Brussels, 13/04/2012 (Agence Europe) - New air transport guidelines to replace those issued in 1994 and 2005 were the subject of a consultation exercise last year. The European Commission will shortly be publishing draft legislation that is expected to focus on a market-based approach with strict rules governing state aid and subsidies for airlines and airports. This was what emerged at a hearing held on Thursday 12 April at the European Economic and Social Committee (EESC) for stakeholders on new developments in air transport.
Speaking on behalf of the European Commission, Mr Baldwin from DG Transport explained the huge changes brought about by liberalisation of aviation and the single EU market in recent years, which have given rise to expansion of aviation and its share of the economy (150 airlines, 462 airports and 3 million indirect jobs, in other words 3% of the working population); more choice (a doubling of the number of airlines and a quadrupling of the number of routes); greater competition, leading to lower prices; a spectacular mushrooming of low-cost airlines (40% of all airlines are now low-cost, and they account for half of the biggest airlines), which has in turn led to a mushrooming of regional airports. He explained that the industry was facing a number of challenges in the immediate future, like the need to make European airports more competitive in the face of competition from other parts of the world; and the doubling of air passengers predicted by 2030, which would mean 10% more demand than supply, leading to airport saturation and half of all flights being delayed.
Ms Ilzkovitz from DG Transport said that increased competition had forced countries to provide state aid. The emergence of low-cost airlines has led countries to bid to attract them by means of facilities and state aid to develop regional airports, which sometimes leads to overcapacity and duplication. The European market is characterised by a huge proportion of state airlines (77%) and small airports which cater for fewer than a million passengers a year and are therefore too small to make economies of scale and are hence in need of subsidies. In its new guidelines, the European Commission will suggest monitoring state aid: - for aviation to ensure competition between airlines and between airports, to preserve the industry's competitiveness and to avoid unfair playing fields; - for regional airports, to restrict the number of airports receiving subsidies, and to avoid overcapacity and duplicate routes, paying greater attention to the compatibility of aid. She said more airports needed to be self-sufficient and rely on private investment. In order to work out whether state subsidies for airports were “compatible” (investment in start-ups and so on), she said the current guidelines were quite robust but not always very clear. During the consultation organised by the Commission, interested parties tended to back the existing guidelines but recommended paying closer attention to small airports and introducing more pragmatic investment rules. Other issues are still open. The Commission is currently looking into the interaction between airlines and airports in connection with the Commission's analysis of state aid as part of a joined-up approach (airport subsidies can indirectly subsidise airlines); the scale of aid provided in light of the size of the airport; not allowing aid that would duplicate flights provided by small airports in the locality, etc. Ilzkovitz said the Commission wanted to develop a balanced, more market-orientated, approach to state aid.
Speakers at the hearing included a representative of ACI (the International Council of Airports) who called for simpler, clearer rules and greater flexibility for small airlines, which face greater costs. The Association of European Airlines (AEA) said a standard European system was required that introduced the same conditions for all players. Airlines should be prevented from withdrawing services and should be required to declare any state aid. AEA also called for aid to be non-accumulative and not to be given to airports that will be competitive over the long-term, and for rules to be strictly applied. The European Transport Workers' Federation (ETF) said social aspects needed to be considered in the new guidelines in order to ensure that the rights of workers are protected. It criticised the subsidies for low-cost airlines, which take advantage of state aid and investment without having to pay the costs in terms of staff and other costs borne by the other operators. (FG/transl.fl)