BACK TO HOME PAGE

EUROPEAN REVIEW

ISSUE 17 - Page 3

Air crisis forces subsidy shift in US & EU

THE EVENTS OF SEPTEMBER 11th , coming as they did during an already difficult period for the airline industry, have had effects bordering on the disastrous for companies on both sides of the Atlantic. The most high profile cases are those of Sabena and Swissair, the Belgian and Swiss 'flag-carriers' respectively, which were both near bankruptcy and at least part of which appear to be saved by their governments at the time of writing. Possibly less well known are the demise of Gill airways,a small British airline and Canada 3000, Canada's second largest operator. On the job front even bigger repercussions have been felt among big companies whose future is not in doubt but who have responded to the crisis by laying off workers and cutting routes.

British Airways added 5,200 job cuts to 1,800 already announced. It is withdrawing 20 aircraft and cutting its schedule by 10%. On the continent Alitalia reduced its head count by 2,500, said it was selling or mothballing 12 planes including four jumbos and stopped all new plane orders while Iberia is cutting			3,000 jobs after earlier announcing an 11% reduction in flights and an €8 surcharge on all passengers. In the USA Continental cut 12,000 staff, reduced its schedule by 20% and postponed the flotation of its ExpressJet unit as Delta slashed 13,000 jobs and trimmed capacity by15%, saying it had lost
	Flag carriers: a thing of the past ?

$1billion in the two weeks following the attacks.The big question of how governments would deal with airlines' requests for subsidy was answered in the US when the Bush administration announced $15 billion of help for the industry within weeks of September 11th. Interestingly the European Commission appeared much less forthcoming with Commissioner de Palacio (Transport) wanting to give only minimal financial support for the immediate crisis but warning that national flag-carriers were a thing of the past. In a debate in the European Parliament on 15th November Commissioner Diamantopoulou (Employment) stressed that it would not help airlines if they were given massive injections of funding which then allowed them to slow down the restructuring process. However the Commission was looking at ways to compensate the airlines for the business lost in the US in the four days following 11 September. Most MEPs seemed to agree with her but Brian Simpson of the Socialist group accused the Council of 'fiddling' while the aviation industry burned.

ETUC disappointed at Doha World Trade deal but praises EU

THE RECENT NEGOTIATIONS AT the World Trade Organisation's (WTO) meeting in Doha did nothing to calm the fears of trade unionists in the developed world that globalisation threatens to undercut their jobs whilst continuing unacceptable conditions for Third World workers. Before the meeting the European Trade Union Confederation (ETUC) had urged the EU delegation to force labour standards on to the agenda. The International Confederation of Free Trade Unionists (ICFTU) called a 'globalisation day' on December 9th to call for it to be used in a positive way 'Unions round the world are calling for globalisation underpinned by solidarity and justice, rather than globalisation where trade undermines the values and living conditions of workers' said the TUC's Brendan Barber.

In July the European Commission adopted a strategy of action to promote core labour standards throughout the world. The methods to be used included beefing up the 'social incentive' which gives access to the European market to favour those developing countries which adopt labour standards, working with the International Labour Organisation (ILO) which passed a 'Declaration on Fundamental Principles and Rights at Work' in 1998, and the WTO. Commissioners Lamy and Diamantopoulou said 'We should rebalance the system to help promote social development and ensure that globalisation benefits all people and all countries'. At the Doha meeting the EU attempted to put these principles into action but found itself isolated. With the change of government in the USA enthusiasm for labour rights had considerably diminished while many developing nations saw it as a means of barring their goods from world markets. In the end labour standards quietly slipped down the agenda and deals on the environment, agriculture and competition took precedence.

Bill Jordan, general secretary of the ICFTU and the silent protest that replaced the violent clashes of Genoa

'This is a recipe for disaster' commented Bill Jordan, ICFTU general secretary and warned that the 140 million workers represented by the ICFTU would align themselves totally with the anti-globalisation movement. Emilio Gabaglio for the ETUC issued a statement that deeply regretted the failure of negotiations but recognised 'that the Commission fought until the final moments to try to get a stronger text on core labour standards'. 'The respect of core labour standards is not an issue that is going to go away, ...the very minimum that the ETUC could accept is that the WTO agrees to play an active role in the World Commission on the social dimensions of globalisation which the ILO is establishing. We urge the EU to give a lead on this' concluded Gabaglio.

Back to	Forward to	Up to
FRONT PAGE	NEXT PAGE	TOP OF THIS PAGE