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Airlines can recover by recognising the most valuable resources

The post Airlines can recover by recognising the most valuable resources appeared first on TD (Travel Daily Media) Travel Daily.

The COVID-19 pandemic has had a significant impact on the aviation industry. For an industry that is prone to shocks and crises (financial crash, SARS, 9/11), the COVID-19 crisis is unprecedented in scale, depth, and scope, posing new challenges.

The path to the industry’s optimal recovery necessitates the active participation and coordination of all stakeholders. The road to an optimal recovery of the industry requires all stakeholders to be actively engaged and coordinated at all levels, from the individual worker/passenger to the International Civil Aviation Organization (ICAO). The immediate concerns about health and safety, as well as job creation, provide the foundation for charting a more sustainable future and ensuring that public interventions and resources are focused on producing public goods rather than simply a prop for shareholder value.

It hardly needs to be stated how severe the consequences have been, but the industry in 2020 experienced a 50% decrease in the number of seats offered by airlines; a 60% decrease in the number of passengers (a 60% decrease); and a $371 billion decrease in gross passenger operating revenues of airlines compared to 2019.

Many of the issues that airline workers face today have been exaggerated by the COVID-19 pandemic, rather than caused by it, such as industry fragmentation, subcontracting and outsourcing of labour, and the resulting increase in precarious work. Many workers have lost their jobs because of the crisis, with no compensation for being laid off, regardless of how long they have worked for the airport, airline, or industry.

While the global focus on airline carriers has largely been ignored by the wider sector, and it is too early to determine whether as travel becomes standardised, how many independent service providers are able to reboot.

The crisis also offers room for reimagining aviation and tackling the many issues raised by decades of over-liberalization and deregulation.

The ITF emphasises that a comprehensive global ‘new deal’ is needed for aviation. It is important that a new agreement is reached.

The basis for relief, rehabilitation and reform is the participation and use of the strengths of all industry stakeholders at all levels:

  • Develop commonly recognised standards and processes at world level for safe passenger travel in a new environment and safe work. The ICAO COVID-19      Aviation Recovery Task Force (CART), the International Airports Council Airport Health Accreditation (AHA) and tools, such as the IATA Travel Pass, show a growing consensus for an integrated approach on global initiatives.
  • Ensure that state interventions at the national level are strategic and industrially focused
  • At airport level ensure that all service providers and employees work to establish, monitor and implement new and essential healthy airport rules and protocols to restore a healthy airport •
  • To work through the unavoidable restructuring at corporate level through social dialogue, through collective bargaining.

In recognition of the importance of global policies and regulations, this article will focus on the national and sub-national dimensions to underline current limitations on responses.

To date, the state financial assistance to the industry is patchy, limited to a small number of countries and, in many cases, targeting key carriers. Countries have a wide range of interventions and Singapore, and the US offer their aviation industry and workers the most comprehensive and tailor-made relief. Union lobbying by decision-makers ensured that an enforcement package was extended beyond airline carriers to independent service providers in ground and airline catering, covering the US Coronavirus Aid, Relief and Economic Security (CARES) Act.

In many other countries, the Unions believe their governments have not sufficiently taken on this challenge and have not developed a national aviation relief plan; in Australia, Canada and the United Kingdom, the Air Trade Unions’ palpable disappointment over the lack of government interventions during that crisis is a huge sector which drives growth elsewhere.

Although state intervention is both necessary and commendable, to date many state support packages have not acknowledged the profound shock and crisis facing the aviation industry, let alone addressed it. Relief packages must also focus on protecting employees in order to prevent the industry from haemorrhaging more jobs before recovery begins. As the industry recovers, labour supplies will become a key challenge.

Airline Catering, Airline Catering, Maintenance and Repair (MRO); Ground Management; Airport Operators; Air Traffic Control (ATC) – plus Government Services – will allow for a more evenly effective, long-term response to the crisis that shares the burden and cost of this to promote recovery.

Most employers (independent providers of services) are simply below radar levels and will end up working during that crisis, in many cases, hundreds of thousands of employees receive little or no compensation for loss of livelihood – often under very precarious conditions. Workers who work directly at an airport or an airline have securer employment contracts, but it is not easy to find good practice pockets.

The lack of a coordinated response can be demonstrated in Thailand, for example. The government of Thailand has tried to force the national carrier to privatise. This, on the other hand, caused the TG Union to disband and the entire workforce was thus left without union representation at the same moment precisely that workers were in greatest need of their union. It is possible that before this pandemic comes to an end the Thai government is reversing its decision to privatise Thai Airways.

The two UK flagship companies, London Heathrow Airport (LHR) and British Airways (BA), both unilaterally took employer measures and sought to ‘fire’ and then ‘rehire’ in lower contracts the very same workers, circumventing normal business relations practise. Qantas also used a pandemic in Australia in order to operate plans to subcontract its land management activities.

These companies effectively decided to throw their employees in a proverbial bus or hold their proverbial weapon to their minds to accept lower terms and conditions. This forces syndicates to respond, threatening industrial peace, maintaining industrial links and alienating workers4.

The government’s ‘job retention’ schemes to support furlough costs and wages received all such companies in Great Britain and Australia.

State agencies have a more intervening role to play in developing a coherent crisis management plan, sharing costs across the industry and planning support until recovery. Without conditions attached to the production of public goods, the public money should not go to companies.

Alternatively, aviation can be free of charge. The total price multiplied across fragmented industries for these sub-optimal decisions will prevent an efficient recovery and leave the industry even less resistant than it is now.

State initiatives should now concentrate on helping the industry to recover and build further resilience. Our collaborative response to this issue will shape and mould the future of the airline industry.

The state and ‘quasi-state entities (such as airport authorities) play a critical role in convening collective spaces to bargain and negotiate a coherent path out of the crisis in which costs and benefits are shared across the industry. State intervention can provide more than just short-term relief and/or public ownership; it can also provide the necessary leadership and space to provide collectively agreed solutions in a highly fragmented industry.

The post Airlines can recover by recognising the most valuable resources appeared first on Travel Daily.

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