ERA calls for stronger action to deliver an aviation strategy for Europe

Published on : Monday, December 7, 2015

ERA AirlinesThe European Commission’s (EC’s) Aviation Strategy, published on 7 December, is designed to address a range of topics and create a stronger and more competitive European airline sector.

The European Regions Airline Association (ERA) welcomes the EC’s recognition that aviation is a key driver of economic growth, jobs, trade and mobility and that a strategic review of the sector is needed to ensure that European aviation maintains its leadership of this global market. A strong and successful aviation sector is vital to EU citizens and to ERA’s members who provide connectivity to some of Europe’s most remote regions where air transport is an essential mode of transport.

Some of the strategy’s proposals are positive and will lead to a stronger (and safer) industry. The EC has identified the key issues that need to be tackled – many of which were in ERA’s own strategy released at the beginning of this year (The Future of Regional Aviation). However, many of the actions proposed in the EC’s strategy are short term, have no distinct timelines and do not provide a strong and clear action plan to strengthen Europe’s aviation industry.

Overall, ERA believes that the strategy will not increase the long-term competitiveness of the industry compared to other methods of transport and non-European competitors. However, ERA is ready to work with the EC, Council and Parliament to ensure that the strategy is modified to deliver on its original intent – a stronger, fitter and more efficient air transport system.

Simon McNamara, Director General of ERA, says: “We are pleased that the strategy recognises that aviation is a driver of economic growth, jobs, trade and mobility and that a strategic review of the sector is needed to ensure that European aviation remains competitive and maintains its leadership in a global market. However, many of the strategy’s action points lack substance and will not tackle some of the underlying weaknesses of the industry. For example, the imminent lack of hub airport capacity in Europe threatens ERA’s members’ access to Europe’s largest airports and risks a loss of connectivity to Europe’s regions.

“Investment in aviation is also critical, whether through new infrastructure, aircraft, systems or people. This needs to be driven by access to funding through channels, including the European Investment Bank, with a greater recognition of aviation’s role as a social and economic enabler for Europe and its citizens.

“The strategy is a step forward, but it needs more work to deliver on its intent and ERA is looking forward to working with the EC, Council and Parliament to strengthen the plan.”

On some of the specific issues addressed in the strategy ERA has the following initial reaction:

 
Safety & security

 
ERA welcomes the moves to reform the European Aviation Safety Agency (EASA) and its basic regulation with a stronger focus on delivering risk and performance-based regulation. A strengthened, more effective, EASA should lead to the reduction of the need for national safety authorities. Equally, ERA applauds the proposals to expand the safety regulatory oversight of drones, an issue the association called for in August this year. With regards to aviation security, it is vital that states take leadership and protect their citizens by committing to funding both new and existing anti-terrorist security measures.

Investment
Investment in aviation is essential. The strategy mentions the significant overall economic impact of aviation on the EU’s GDP – as much as €510bn. Far greater use of organisations, such as the European Investment Bank (EIB), should be explored to enable greater investment in new infrastructure, aircraft, systems and people – currently it is limited to mainly air traffic management-related projects. ERA is already in discussions with the EIB, calling for an expansion of its aviation-related activities. ERA also welcomes the proposed relaxation of ownership and control rules for airlines.

Tackling monopolies
The provision of air traffic services is still undertaken on a monopoly basis. Reform is not coming quickly enough to this industry and, regrettably, the Single European Sky project has not led to the radical efficiency shift that is needed. Some airports are operated as monopolies and the existing regulatory regime, particularly with regards to airport charges, does not provide the necessary control or deliver sufficient transparency over their activities. A more concrete set of regulatory actions and economic regulations are needed to reduce the cost of these monopolies to EU citizens and air carriers than has been proposed in the strategy.

Infrastructure – airports
Europe’s key hub airports are already congested and the strategy identifies the physical and economic costs of the lack of new runway and terminal capacity. Often regional, smaller aircraft operations are the first to be squeezed out of congested hub airports leading to a loss of connectivity for citizens. Despite recognising the problem, the EC’s strategy does not propose any significant measures to address this challenge other than ‘optimising’ what already exists. A European plan to expand and increase runway and terminal capacity in the long term, alongside a plan to fund this expansion, is essential.

Connectivity
ERA’s members serve the parts of Europe where air transport is vital. The value of regional connectivity is recognised in the strategy which is welcome news. However, other than a means of monitoring connectivity, the EC proposes no substantive action to promote and encourage air connectivity, especially to the regions.

Support to regional operations
The strategy recognises tools such as the Public Service Obligation (PSO) system as a means of encouraging regional operations. However, other than issuing guidelines on the current EU rules, there are no proposals to encourage their greater and more efficient use or means of ensuring that air transport serves parts of Europe where it may not be economically viable to do so, but where there is a real social need.

Regulatory complexity and taxation
The strategy makes little mention of the overall regulatory burden placed on aviation, and does not take into account the published studies that illustrate the detrimental impact of the numerous aviation-specific taxes and charges (including the intra-European scope of the EU ETS) on European jobs, competitiveness and the economy. Although the strategy acknowledges that aviation specific taxes and levies negatively impact connectivity and competitiveness, there is no clear plan to achieve their removal. There needs to be a thorough analysis of the regulatory framework in place and clear plans to remove unnecessary regulation and complex and disproportionate taxes that are often not consistent with the International Civil Aviation Organisation policies and consolidated international agreements.

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