Organisation: Association of European Airlines (AEA)
Web address: www.aea.be
Headquarters: Brussels, Belgium Year founded:
History traced back to 1952
34 major European airlines
How will European airlines fare this year?
The impact of the economic situation first showed up in our passenger figures in June last year and since then the general trend has been steadily worsening, with the latest figures (for March 2009) pretty close to a minus 10%. Until we can get a feel for when the downturn will eventually bottom out it is difficult to predict the scale of the impact. It’s clear that traffic will be heavily negative this year. Normally profitable airlines will struggle to contain losses and airlines which can usually break even – which describes the majority of European network carriers – are facing heavy deficits.
What sort of support does aviation in Europe need from governments?
A major obstacle to capacity cuts is the ‘use it or lose it’ slot rule, and airlines are urgently seeking a temporary waiver to this. Beyond that, the airlines’ service providers – notably airports and ATC – must be encouraged (through regulatory intervention if necessary) to forego price increases aimed at compensating for lost revenues.
Will there be more consolidation in the European airline market?
I am sure that future historians will see the Air France-KLM fusion in 2004 as a pivotal event, which was followed by Lufthansa/Swiss a year later. Now we have proposals, concrete or otherwise, involving AF-KL/Alitalia, British Airways/Iberia and tie-ups between Lufthansa and Austrian, SN Brussels Airlines and bmi. This is a process that is far from finished.
How would Europe benefit from a Single Sky?
The current European Air Traffic Management system is spectacularly safe, but in all other respects it is a model of inefficiency. Operating costs are vastly inflated, delays are endemic and vast amounts of CO2 are needlessly emitted. The Single Sky could deliver cost reductions running into billions of euros annually and could reduce European airlines’ carbon footprint by more than 10%.
Why are European airlines taxed so much more than other industries?
The recent history of passenger taxes in Europe speaks volumes about the way governments view airlines and their passengers. The last increase in UK Air Passenger Duty coincided with a funding gap caused by the decision to upgrade the country’s nuclear deterrent. France has a tax to help pay for aid to developing countries. Italy has a tax to help fund redundancies. Aviation is an easy target, and if these taxes can be labelled as ‘good for the environment’, it is supposed to make them easier to swallow. However, the consequences of such measures are now beginning to be realised. Denmark recently withdrew its tax when the damage to the economy was better understood. Belgium scrapped tax plans when it saw how the newly introduced Dutch tax was driving passengers across the border to Brussels – and now the Dutch have abandoned their own passenger tax.
What is AEA’s stance on emissions trading?
The European aviation community agrees that it has to face up to its environmental responsibilities. We would prefer to tackle emissions through investment in improved technology, best operational practice and the tackling of infrastructure inadequacies that lead to unnecessary fuel burn. If these are insufficient to meet targets, then recourse to financial instruments may be necessary, in which case we believe that a well-designed emission-trading scheme (ETS) is far preferable to a tax. A global ETS is our clear goal and would have a far greater benefit for the environment.
This article is featured in Routes News 2009 Issue 3