October 16, 2000 2

Report to the ALPAReport to the ALPA Board of Directors Board of Directors

Capt. Dennis J. DolanCapt. Dennis J. DolanFirst Vice PresidentFirst Vice President

October 16, 2000 3

GlobalizationGlobalization

Once the favorite “buzz word” of the 90s,Once the favorite “buzz word” of the 90s,

Globalization is a reality Globalization is a reality

in the new decade !in the new decade !

October 16, 2000 4

What do these “terms” mean?What do these “terms” mean?

NOTAM – VORTAC – ILS – ACARS – PIREPNOTAM – VORTAC – ILS – ACARS – PIREP

AEAAEA

APECAPEC

ECAECA

OECDOECD

TCAATCAA

October 16, 2000 5

Here’s What They Mean!Here’s What They Mean!

AEAAEA (Association of European Airlines) (Association of European Airlines)

APECAPEC (Asian Pacific Economic Cooperation) (Asian Pacific Economic Cooperation)

ECAECA (European Cockpit Association) (European Cockpit Association)

OECDOECD (Organization of Economic Cooperation (Organization of Economic Cooperation & Development)& Development)

TCAATCAA (Transatlantic Common Aviation Area) (Transatlantic Common Aviation Area)

October 16, 2000 6

These Organizations/Proposals, in These Organizations/Proposals, in some way, support these some way, support these

principlesprinciples

CabotageCabotage

Foreign OwnershipForeign Ownership

Wet LeasingWet Leasing

Flags of ConvenienceFlags of Convenience

October 16, 2000 7

Organizations Working To Assure Organizations Working To Assure Pilot Interests Are ProtectedPilot Interests Are Protected

ALPA !ALPA !

October 16, 2000 8

The Evolution of GlobalizationThe Evolution of Globalization19881988

First foreign codeshare agreement approved (United/BA)First foreign codeshare agreement approved (United/BA)

19921992 First Open Skies Agreement – US/NetherlandsFirst Open Skies Agreement – US/Netherlands

19931993 First antitrust immunity granted – Northwest/KLMFirst antitrust immunity granted – Northwest/KLM

19951995 World Trade Organization (WTO) establishedWorld Trade Organization (WTO) established

8 more Open Skies agreements signed (Austria, Denmark, 8 more Open Skies agreements signed (Austria, Denmark,

Finland, Iceland, Luxembourg, Sweden, Switzerland)Finland, Iceland, Luxembourg, Sweden, Switzerland)

October 16, 2000 9

The Evolution of GlobalizationThe Evolution of Globalization(cont.)(cont.)

19961996 First large Open Skies agreement (Germany)First large Open Skies agreement (Germany)

Antitrust immunity granted to American, Delta & United Antitrust immunity granted to American, Delta & United

19971997 First Asian Open Skies agreement (Singapore)First Asian Open Skies agreement (Singapore)

First Open Skies agreement in Central America (6 First Open Skies agreement in Central America (6 countries)countries)

U.S. signs its 25U.S. signs its 25thth Open Skies Agreement Open Skies Agreement

19991999 Association of European Airlines proposes Transatlantic Association of European Airlines proposes Transatlantic

Common Aviation Area (TCAA); European Commission Common Aviation Area (TCAA); European Commission endorses TCAA conceptendorses TCAA concept

October 16, 2000 10

The Evolution of GlobalizationThe Evolution of Globalization(cont.)(cont.)

20002000

First round of multilateral negotiations at APECFirst round of multilateral negotiations at APEC

(US–Brunei–Chile–New Zealand--Singapore)(US–Brunei–Chile–New Zealand--Singapore)

OECD discusses multilateral cargo services agreementOECD discusses multilateral cargo services agreement

US signs its 50US signs its 50thth Open Skies agreement Open Skies agreement

20012001

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October 16, 2000 11

ALPA’s Response to ALPA’s Response to GlobalizationGlobalization

Partially through our interface with Partially through our interface with IFALPAIFALPA

Actively through ALPA’s Government Actively through ALPA’s Government Affairs Dept.Affairs Dept.

Mainly through our International Issues Mainly through our International Issues specialistspecialist

October 16, 2000 12

Where did ALPA’s Where did ALPA’s Globalization Strategy Come Globalization Strategy Come

From?From?

Global Pilot Strategy (GPS) developed in early Global Pilot Strategy (GPS) developed in early ‘90s‘90s

Strategic Planning Committee reports through Strategic Planning Committee reports through ’90s’90s

Input through pilot Alliances/IFALPA contactsInput through pilot Alliances/IFALPA contacts

Formation of Global Aviation Strategy GroupFormation of Global Aviation Strategy Group

October 16, 2000 13

Globalization Issue,Globalization Issue,Example 1Example 1

APECAPEC (Asian Pacific Economic Cooperation) – 20 (Asian Pacific Economic Cooperation) – 20 Pacific rim countries that meet to exchange Pacific rim countries that meet to exchange ideas about economic development, including ideas about economic development, including aviation issues.aviation issues.

Recently, 5 countries (US-Brunei-Chile-New Recently, 5 countries (US-Brunei-Chile-New Zealand-Singapore) have been negotiating a Zealand-Singapore) have been negotiating a multilateral air services agreement which:multilateral air services agreement which: includes 7includes 7thth freedom cargo operations freedom cargo operations proposes 7proposes 7thth freedom passenger rights freedom passenger rights proposes a change to ownership & control proposes a change to ownership & control

rules (designation rights), which would rules (designation rights), which would result in a “flag of convenience” agreementresult in a “flag of convenience” agreement

October 16, 2000 14

Globalization Issue,Globalization Issue,ExampleExample 2 2

OECDOECD (Organization of Economic Cooperation & (Organization of Economic Cooperation & Development) – 30 developed countries, including Development) – 30 developed countries, including most Western European Countries, U.S., and Canadamost Western European Countries, U.S., and Canada

In June of 2000, OECD circulated a document In June of 2000, OECD circulated a document proposing to “liberalize” cargo issues and draft a proposing to “liberalize” cargo issues and draft a multilateral agreement for cargo servicesmultilateral agreement for cargo services

Some of the proposals included provisions to:Some of the proposals included provisions to:

drop ownership and control limitationsdrop ownership and control limitations drop restrictions on wet-leasingdrop restrictions on wet-leasing drop restrictions on cabotage drop restrictions on cabotage

October 16, 2000 15

Organizations Working To Assure Organizations Working To Assure Pilot Interests Are ProtectedPilot Interests Are Protected

ALPA !ALPA !TheThe Pilots Union Pilots Union