Competing Sense
& Sensibility

     A recent study from Handelsblatt Research Institute titled “Factors of Competitiveness for the International Air Transport Sector” appeared as a coordinated effort to present a unified front. It came with the endorsement of most major German transport companies.
     Taken at arms length, “Factors of Competitiveness” might have been a comprehensive state of the industry report with an unbiased view on the shortcomings and strengths of the industry in Germany.
     But rather than breaking new ground, the report actually rehashes and repeats some well-worn charges and counter charges detailing the difficulties German transport faces today while operating in an open, free market.

Tell Us Something We Don’t Know

     “Competitiveness” gets right down to the business of waving the flag at onset, as the report reminds that a “competitive and effective air transport sector is a prerequisite for an export-oriented economy such as Germany and a strategically important local factor.”
     No one will disagree with that statement, although one doesn’t need to be a rocket scientist to come to this conclusion.
     No surprise either, as the well-worn charge resurfaces—albeit now as a chorus—in this stakeholders report that German transport players are burdened by “unfair competition from Asian and Middle Eastern operators.”
     Emirates, Etihad, and Qatar are enjoined in “Competitiveness’” together with the booming Turkish Airlines, as competitors who receive the main share of blame for the trials and tribulations of German transport.

A Closer Look

     Nowhere in this report is it discussed that the rights enjoyed by international carriers in Germany to land and do business are a homemade condition driven by overregulation in some sectors and total lack of regulation in others.
     Also overlooked and not covered at all in this report are the ongoing and apparently unresolved issues with the 800-pound gorilla in the form of German Labor unions—which incidentally came to the center of aviation earlier in April, as VERDI, one of the largest German organized labor groups representing the service sector (thus including many of the airport ground support personnel such as baggage handlers, check-in staff, and mechanics), went on strike—shut down the seven largest German airports that brought operations at FRA, almost to a standstill.
     The work stoppage then was just the latest chapter in an ongoing dispute that threatens to interrupt transport in and out and across Germany in the months and years ahead, time and time again.
     For example, on February 21st the security screeners performed a strike, stranding over 13,000 passengers in Frankfurt alone.
     Lufthansa management reasons that a German flag carrier is indispensable for the German economy and that a German banker should not have to hub in CDG, LHR, SPL, or BRU.
     But today the hard numbers say that a considerable number of frequent travelers are avoiding German airlines (and German airports altogether, when possible) for fear of getting stranded.
     In addition, the air passenger tax, levied by the German government on all tickets originating in Germany, has driven a considerable number of passengers to French, Swiss, Dutch, and Czech gateways as well.
     But the unions in Germany with the right to strike are at the bidding of their rank and file, who see the average employee from examples such as Emirates, Etihad, and Qatar—as well as those working for dnata and other middle Eastern ground handling firms—as better paid than the largely subcontracted ground support staff at German airports.
     Perhaps even worse is a widely held perception here that in terms of qualification, training, and professional development, these “foreign flag” carriers have taken the lead.

Reverse Slap Shot From Turkish

     Germany can also look at booming Turkish Airways, which owes some portion of its success to the unwillingness of “big brother,” the EC, to admit Turkey—one of the few dynamic economies with a young and well educated workforce—as a full member.
     Turkey frozen out as a member of the EC means, for example, that Turkish Airways can operate without needing to adhere to the draconian ETS rules and other EC edicts whose merit must be called into question.
     Of course, this is just one factor of many. Another factor is the night curfews (Germany’s largest airport, FRA, cannot operate between 11pm and 5am), which cannot support salaries that, though high when compared to those in Asia, can barely provide for a family in Germany.
     German weekly DER SPIEGEL quoted a VERDI union worker as saying: “With 1,600 Euros (2,200 US$) net and two kids, I can’t fly anywhere anyway.”
     We all hope for better.
Jens