eTN ROAR: The truth about Euro skies

The European Commission found that the average fleet of British Airways is 12.9 years, Lufthansa [is] 11.2 and Etihad Airways is 4.9. It also focused on European Union airlines higher unit costs. I agree that EU airlines have formidable challenges to deal with, but I believe that the most formidable ones are home-grown.

The European Commission recognizes that connectivity is key to EU’s
competitiveness with aviation supporting 5.1m jobs and contributing Euros
365b to European GDP.

Yet European airlines are not given the recognition they deserve as
engines of growth and providers of employment by the public at large, the
media and many politicians.

European airlines are treated as either cash cows or sacrificial cows and
increasingly as both! It is simply senseless and counter-productive for governments desperately trying to stimulate socio-economic growth to stifle these engines of growth. Look at the proliferation of unreasonable taxes on the aviation industry.

UK Secretary of State for Transport Patrick McLoughlin has admitted that
the high level of tax levied on travelers from British airports is an issue which “needs to be looked at and investigated” but also predicted that the Chancellor of the Exchequer’s response would be: “just find me another £3 billion, and we’ll talk.”

Yet, a World Travel & Tourism Council study showed that removing UK’s APD would result in an additional 91,000 British jobs being created and £4.2b added to the economy in just 12 months, demonstrating how one can be penny wise and pound foolish.

Look at the fragmented, non-convergent or even contradictory national or
regional regulations which undermine, albeit unintentionally, the vital air transport sector and sometimes even the interest of the customers it is supposed to protect. Passenger rights and competition laws come to mind here.

Look at the lack of progress on airport infrastructure. Each year the London airport expansion program is delayed costs the UK between £900 million and £1.1 billion according to the British Chambers of Commerce.

Look at the revised EU ETS which only applies to EU airlines and thus undermining their ability make investments which would actually have
environmental benefits. As if this was not bad enough the Commission wants
EU to go down the war path again with its proposal to apply the revised EU
ETS to foreign airlines!

Look at the ATC saga. EC VP and Transport Commissioner Siim Kallas has
himself recognized that “Air traffic control is still far too expensive” and that ‘the inefficiencies in the European ATM system are “estimated to impose additional costs of €5 billion per year… an appalling waste of time and money.”

Look at EU airports, 78% of which remain fully publicly-owned. Even in 2010, at the height of the European economic crisis and with passenger numbers in decline, more than a third of European airports, including 23 of the 24 largest airports, raised their charges!

Look at the poor Facilitation or rather excellent Complication of air travel with frustrating security and border controls and visa regimes. UNWTO-WTTC research shows that visa facilitation will bring US$ 206m extra receipts and 5.1m additional jobs in G20 economies alone by 2015.

A CEPS Policy Brief demonstrated how the UK has been losing out significantly by not being part of the Schengen Area. A UK visa (valid for UK and Ireland only) is more expensive and seen as less value for money than the Schengen visa (valid for 25 Countries). From 2004 to 2009 around 2 million UK visas were issued whereas the number of Schengen visas issued increased from 8 to 12 million.

Facilitation and air traffic management issues penalize consumers but are
conveniently ignored by passenger rights regimes.

In 2012, EU’s  export to UAE valued at Euros 37.1b with import valued at
Euros 8.3b, hence a trade balance of Euros 28.8b in favor of the EU.

[Editor’s Note: The above eTN ROAR article is excerpt from Vijay Poonoosamy’s speech at the Association of European Airlines’ Aviation Leadership Summit held on November 28, 2013, in Brussels.]

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