EU Aviation Package must strengthen competitiveness and connectivity, says Iata boss

EU Aviation Package must strengthen competitiveness and connectivity, says Iata boss

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The European Commission is being urged to ensure that the upcoming European Union Aviation Package strengthens the competitiveness and connectivity of the region’s economy, and benefits consumers.

The new package proposed by the Commission must address weaknesses in the EU air transport sector that impact on air connectivity options and impose higher costs on airlines and passengers, according to Iata.

Director general and chief executive, Tony Tyler, said: "Air connectivity is a crucial driver of economic and social prosperity in the EU.

“Strong connectivity needs strong airlines. But Europe’s airlines are struggling, in part because they are hampered by unreasonable taxes, high costs for inefficient infrastructure, and regulations unfit for purpose.

“An effective Aviation Package must help to alleviate these burdens.”

European airlines have operated on an average margin of 2.3%, and profitability has lagged their North American counterparts by a cumulative $29.8 billion since 2010.

If this continues, European airlines will struggle to match the investment plans of their international rivals, with implications for jobs and connectivity, the airline trade body warned.

"Air transport in the EU supports more than 9 million jobs and €500 billion in GDP. It is an industry of supreme strategic significance to Europe and its citizens,” Tyler said.

“But a history marked by a collective failure of vision by European policy makers has restricted the benefits of air connectivity. The Aviation Package is a long-overdue opportunity to reinforce the foundations of European aviation.”

Iata wants to see European aviation strengthened in five areas where broad alignment already exists with wider strategic aims of the EU – passenger taxes, security, consumer protection, carbon emissions and modernization of air traffic management.

Concern also surrounds rising airport charges.

The Aviation Package proposes a “substantially weaker” regulatory environment for airport charges, which would reduce the benefits to passengers, Iata argues.

It says that airports are failing to match airlines in their efforts to reduce costs and provide better value for money for consumers.

The price of airline tickets has fallen by 37% whereas airport costs per passenger have risen more than 30% since 2000, both in real terms.

"The Commission understands the importance of delivering new momentum in areas such as security regulation, the Single European Sky, and working for a globally sustainable industry. That’s good,” said Tyler.

“But urgent action is needed to strengthen the regulation of airport charges.

“As virtual monopolies, airports have significantly greater bargaining power than airlines and without effective regulation, airports will have insufficient incentive to reduce charges and promote efficiency. This ultimately impacts on passenger connectivity options and on the cost everyone has to pay.”

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