Final project report unveils impact of low fare airlines on industry

27 Oct 2014

271014_Final project

The liberalisation of the air transport in the early 1990’s has brought benefits to the travelling public in terms of democratisation, cheaper air fares and diversified offer. But who pays the price and what is the amplitude of this phenomenon? The ETF dedicated an EU-funded project to investigate the impact of low fares airlines on the airline industry. The final project report summarises the conclusions and proposed strategies and is now available online.

Jobs in aviation that used to be prestigious and high-quality are disappearing and being outsourced or replaced by cheaper work. This development can be attributed to the liberalisation of the industry without social regulation which leads to social dumping. Airlines are facing fierce competition, the profit margins are lower than in any other industry and employers are looking for ways to cut costs in order to remain competitive. While some costs (such as fuel or aircraft ownership) are to a certain degree fixed, airlines believe that labour costs can be pushed down in a never-ending spiral. Some of them have also discovered “flags of convenience” as one of the vehicles to pursue further cost cutting by using social dumping.

Therefore, the ETF has launched an EU-funded project under the title ‘Evolution of the Labour Market in the Airline Industry due to the Development of the Low Fares Airlines’. It is already a second EU co-funded project within two years, which shows the extreme importance and dynamic developments in this field. Besides a scientific study, the project included a two-day conference that took place on 1 – 2 July 2014 in Catania. Around 120 delegates have gathered in order to discuss preliminary findings of the study and discuss strategies on how to cope with the new situation.

You can download the final report of this project below.