Demystifying Level Playing Field in Air Transport

05.04.2012

Background
Violation of the level playing field is a frequently debated issue in the context of international air transport. Examples are:

  •  the discussions about the Emission Trading System (ETS)
  • the growth of Gulf carriers, in particular when the allocation of additional traffic rights in air service agreements to those carriers is being discussed
  • (indirect) financial support to low-cost carriers at secondary airports


However, it is not always clear if the issue is really a distortion of the level playing field (rule-based level playing field) or rather a worsening competitive position (outcome-based level playing field). A deteriorating competitive position can be a natural market outcome and it is never desirable to pursue a fully outcome-based level playing field (although it may be desirable to level the playing field to certain extent in case of market failure). Many stakeholders in the air transport industry raise issue regarding violation of the level playing field and expect an implicit or explicit answer from governments, although in fact the issue at stake is a competitive threat due to normal market forces.
 
In other cases, a violation of the level playing field may really be the case and a role for the government or competition authorities is needed to level the playing field.
 
Workshop
Airneth organizes a workshop on Level Playing Field in air transport. For this purpose, we have invited a number of fellows/academics/experts to write a position paper about the concept and application of the level playing field.
 
The position papers will be presented during a small scale workshop (30-40 participants). Questions to be answered during the workshop are:

  1.  What are the most common definitions of a level playing field?
  2. What is the relationship between a level playing field and social welfare?
  3. In which circumstances are government actions needed to “level” the playing field?
  4. Which policy options does the government have, to intervene in the playing field, if desirable?
  5. To what extent is the level playing field distorted when it comes to competition between European Airlines and Third Country Carriers? What could be the specific impact for Amsterdam and KLM?
  6. How does the European Commission/other European countries deal with the level playing field issues with respect to competition with third country carriers?
  7. To what extent is the level playing field distorted when it comes to the introduction of ETS?
  8. To what extent is the level playing field distorted when it comes to security measures at European airports?
  9. To what extent is the level playing field distorted when it comes to state aid and start-up subsidies to airlines?
  10. In which circumstances should the Dutch government consider action to “level” the playing field in aviation?

Program
Presentations of discussion papers (approx. 30 minutes per paper):

  • Prof. dr. Pablo Mendes de Leon, Institute of Air Space & Law, Leiden University
  • Dr. Mark Lijesen, Spatial Economics, VU University Amsterdam
  • Prof. dr. Hansjochen Ehmer, German Aerospace Center (DLR)
  • Joost Kolkman, Netherlands Institute for Transport Policy Analysis (KiM)
  • Jolanta Rekiel, Ecorys


Panel discussion

  • Gerbert Romijn, Netherlands Bureau for Economic Policy Analysis (CPB)
  • Dr. Peter van Fenema, Institute of Air Space and Law, McGill University
  • Dr. Mark Lijesen, VU University
  • Jan Veldhuis, Airneth