| by Dr. Ruwantissa Abeyratne
( December 5, 2012, Montreal, Sri Lanka Guardian) In 1996, pursuant to an initiative by the International Civil Aviation Organization, which was robustly assisted by the Canadian Government, the United Nations General Assembly, by resolution officially recognized 7 December as International Civil Aviation Day and listed it as an official UN day. The purpose of the global celebration is to generate and reinforce worldwide awareness of the importance of international civil aviation in the social and economic development of States, and of the role of ICAO in promoting the safety, efficiency and regularity of international air transport. Each year on this day, ICAO celebrates this global dedication with a theme. In 2012 the ICAO theme is “Aviation – Your Reliable Connection to the World”.
More importantly, in December this year, Sri Lanka would be celebrating a hundred years of aviation in Sri Lanka. This date has been assured its place in posterity with a wonderful book written just for the occasion by the talented Captain Elmo Jayawardene: “A Centenery Sky – 100 Years of Aviation in Sri Lanka. In its back cover, I wrote the following:
“Nine years after Orville Wright achieved the first powered, controlled, sustained and piloted flight on 17 December 1903, the people of Ceylon watched the first wings take flight over the country’s verdant landscape. Not many who witnessed the birth of the country’s aviation sector could have imagined that it would grow to the robust heights it has reached today. The conquest of the skies achieved in 1912 and the one hundred years that followed tell a story filled with passion, courage and sacrifice. Aviation not only changed our life but also inspired a legacy of abiding connectivity within our beautiful land and beyond. It is only a seasoned aviator who has experienced flight from the front with dedication and love for the industry who can tell that story. In A Centenary Sky Captain Elmo Jayawardane takes us through an incredible journey of hope and achievement with the enduring message that it is not the destination, but the journey that counts”.
Yes, indeed, it is not the destination, but the journey that counts. This is precisely why we have to think of the years ahead for aviation in Sri Lanka. With such a long heritage of flight and a distinguished record of safety, Sri Lanka remains highly respected within the aviation community. However, it is time we took stock of where we are headed, for the following reasons.
No matter how much we place emphasis on safety and security in aviation, which indeed we must, we cannot forget that in the end there is only one product – the air transport product – without which there would be no need to talk of safety and security.
Therefore, the fundamental principle for air transport would be aeronomics and how we administer the sky. Let us start at the very beginning. What is aviation’s strategic direction? As far back as 1944, the world, represented then by 52 signatory States to a multilateral treaty called the Chicago Convention – which now has 191 States acceding to it – called aviation’s strategic direction “creating and preserving friendship and understanding among the nations and people of the world”. One would not imagine, for a moment, that there is written anywhere in a global document that aviation’s strategic direction is to make as much money as possible to the exclusion of others or to give priority to the interests of States or the air transport industry. Creating and preserving friendship and understanding among people can only be achieved through optimum connectivity.
I have said this before: The trouble with air transport is that, while on the one hand it is a product, on the other hand regulations pertaining to this product may constrain its availability to the consumer by depriving him of the various choices of air travel he might have under a liberalized system. In other words, State policy and the protection of national interests take precedence over the interest of the user of air transport. The aviation industry offers only one product to the ultimate consumer and that is the air transport product.
“Connectivity” which is the most compelling need in aviation, and embodied in the Chicago Convention as inter alia “meeting the needs of the people of the world for efficient and economical air transport” is stultified by interests of commercial and national policy. Let me give just one example where this insurmountable obstacle has been overcome.
When Emirates commenced its operations to Australia in 1997, the airline was viewed with trepidation and concern by QANTAS, as a threat to its market share. This concern was shared by the Australian authorities. However, attitudes quickly changed, and this concern was obviated when they realized the added economic benefit quickly enjoyed by the places Emirates flew to. Currently, Emirates operates 49 flights a week to Australian cities and hopes to expand this number to 80. QANTAS and Emirates are now partners and that…is the way to go.
I might also add that the air services agreement between the UAE and the United States allows Emirates to operate to any point in the States, how often they wish with no capacity restriction, and with rights to carry traffic from intermediate points.
Air transport does not have a smooth trading passage. In 2009 IATA summed up the predicament of the air transport industry succinctly when it says of the past.
“A hyper-fragmented global industry was struggling for its survival. National flags were originally put on the tail to protect the airlines. That was an age of regulated travel for the rich. Today we are an industry that moves over 40 million tonnes of cargo and 2.2 billion people annually. Our activities support 32 million jobs and US$3.5 trillion in economic activity. The rules set to protect this industry do not work in today’s environment. Even in good economic times, the industry has not covered its cost of capital. Restrictions on ownership and market access have prevented airlines from growing into strong global businesses.
The latest crisis is yet another reminder that there is no policy purpose in keeping the industry financially weak with out-dated restrictions”.
One could well argue that the trouble with air transport has been that it has always been about State policy and interests of States and not about the rights of the consumer. Restrictions on Foreign direct investment (FDI) through rigid ownership and control policy further strengthen this approach. FDI promotes economic growth and facilitates competition.
Caps on FDI serve to obviate the need for governments to invest, particularly when they have to protect ownership and control of nationals in designated airlines. This is counter-intuitive as there will not be ownership and control for governments to protect if the airlines go bankrupt for want of capital.
Under the circumstances, and looking ahead, an airline cannot be run on a commercial basis while being fettered by total State control. This applies more so to an airline that runs 22 aircraft and tries to compete with behemoths such as Emirates, Etihad and even Qatar Airlines which has more than a hundred aircraft.
Peter Harbison, Executive Chairman of CAPA Centre for Aviation based in Sydney said, “As the Gulf carriers have progressively disturbed the global airline equilibrium over recent years, 2012 has seen a rapid escalation of this process. None has been more distinctive and mould-changing than Etihad, under the leadership of James Hogan”.
Emirates has been named CAPA Airline of the Year (2012) for the third time. Harbison went on to say: “Emirates has formulated a comprehensive model which has become a game changer, most notably in 2012 as its network density has gone to a new level. Its strategic leadership in air services liberalisation, despite reaction in some markets, has helped transform traffic flows, contributing to enormous strategic change in the industry. All the while, Emirates has continued to be profitable in face of difficult market conditions”.
With such rapid winds sweeping through the commercial aviation world, what should Sri Lanka do? We should take an example from the visionary thoughts of the President of Sri Lanka which he put forward at the launch of the space age of Sri Lanka when Supreme SAT-1 was launched into orbit. The President said in his message: “The launch of this satellite will be the beginning of more such ventures that will help promote Foreign Direct Investment, increase export earnings to the country, and help greatly in the transfer of technology within and outside this Region”.
I can see no reason why this same proactive approach cannot be adopted in the context of commercial aviation in Sri Lanka and its national carrier!!