Factfile
Organisation: The European Low Fares Airline Association
Headquarters: Brussels
Website: www.elfaa.com
year founded: 2003
Members: easyJet, Flybe, Jet2.com, Norwegian, Ryanair, SverigeFlyg, transavia.com, Vueling and Wizz Air
What is ELFAA’s mandate?
Our mission statement is to ensure that European Policy and legislation promote free and equal competition, thus enabling the continued growth and development of low fares airlines (LFA) into the future, allowing a greater number of people to travel by air. How can this be achieved? By identifying policy areas affecting the low fares sector; effectively influencing regulatory issues; and promoting the common interests of its members in various European institutions.
Is LCC travel on the rise in Europe and, if so, can you provide some examples of its growth?
Since liberalisation by the EU of market access for EU-registered airlines, low fares airlines grew rapidly. According to a February 2011 report by air transport consultants, York Aviation, the low fares airline share of intra-Europe scheduled point-to-point passengers in 2010 grew 43%. This share is forecast to grow to 60% by 2020.
How long have low-cost carriers been around and, is it fair to say, that they have transformed air travel in Europe?
LFAs emerged from the deregulation of market access with the creation of the Single European Market in 1990 and have recorded strong growth every year since then.
To put things in perspective, ELFAA data (collected in conjunction with the Forum of Regional Airports [FARE] and the Association of European Regions) shows that between 2005 and 2007, Europe’s airlines expanded intra-European connectivity by 426 city pairs – 96% of which were added by ELFAA members. ELFAA airlines carried 172.4 million passengers in 2010.
Are there any markets in Europe where LCCs have failed to make an impact and why is this?
Certain states in Europe have practised more protectionist policies upon incumbent carriers than others. This can take the form of (in some cases repeated) state aid to ‘restructure’; awarding of PSOs (Public Service Obligations); and the distortion of competition by local rules governing slot allocation, which provide subsidies to home-based operators on a sole designation basis, while denying access to the route to low fare competitor airlines, willing to operate with no subsidy.
Is the potential future shortfall in capacity at Europe’s airports a concern for ELFAA?
We believe the problem is somewhat overblown. While there is undoubted need for expansion at certain European airports, the SESAR Definition Phase identified sufficient runway capacity to triple current traffic. ELFAA believes some of the excess demand could be catered for at lower cost to states (therefore ultimately consumers) by harnessing some of the latent capacity at regional and secondary airports for point-to-point traffic. Improvement of public transport links to such airports could be provided at significantly lower cost than new runways and terminals at some of the congested airports.
What are the biggest challenges facing ELFAA and low-cost carriers today?
While the EU deserves full credit for its far-sighted initiative to liberalise market access for EU-registered airlines, it is to be regretted that it did not proceed to introduce more competition for other elements of the aviation value chain.
The provision of air traffic management in Europe remains the preserve of state-designated monopoly providers. Of the resultant yearly bill to airlines of over €8 billion, Eurocontrol’s Performance Review Unit has identified €3 billion per annum, which could be eliminated by a reduction of the current fragmentation.
ELFAA calls for accelerated implementation of a true Single European Sky, with a high level of ambition in terms of improved operations and cost efficiency.
Do LCCs still get a raw deal on slot allocation at the big hubs?
If correctly applied, EC Slot Regulation 793/2004 should preclude any discriminatory treatment of any sector. The problem arises from uneven application of the regulation and distortion of the market in some cases by creative local rules. In common with all other airline associations, ELFAA does not see any need for revision of the slot regulation – just better enforcement.
What would you say to those that argue that the low-cost model is not sustainable in the long-term?
York Aviation forecasts continued growth of the low fares sector and ELFAA supports that view. While there will be continued migration of intra-Europe traffic to LFAs from charter and point-to-point carriage by legacy carriers, LFAs will continue to concentrate on the creation of new demand, with new routes, linking the regions of Europe by direct flights with other regions.
