WORLD ROUTES: Getting 'Smart' About Regulations

The regions had their say on regulation during the final panel discussion at the 20th World Routes Development Forum Strategy Summit in Chicago on Sunday, writes Jonny Williamson for The HUB.

The final discussion at this year’s World Routes Strategy Summit was a fitting close to a day of heated and entertaining debate.  Moderated by professor Brian Havel, director of international aviation law at Chicago’s DePaul University, the passionate chair posed the question will we see smart or so-called ‘stupid’ regulation in the future?

“The low-cost business model has changed the way governments view the aviation industry, seeing the airlines no longer as a partner, but more of a commodity,” Havel declared.  “Government must stop meddling in our business practices, what is needed is a new set of rules to replace the outdated and outmoded regulation that exists today.”

Etihad Airways’ VP for international and public affairs, Vijay Poonoosamy, noted that “as a company, you have to respect and adhere to any laws or regulations, even while you are involved in lobbying for change.”  He cited the scrutiny Etihad is under for its various airline partnerships with the likes of airberlin, Darwin Airline and Alitalia.

Though it is contended that the carrier appears to not just be merely a minatory shareholder, but a controlling party, Poonoosamy is confident that all regulations have been complied with and that will ultimately be the result of the current investigation.

Legal director at Hill Dickinson, Jeremy Robinson, discussed the international controversy and condemnation sparked by the EU’s Emission Trading System (ETS), noting that at the very least, it sparked debate and brought parties to the table to discuss the issue.

President, Center for Aviation Policy and Economics, Sandra Chiu, offered a fascinating glimpse behind the curtain at Chinese aviation policy, traditionally built around three key principles; to catch up with the rest of the world, to protect the main state-owned carriers (Air China, China Southern and China Eastern Airlines) and to make them stronger.

However, following limits having been placed on foreign carriers, capacity, routes, fares and partnership for decades, the winds of changes are finally blowing.  The country’s traffic growth is finally beginning to come from Chinese nationals, rather than foreign, resulting in aviation policy being changes to accommodate a more widespread proliferation of international airlines, especially serving China’s Western region.

In support of that initiative, the Chinese government has also established its own low-cost airlines, allowing minimum fares to be circumvented and lifting the 2007 ban on establishing new airlines in China.  “The Chinese eco-system is totally separate to the rest of the world’s, though the situation is slowing evolving to become more integrated,” Chiu acknowledged.

Anil Srivastava, joint secretary, Indian Ministry of Civil Aviation, concluded: “As an industry, we have failed in the past and we are continuing to fail at the moment, to convey the urgent need for regulatory transparency.  Governments treating their national airlines as cash cows or sacrificial cows, and sometimes both, must change! We need to remove the burdens on the sector and we ask governments to no more, but to do less.”

 An audience poll taken during the discussion revealed that 38 per cent of delegates thought that every decision was too political was the challenge that needs addressing the most. The amount of taxation came second with 25 per cent, closely followed by aviation not being a priority at 19 per cent. Long-term planning and lack of industry understanding had 12 per cent and six per cent, respectively.