Liberalisation of traffic rights would be benefi cial to the whole air freight industry, as well as the countries who implement it, said Ulrich Ogiermann, CEO of Cargolux, opening a session on “The Magic of AirFreight Liberalisation”.
“We think it is a job creator, and creates economic value,” he added, noting that as air cargo was now an integrated part of global manufacturing processes and an essential enabler for e-commerce, there would be less economic growth without it.
“The magic of air freight is that the rest of the world is next door,” he told delegates. “Air cargo has made the world fl at.”
Adding to this economic argument for liberalisation of air cargo traffi c rights was the simple fact that cargo did not make a round trip, unlike passengers. The only way to cope with this, Ogiermann suggested, was to use fi fth, sixth or seventh freedomtraffi c rights.
He highlighted what he described as the “bizarre contradiction” that ocean freight was quite open, with shipping lines able to operate on whatever routes they wished, while air cargo, which only uplifted two per cent of global freight tonnage,was subject to restrictions.
“A shipping line can sail from Yokohama to Los Angeles if they wish, but as a foreign carrier we are not allowed to do something similar. That does not make sense,” he said.
Even where rights were available, new routes often had to be approved by the government, while new bilateral negotiations took years and were often dominated by passenger considerations. “That is not compatible with the trading requirements of countries or the needs of cargocarriers,” Ogiermann said.
Ownership of airlines was also highly regulated, while on shipping there is no restrictions, with open registry shipping lines accounting for some 45per cent of global tonnage.
All of this was due to the Chicago Convention of 1944, which was conceived in a different age – a time of undifferentiated products, limited scale economies and limited resources, which made developing one scheduled operator per country seem likea good idea.
“But these principles are now out of date and out of time,” Ogiermann told delegates. “We now live in a different world. The bilateral system is threatening to suffocate the industry it was once designed to protect.”
Given this, why were countries so reluctant “to kiss the ugly frog of liberalisation”? The answer, he suggested, was that countries feared that rapid change might cause social unrest. The solution to this was gradual change. Ogiermann pointed to the considerable progress that had been made on a regional basis, starting with the liberalisation of the US domestic market in the early 1970s, open skies deals from the US in the early 1990s, the liberalisation of the intra- European Union market in 1997, and other regional deals in various parts of the world.
The next steps should be at the very least unlimited third and fourth freedoms, and as much access to fi fth and seventh freedoms for cargo as possible. Air cargo bilaterals should also be separated from passenger ones, with the ultimate goal of putting it on the same footing as shipping.