Air travellers are profoundly disoriented and free market forces may just give them a much better deal with “shock therapy” that might force airlines to give up aggressive competition and monopolies of route structures.
by Ruwantissa Abeyratne
writing from Montreal
it is shock, real or perceived, that starts real change… Milton Friedman
It was Machiavelli who said that all injuries must be piled on top of each other at the same time.
And it was Naomi Klein, a distinguished Canadian author who coined the term “shock doctrine” in her book The Shock Doctrine: The Rise of Disaster Capitalism (Knopf: Canada, 2007). This doctrine is based on the premise that people who are devastated by a disaster and are profoundly disoriented - which Klein calls “Shock Therapy” - look towards rebuilding what they lost whereas free market forces look for exactly the opposite – to start with a clean slate by exploiting the disaster to their advantage. Klein extends this doctrine to political leaders and cites the Tiananmen Square massacre of 1989 as having given the Chinese political leaders the opportunity to convert much of China into a gigantic export zone. A similar line of action is attributed to then Prime Minister Margaret Thatcher of the United Kingdom who is reported to have used the 1982 Falklands War to divert the country’s attention so that she could quell the coal miners’ strike which was happening at the same time.
The politicians cited above may be considered devious and perhaps even clever. But can they also be perceived as self-serving? What about individuals and businesses that have been noticed exploiting a post conflict or post crisis? Examples cited in Naomi Klein’s book are the critical phases of the war in Iraq, where Shell and BP claimed the country’s vast oil resources; the outsourcing of the “war on terror” immediately after the 9/11 attacks to Halliburton and Blackwater; and the auctioning off of beaches that had great potential as tourist attractions to various tourist resorts in Southeast Asia in the post Tsunami period of 2004-2005.
The shock doctrine helps people manipulate and exploit the public’s disorientation immediately after a catastrophe by introducing and establishing questionable economic measures. Also called “disaster capitalism” this trend gives, according to Milton Friedman of the famous Chicago School of Economics, an administration six to nine months in which to achieve major changes, after which time the opportunity may vanish without ever emerging again.
Of course, airlines are in the doldrums and are struggling to survive. They are cutting down services. British Airways is grounding its 31 Boeing 747 “Jumbo” jets (the largest 747 fleet among European countries) and pundits are saying that the 500 strong 747 fleet which served long thin routes might suffer the same fate. Aviation pundits are prognosticating that long flights will be a thing of the past and the “hub and spoke” system where a hub attracted flights from all over and distributed passengers so gathered to all corners of the world on large aircraft will be a thing of the past. Also in the forecast is that business long haul traffic will dwindle to a trickle where mostly visiting friends and relatives will be carried in a few wide body aircraft operating air services. Tourists will prefer to have their vacations in nearby destinations. Airlines with totally different structures and profiles will team up. This might already be happening, which is a good sign: American Airlines – a famous long haul carrier- has teamed up with Jet Blue - a carrier with a different profile - where the partnership will include code-sharing and network cooperation. Joanna Geraghty, Jet Blue’s CEO said: “Pairing JetBlue’s domestic network with American’s international route map creates a new competitive choice in the Northeast, where customers are longing for an alternative to the dominant network carriers. This partnership with American is the next step in our plan to accelerate our coronavirus recovery, get our crewmembers and our aircraft flying again, and fuel JetBlue’s growth into the future.”
American Airlines President Robert Isom said: “This is an incredible opportunity for both of our airlines. American has a strong history in the Northeast, and we are proud to partner with JetBlue as the latest chapter in that long history. Together, we can offer customers an industry-leading product in New York and Boston with more flights and more seats to more cities.”
Air travellers are profoundly disoriented and free market forces may just give them a much better deal with “shock therapy” that might force airlines to give up aggressive competition and monopolies of route structures. Liberalization might just take on its true meaning and purpose of serving the passenger better with equality of opportunity for small as well as large carriers to mesh with a close synergy.
Above all, this might be a good opportunity for the International Civil Aviation Organization (ICAO) – the club of States under the United Nations umbrella – and the International Air Transport Association (IATA) – the trade association of airlines – to get together and come up with a revised interpretation of liberalized routes and air services in the best interests of the travelling public, and one that would effectively preclude economic exploitation of the pandemic crisis by powerful forces for their own benefit. . In the parlous state all airlines are in, there would be no better a time than to muster States and airlines to carve out a win-win situation where both the passenger and traveller wins. Airports Council International (ACI) – the association of airports could form the threesome where it could discuss revisions of charges imposed.
The equitable sharing of the skies is not a new phenomenon. 76 years ago, at the Chicago Conference, when the future of commercial air transport was discussed in a post World War setting, this was a serious topic of discussion but polarization among the two great powers at the time – The United States and Britain – stymied it. This resulted in ICAO having no say in air transport economics and is relegated to a limited function to guide the progress of air transport by fostering the planning and development of air transport.
If one were to claim that lop sided competition in air transport has so far resulted in something distinctly immoral about exploiting society at its most vulnerable moment where there is no alternative but to resort to available air transport as dictated by lop sided market forces, he might not be incorrect. It is in fact a blatant exploitation of a human right where the right ensures not to be used or exploited for another’s benefit.
Perhaps the shock doctrine might give rise to a new era in the liberalization of air transport?
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