Think Tank VI Ethical Issues in Collaboration in the Aviation Industry

1
Think Tank VIEthical Issues in Collaboration in
the Aviation Industry

• Ravi Ravinder
• School of Leisure Sport and Tourism
• University of Technology Sydney

2
Background

• Ethics at the molar level (Solomon, 1993)
• Internal management practices
• External (market-related)
• cartels,
• abuses of a dominant position,
• abuse of buying power and/or attempts to
  monopolize,
• anti-competitive mergers and acquisitions
  (Souty, 2005)

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An Ethics-based perspective

• Going beyond disciplinary perspectives
• value-full rather than value-free science
  (Macbeth, 2005)
• Existing paradigms imply a power imbalance
• Needs to be proactive rather than reactive
• More focus on contemporary life, rather than
  nostalgia

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A Telos

• Not just what is right or wrong
• But what will it achieve?
• And for whom?
• customers, employees, owners, suppliers,
  competitors and communities
• Telos proposed for hotels, sustainable tourism
  and hotels
• Aviation?
• Tribe, 2002, Jamal, 2004

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A Proposed Telosfor Aviation (1)

• Sufficient, rather than maximum profitability,
  which benefits shareholders, their employees, and
  suppliers and reinforces the firms long-term
  sustainability ,
• Provision of safe, efficient and comfortable
  transport services, (This principle is currently
  being well-served within the aviation industry),

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A Proposed Telosfor Aviation (2)

• Governments intervention in aviation matters to
  be dictated by its electoral mandate and defined
  set of principles (derived from this mandate,
  rather than ideology), only safety and security
  is truly in the national interest in a
  liberalized market,
• Provision of the critical link facilitating
  tourism flows between an origin and a
  destination, thereby offering consumer choice at
  the origin, and enhancing tourism-specific
  economic activity and employment at both ends

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Discussion

• Three subsets of collaborative networks
• Between airlines and airports,
• Between governments in Bilateral Air Service
  Agreements, and
• Between two or more airlines in bilateral or
  multi-lateral alliances.

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Airlines and Airports

• Both are large, a capital-intensive, large
  employers and crucial to tourism flows
• Both only recently privatised
• Issues
• Preferential Deals
• Airlines capital in airport devpt
• Airport access to airline competitors
• Low-cost terminals
• Local community involvement

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Bilateral Air Service Agreements

• Negotiated by govts, but airlines are active
  lobbyists
• Inherently anti-competitive
• But govts are equally hypocritical about it
• The cases
• Trans-Atlantic
• Trans-Pacific (Australia USA)
• Australia inbound
• Effects

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Airline Alliances (1)

• Types of Alliances
• Single route
• Across Network
• Sharing Resources
• Multi-airline alliances
• Partial Equity involvement
• Mergers, takeovers

• Rationale
• Cost-benefit v Customer Demand
• Economies of Scale, Density, Scope
• Distribution,
• Promotion
• Branding

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Airline Alliances (2)

• Effects
• Alliances a necessity?
• For individual airlines
• For communities / stakeholders
• Acceptable market behaviour
• No major ethical issues except for
• Foreign ownership
• Existing regulation is working?

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A Proposed Telosfor Aviation

• Sufficient, rather than maximum profitability,
  which benefits shareholders, their employees, and
  suppliers and reinforces the firms long-term
  sustainability ,
• Provision of safe, efficient and comfortable
  transport services, (This principle is currently
  being well-served within the aviation industry),
• Governments intervention in aviation matters to
  be dictated by its electoral mandate and defined
  set of principles (derived from this mandate,
  rather than ideology), only safety and security
  is truly in the national interest in a
  liberalized market,
• Provision of the critical link facilitating
  tourism flows between an origin and a
  destination, thereby offering consumer choice at
  the origin, and enhancing tourism-specific
  economic activity and employment at both ends

13
Thank you

• Gracias