I can think of only two industries that have provided the greatest stimulus to globalisation. One is the Internet and the other is aviation. Aviation has shrunk distances in a physical sense, while the Internet has done the same in virtual reality. However, the aviation industry, and especially the airlines sector, remains highly vulnerable to misuse, disaster and catastrophic events. Aircraft are used by hijackers for protests and blackmail purposes. They have also been used as a weapon when crashed into buildings. Airlines are impacted by health issues like Swine flu, and the latest addition in their woes is the volcanic ash coming from Iceland and disrupting the whole of Western Europe and in turn disrupting the rest of the world.
While no clear estimate is available, according to guesstimates the impact of the six-day stoppage of flights in Europe has cost the aviation industry over $1 billion. Post the 9/11 attacks in New York in 2001, the entire US airspace was blocked for civil flights for 3 days and the damage to the industry was not as much as we are seeing now.
Aviation has become the chief means of transport in today?s world. It carries over 1.5 billion international passengers annually and 40% of the world?s cargo in value terms. Domestic flights count for as much, if not more. There is tremendous growth potential in this sector when the world economy is doing well, but there is a deep decline when the world economy goes down. The recent world recession in 2007-09 caused many airlines to go bankrupt and most went into the red.
An industry so critical to globalisation is still so vulnerable. In 1929, when the airline industry was just emerging, an international conference was held in Warsaw to provide support to this industry. While at that time there was nothing like the fear of security that we feel today, issues of safety and liability due to accidents were of concern. The Warsaw Convention capped the liability of airlines to give them protection and allow them the growth the world economy needed 81 years later. While the industry has become a major player in the world economy, we are again in the same predicament of how to save this industry from the vagaries of nature and unscrupulous elements.
In the current scenario of volcanic ash from the Icelandic eruption, International Air Transport Association (IATA) criticised Europe?s decision to close airspace based on theoretical modelling of the ash cloud. ?This means that governments have not taken their responsibility to make clear decisions based on facts. Instead, it has been the air navigation service providers who announced that they would not provide service. And these decisions have been taken without adequately consulting the airlines. This is not an acceptable system, particularly when the consequences for safety and the economy are so large,? said Giovanni Bisignani, director general of IATA.
Bisignani also added that safety is a top priority and airlines will not fly if it is not safe.
After consulting with IATA?s member airlines that normally operate in the affected airspace, he said they report missed opportunities to fly safely because the European system results in blanket closures of airspace. ?I challenge governments to agree on ways to flexibly reopen airspace. Risk assessments should be able to help us reopen certain corridors, if not entire airspaces,? said Bisignani.
In order to provide assistance to the European governments in assessing risk, airlines have conducted successful test flights in several European countries. The airlines are equally bothered about safety since any accident will result in major court cases. However, the outcomes of their experiments have not shown any irregularities or safety issues. Airlines are also exploring various other operational measures to maintain safe operations. These include day flights, restrictions to specific flight corridors, special climb and descent procedures and more frequent detailed baroscopic engine inspections to detect damage.
The scale of airspace closures currently seen in Europe is unprecedented. ?We have seen volcanic activity in many parts of the world but rarely has it resulted in airspace closures?and never at this scale. When Mount St Helens erupted in the US in 1980, we did not see large-scale disruptions, because the decision to open or close airspace was risk managed with no compromise on safety,? said Bisignani, who urged Eurocontrol to establish a volcano contingency centre capable of making coordinated decisions.
All said and done, we need a publicly acceptable solution to global issues faced by the aviation industry every now and then. In the recent global financial crisis, it was ultimately a government bailout that saved the situation. The banks and the world economy are now coming back into some shape. At the time of 9/11, it was the International Civil Aviation Organisation (ICAO) that took the initiative, called all its member states and introduced new regulations for security audits and gave assurance to the insurance industry to return to the aviation sector. Similarly, there is a need for ICAO and service associations like IATA and Airports Council International (ACI) to get together and find ways to provide a method of bringing stability to the aviation industry, ensuring that the high volatility that endangers the industry is not allowed to continue. While we cannot rule out another catastrophic event that could potentially impact the aviation industry, it is the preparedness of the industry to absorb and bounce back that is important. This could be in many forms, but one that is most acceptable is for the industry to have its own stabilisation fund in order to meet a future eventuality.
The author is the chairman of the International Foundation of Aviation, Aerospace and Development (India chapter). He can be contacted at sanat_kaul@hotmail.com