Gerber Urges the WTO to Encompass Cargo

Lufthansa Cargo CEO Peter Gerber addressed the World Trade Organization with a fervent appeal to include aviation, in general and air freight matters specifically, in their range of tasks into daily practice on a global level. The WTO stepping in would be the most promising multilateral way to end severe market distortions caused by state aided carriers and ensure a level playing field for all airlines.

LEJ Panelists (l > r): Michael Hoppe, Board of Airline Representatives in Grmany / Peter Gerber, CEO LH Cargo / Matthias von Randow, MD BDL / Markus Kopp, Mitteldeutsche Airport Holding  -  picture hs
LEJ Panelists (l > r): Michael Hoppe, Board of Airline Representatives in Grmany / Peter Gerber, CEO LH Cargo / Matthias von Randow, MD BDL / Markus Kopp, Mitteldeutsche Airport Holding - picture hs

Europe’s cargo carriers have increasingly come under pressure predominantly caused by Gulf competitors and Turkish Airlines. Since 2007 until the present day they have lost 7.7 percent of their global market share, dropping to 24 from 28 percent, while the Gulf carriers' market share leaped an amazing 118 percent in the last 7 years, for a total of 16 percent on a worldwide scale.

Unprecedented growth of capacity
If the cargo activities of state carrier Turkish Airlines are added to these figures the Gulf and Bosporus-based airlines account for over 20 percent of cargo's global market share.
This is not the end of the line in view of the abundant aircraft orders placed by EK, EY, QR and TK at both Boeing and Airbus. Should nothing unexpected happen within the next few years the aforementioned state subsidized players will continue capturing market share piece by piece pushing their European rivals aside.

110 representatives of the air cargo industry attended the Leipzig meeting  - courtesy BDL
110 representatives of the air cargo industry attended the Leipzig meeting - courtesy BDL

Protectionism is an outdated tool 
So, what to do, from the perspective of LH Cargo, AF-KL-Martinair Cargo, SAS Cargo and other Europeans?
National protectionism exercised by individual European states is not the best answer to solve this issue once and for all – this was the consensus among the more than one hundred participants of today's meeting (7 Oct.) of the German air cargo industry held at Leipzig's DHL Express hub.
A smarter and presumably more sustainable approach was presented by Peter Gerber of LH Cargo by bringing the WTO into the game. Gerber reminded the audience that for historical reasons aviation has deliberately never become part of the WTO architecture because this special segment of the transport world was completely state-run in the past. Therefore it didn't make sense to include it in the many duties the international watchdogs were looking for to secure free trade and commerce.

New ballgame
However, since aviation has been liberalized to a great extent during the last 20 years (give or take) the rules of the game have dramatically changed, exclaimed Peter. "What's now needed is a neutral agent enabling a level playing field for all market participants and monitoring the daily practices," urged the manager. In case the WTO rebuffs the approach a similar institution or agent is needed to assume this task, demanded Herr Gerber.
His initiative was strongly supported by Member of Parliament Arno Klare (Social Democrats) who announced tabling this issue in Berlin and Brussels.
On the same note, Managing Director Matthias von Randow (of the German Aviation Association - BDL) one of the organizers at the Leipzig event together with the Association of the German Industry (BDI)  and the German Forwarding Association (DSLV), demanded new international rules in aviation to enable fair competition.
It seems the discussions about how to best ensure equal terms for all players in aviation are finally gathering momentum.

Heiner Siegmund  /  Michael Taweel

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