United States from the Gulf, and now
using Fifth Freedom rights from Europe.
As United CEO Jeff Smisek said recently, “Emirates, the carrier, can fly
anywhere it wants in the United States of America in return for which we can fly
anywhere we want within the emirate of Dubai.” This is a problem for U.S.
carriers and their employees. And while protectionism is not the answer, nor is
the continued blind pursuit of liberalization as government policy. The answer
falls somewhere in the grey in the middle.
Liberalization does not always work for all sides, particularly when the open
market is no longer a free market because one side skews the market with state
subsidies. State-owned enterprises from the Middle East (including Gulf
airlines), Asia, and elsewhere continue to expand at rates only possible given
the support of their home governments. And as they seek to broaden their use of
Fifth Freedom rights to fly to North America not just from their home nations
but also from points in Europe, Asia, and elsewhere, it’s time we revisit select
Open Skies agreements that may no longer be working for U.S. airlines and their
Across the Atlantic, the debate over liberalization versus protectionism has
generated significant attention, in part because of ALPA’s aggressive advocacy
campaign to deny Norwegian Air International’s (NAI) application for a foreign
air carrier permit from the U.S. Department of Transportation. NAI falsely
claims that ALPA is engaging in protectionism by seeking to block its
application and that liberalization should win out at all costs. This is far
In fact, the NAI issue is quite grey and quite complicated. In short, NAI is
the subsidiary of Norwegian Air Shuttle (NAS), an existing European low-cost
airline that is based in Norway. NAS has an existing subsidiary, Norwegian Long
Haul (NLH), also based in Norway, that already has existing service to the
United States using Open Skies. To gain an advantage over its competitors,
however, NAS set up NAI in Ireland to get out from under Norwegian tax,
regulatory, and labor laws to use the more lax laws in Ireland. Irish laws would
allow NAI to use contract crews employed by a Singapore contract firm and base
those crews in Thailand. This is a bastardization of the Open Skies agreement,
in violation of U.S. and international law, and the U.S. DOT should deny NAI.
That isn’t protectionism—it’s the proper enforcement of liberalization laws.
As we move into the next phase of our Save Our Skies (SOS) campaign
(sos.alpa.org), we will be working with our allies to find solutions to these
problems to ensure that liberalization is working for North American pilots.
That isn’t protectionism. We know that opening global markets has been good for
our pilots. Our position is much more nuanced. It’s grey, and with your help, we
will be successful.
August 2014, Air Line Pilot magazine