Brussels, 11/06/2012 (Agence Europe) - The International Air Transport Association (IATA ) drew an unflattering portrait of the aviation sector in Europe at its annual general meeting in Beijing on Monday 11 June. The profit forecasts for the airlines are not looking too good, particularly due to oil prices. But the prolonged sovereign debt crisis and the emissions quotas trading system are doing just as much damage to the profits of the airlines, argues the Director-General of IATA, Tony Tyler. In his speech on the state of the aviation industry, he lambasted the European governments and their policies, which he feels are preventing the aviation sector from playing its role in favour of growth.
Losses due to oil and eurozone crisis. This year, IATA is forecasting losses equivalent to $1.1 billion for European airlines, a level which is nearly double that of the initial estimates of March ($600 million). It is primarily the price of a barrel of oil which can be blamed for this decline. Although trends in oil prices have recently been downwards, fuel still represents one third of the industry's operating costs. But this is not the only thing worrying IATA: “The greatest and most immediate risk, however, is the eurozone crisis; if this turns into a banking crisis, we may face a continent-wide recession, which would drag the rest of the world down with it, along with our profits”, said Tyler, adding that “for European carriers, the commercial environment is worsening rapidly, which has led to sizeable losses”.
ETS, a gun to the head. However, the aviation sector will not find salvation in European policies, he lamented: “At the same time, European carriers continue to be hit by high and rising taxation regimes, inefficiency in air traffic management and are paying the price for ill thought-out policies.” In this matter, it is still the ETS which is attracting the attention of the aviation sector. IATA, like the EU, says that it is in favour of a concerted solution within the International Civil Aviation Organisation (ICAO), but the association fears that this will be “impossible under current conditions”. In the view of its director-general, it appears that Europe is “more committed to set its ETS in place unilaterally than sincerely to negotiate a multilateral agreement. For the international counterparts of the EU, it is as if they are being asked to negotiate with a gun to their heads.” He is not, however, in favour of reprisal measures.
The EU is doing its own thing. As regards taxation, Europe is very much the bottom of the class for IATA: “look at Hong Kong, Singapore, the United Arab Emirates. These governments do not see aviation as a sin to be taxed”, Tyler argued, regretting the fact that aviation is too often seen in Europe as a golden goose.
IATA also deplores the fact that the European Single Sky is struggling to come into being, despite the considerable advantages it could bring. “Most member states won't even meet the unambitious targets that they agreed to”, said Tyler. He continued, equally bitterly, on the allocation of take-off and landing slots, which the EU intends to revise to respond to a lack of airport capacity: “Europe will - continue to - do its own thing and ignore international standards”, without the problem being resolved. (MD/transl.fl)