Airline chiefs demand EU address ‘rising cost burden’ of regulation

Europe’s airline bosses have warned the sector is at “a critical turning point” with “growing regulatory and cost burdens” threatening to drive up fares and reduce the number of routes on offer.

 

Meeting at the annual summit of lobby group Airlines for Europe (A4E) in Brussels, the chief executives of British Airways parent IAG, easyJet, Ryanair, Lufthansa Group, Air France-KLM, Jet2 and Tui united to demand the EU update its Aviation Strategy and “address the rising cost burden on EU airlines”.

 

In a statement, the airline chiefs said: “EU airlines and passengers cannot keep absorbing ever-growing regulatory and cost burdens.

 

“We’re already losing competitive ground to non-EU airlines, destinations and hubs that do not face similar regulatory obligations.”

 

They argued the annual costs of airline regulation in Europe had tripled since 2014 to €15.5 billion and would rise to €27.6 billion by 2030 despite insufficient airspace capacity and infrastructure investments leading to delays, pointing out: “Europe’s neighbours are not subject to the same costs and regulation.”

 

The summit highlighted the rising costs of sustainability, with the airlines urging the EU to “rapidly bring down the cost” of its emissions trading scheme (ETS) and “bring it into line” with the voluntary Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) of the International Civil Aviation Organisation (ICAO).

 

Corsia has been dismissed as worthless by aviation environmental groups.

 

However, A4E suggested the EU scheme meant a family of four flying from Belgium to Greece could pay €80 more in ETS costs than they would on a trip to Turkey. 

 

Iata also called for a review of the EU ETS. Director general Willie Walsh insisted: “European aviation policy must bolster competitiveness as it advances decarbonization. 

 

“The priority must be the full implementation of Corsia, the reinvestment of ETS revenues into SAF and other credible decarbonisation solutions, and the elimination of overlapping measures that add cost and complexity without environmental gain.”

 

He noted the costs of emissions trading had increased following the phase-out of free allowances and said: “It is critical revenues are channelled back into the industry’s transition [to net zero]. 

 

“Current incentives remain disproportionately small. The SAF Allowance scheme covers only a fraction of the demand, estimated to meet just 4-5% of the industry’s total allowance needs between 2026 and 2030.”

 

The EU’s Sustainable Transport Investment Plan estimates the investment required to meet aviation’s SAF requirements in the EU at up to €67 billion by 2035, and between €268 billion and €376 billion by 2050. 

 

The A4E chiefs also called on the EU not to extend the ETS to all EU departing flights. It currently applies only to flights operating within Europe, not beyond.

 

They also demanded the EU act to bring down the costs of sustainable aviation fuel (SAF), suggesting the European SAF Mandate target of 6% SAF use by 2030 could only be met “provided prices drop significantly”.

 

A4E also warned the costs of compensation to air passengers for delays and cancellations under the EU261 regulation on passenger rights could double to €15 billion a year if revisions proposed by the European Parliament go ahead.

 

It criticised the rules as “poorly designed” and noted: “Non-European airlines are not subject to the same obligations.”

 

The group repeated its annual demands for reduced charges at major airports and action to mitigate the impact of strikes by air traffic controllers – including mandatory arbitration, protection of overflights and a right of redress for airlines.

 

However, airspace and air traffic management remain under the control of individual states.