Europe must address “deep-rooted issues” which hamper the competitiveness of its aviation sector, Iata has urged.

The main concerns highlighted by the airline trade organisation are onerous regulation, high taxes, inefficient air traffic management and a lack of sufficient infrastructure capacity.

Iata believes the EU261 compensation scheme is complicated for airlines and passengers and needs urgent wholesale reform.

The association is developing a ‘competitiveness toolkit’ to provide governments with an analysis of the strengths and weaknesses of their air connectivity.

The analysis will be updated regularly, to enable stakeholders to measure progress.

The first country report for Spain will be followed by other key European states in the coming weeks.

Iata director general and CEO Alexandre de Juniac said: “In 2037, 1.9 billion passengers should be traveling to, from and within this continent. That growth will create jobs and drive a modern economy.

“But these economic and societal benefits will only materialise if Europe provides a playing field on which its airline industry can be competitive.

“Governments must embrace a spirit of change in their policies and ambitions for aviation. If governments make the right decisions for aviation – effective regulations, fair taxes and efficient infrastructure – the competitiveness of the entire European economy will improve.”

He added: “This year’s air traffic management performance has seen delays at record levels.

“Passengers deserve better, and airlines cannot wait for the benefits of the Single European Sky programme to materialise.

“Urgent action is needed today to ensure improvements are in place for next summer.”

Airports with strong market power must be effectively regulated.

“The key is to agree the principles for establishing which airports need regulating, and a way to make that regulation effective, quickly,” said de Juniac, speaking at the first Iata Wings of Change Europe conference in Madrid.