Antwerp 1998: 8th World Conference on Transport Research

By Guillaume Burghouwt

Nowadays, deregulation of air transport is a hot item. A lot of discussion has risen about the results of the American ‘Airline Deregulation Act’ of 1978 and similar liberalising policies in Canada, Australia and New Zealand. Some are speaking about the failure of airline deregulation, others measure the process as a positive experience.

Recently, the European Union has become member of the ‘open skies’-family. In three ‘packages’ of liberalisation measures in 1987, 1990 and 1992, the restrictions on the European air transport market were gradually fased out. In April 1997, the last barriers to competition were lifted. No more fixed prices, no more capacity agreements and designation restrictions would hinder airlines to enter routemarkets. The results of the liberalisation process are already visible. There are some new start-up-carriers creating price competition. There is more alliance-activity. ‘Peanut airlines’ like EasyJet and Virgin Express are emerging.
But whereas a huge amount of literature exists about the effects of deregulation policies in Canada, Australia and especially the United States, most of the discussion about the results of liberalising Europe has been limited to prospects about the possible impacts of the ‘packages’ compared to the US. Only a few detailed and available empirical studies have been published recently (e.g. Civil Aviation Authority (1998), The single European aviation market: the first five years; Commission of the European Communities (1996), Impact of the third package of air transport liberalisation measures).

So I was delighted when my supervisor at the university gave me the permission to visit the ‘8th World Conference on Transport Research’ to find out about the latest facts on Europe’s aviation market. It would possibly help doing my final thesis about the effects of European deregulation.

The 12th of July, I went to Antwerp where the Conference would be held. The WCTR is one of world’s most important conferences on transport research and is being held every three years. It intends to provide an overview of the latest developments in research on a wide range of transport topics. Besides, the Conference offers the host-city an opportunity for city and region marketing. So I was regaled with the taste of a lot of excellent Flemish beers, a nightly visit to the flamingo-quarter in the Antwerp Zoo and a interesting tour through the port of Antwerp.

More then thousand participants from all over the world attended this 8th WCTR in Antwerp. A similar number of papers were presented in 44 topic areas. One of the topic areas was the special-interest group ATRG. ATRG stands for Air Transport Research Group and is headed by the well-known Tae Oum from the University of British Columbia. About 50 papers on aviation-related topics were presented during five congress-days by quite famous names like Kenneth Button and William Swann. Some interesting things were put in advance during the ATRG-sessions.

Firstly, deregulation remains one of the most important subjects in aviation research but the crisis in Asia is now making a mess of things. It is not clear at the moment which kind of effect the crisis is going to have on the process of liberalisation of the bilaterals between, e.g., the United States and Malaysia. Will the crisis lead to more protection of the national economies and re-regulation of some liberalised bilateral agreements? Or will the crisis bring high priests of deregulation like the US in a better position in negotiating the liberalisation of bilaterals?

Neither the effects of the crisis on the industry as a whole are entirely clear. The airline industry faces a new kind of problem due to the existence of big regional alliances and global galaxies like Star Alliance and Global Excellence.
Most major airlines are strongly related to one or more airlines on the other side of the world. Economic recessions and other prob-lems can have a serious ef-fect on the alliance-partners. The strike of the Northwest Air-lines’ pilots and the effect on KLM’s results is just an ex-ample of this interrelation-ship between alliance-partners.
Although the Asian (and per-haps Latin-American) crisis might turn out as a disaster for some airlines, the crisis and the emergence of global galaxies and other types of alliances have brought about some fresh items for aviation research.

Secondly, especially in Europe a lack of data on aviation exists. Whereas in the United States every year a ten percent ticket-sample is held, in Europe such a sam-ple doesn’t exist. As a result, research about the effects from liberalisation or other processes on changes in tar-iffs is extremely difficult. Exact, differentiated prices and passenger types per flight aren’t easily available. There-fore, it was not sur-prising that William Swann, professor of economics and working for Boeing, said: ‘It’s going to be difficult for researchers’. He mentioned that the lack of exact data might be one of the factors that have determined the relatively poor results of European liberalisation in respect to the US. In Europe, new entrants aren’t always able to get sufficient market information to form a strat-egy and compete with the incum-bents. In the US such a bar-rier doesn’t exist and entering a market is perhaps less diffi-cult. More market-informa-tion about prices, passenger types and transfer passengers is essential for researcher and might be es-sential for the success of a liberalised Euro-pean air transport market.

Thirdly, the Air Transport Research Group wants to extend its activities and be-come the global organisation for aviation researchers. Re-cently, the ATRG has pub-lished its first two newslet-ters where one can find ref-erences of new publications and an-nouncements of re-gional and world congresses. The news-letter will be pub-lished on a regular basis. ATRG also has the purpose to function as a platform where researchers, policy-makers and managers can contact each other. A next ATRG-congress will be held in Hong-Kong in 1999

ATRG has already made a good start. Three of the avia-tion papers were selected out of 900 papers, to be awarded top paper prizes, by the Con-ference’s Prize Committee. Amongst others, a Dutch paper from Youdi Schipper, Peter Nijkamp and Piet Riet-veld was awarded, called ‘Frequency equilibria and external costs in duopoly airline markets’.

The 8th WCTR has been a useful experience. Not only because of the interesting results and the enrichment of my paper-collection. Maybe even more important was the possibility to get in contact with aviation-people from all over the world. When I was drinking a beer with a Greek and Japanese researcher in the Antwerp Zoo, evaluating the results of the Conference, I thought for a moment of the words from Albert Plesman. He was right: Aviation does connect nations. I am already saving money for Seoul 2001, 9th WCTR.

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