No more protectionism - Tilton

Global liberalisation should be goal

Now is not the time for further protectionism in the airline industry, Glenn Tilton, United Airlines' chairman, president and ceo, said.

He said aviation was an industry that drove the world economy.

But he added: "This is an industry that has systemically failed to earn its cost of capital - yet is inhibited from managing itself as a true global business, thereby unable to leverage costs and services.

"We are, in fact, hamstrung by rules that hang onto inarguable historic misconceptions that do little but exacerbate industry problems." 

Speaking at the European Aviation Club in Brussels, Mr Tilton said would play its part to get the world out of recession.

But he added: "We need governments to work with us - to partner with us - across the globe to put policies in place, and the infrastructure in place, to allow us to meet the demands that will be placed on us."

He added: "We are fragmented, with serious limitations to our ability to invest, merge and cooperate. As such we must work through the regulatory patchwork that exists today to find creative opportunities to profitably meet our customers' needs."

Mr Tilton welcomed the call last week by the UK transport secretary Geoff Hoon for a relaxation in rules of foreign owners of airlines in the US and the Open Skies deal between the EU and Canada, also last week.

He said United was "enthusiastic about phase two Open Skies talks (between the EU and US) that will begin next month."

But he hit out at US Congressman James Oberstar who is seeking an investigation into airline alliances as he says they amount to monopolistic mergers.

He said Mr Oberstar had claimed he did not vote for such mergers.

Mr Tilton said: "Perhaps the question was not properly framed. If Rep. Oberstar voted for more competition, lower fares and more routes and service then he did indeed get his vote's worth and then some.

Glenn Tilton

"Due to the current regulatory anachronisms, the only way we can attempt to provide the global connectivity the market place demands is through alliances with other carriers."

He said he was confident the EU, which has launched its own investigations into alliances, will find them to be "pro consumer."

He also noted that the US Department of transportation (DoT) had given tentative approval for Continental Airlines to join the anti-trust immunity that other Star Alliance members including United, Lufthansa and Air Canada already had.

Mr Tilton said the aviation industry needed to modernise to meet the demands that economic growth will bring.

In the US, the administration was moving from a ground based to a satellite system to manage traffic and this would improve air traffic control even if the number of flights tripled.

He said similar changes were needed in Europe.

 Airlines are also moving to quieter more fuel efficient aircraft which will cut carbon emissions.            

www.unitedairlines.co.uk