By Olivier Jankovec, Director General, ACI EUROPE
Fresh data for the third quarter of 2009 released by Eurostat, the EU’s statistical office, have confirmed expectations. With eurozone countries reporting a +0.4% growth compared with the previous three months, European recession is officially over. Although this is certainly good news for aviation, it cannot be taken for more than what it is: brighter light at the end of the tunnel.
The crisis update report that ACI EUROPE has just released shows that aviation, for its part, is still in recession. As of October, European airports were heading towards their 14th month of consecutive decline in air traffic. By the end of this year, they will have lost more than 105 million passengers, tearing away the growth gained over the past 3 years.
While the traffic downturn appears to be bottoming out, recovery is going to be slow and gradual – with defining structural market changes. Winter is likely to see more traffic growth returning at some locations, mainly driven by low cost carriers. But we will probably have to wait for the second half of 2010 for a more sustained rebound.
Such perspectives make it is easy to understand why Eurostat data clearly fails to cheer us up. Contrary to the banking sector, no one in aviation is reporting record profits – on the contrary, all actors in our industry have to cope with unprecedented difficulties.
Full service airlines are struggling to adapt to the new reality by cutting capacity, chasing costs, redefining their product and merging. Low cost airlines are gaining market shares, but eroded yields coupled with already bare-bone costs and more aircraft coming into service leave very little margin of manoeuvre. Airports have no choice but to confirm the bulk of their capital investments – standing at close to €50 billion until 2013, while their revenues are falling along with traffic and their external costs keep rising. Finally, even traditionally crisis-proof Air Navigation Service Providers appear to be coming to terms with their absurd cost-recovery system and look at setting-up a proper business model for their activity.
Yet, the fact that aviation continues to be one of the hardest hit sectors of the economy has been barely acknowledged by the EU and national governments. The only crisis relief measure adopted by the EU was the suspension of the use-it-or-lose-it rule for airport slots – an extremely questionable step that benefited only a few incumbent airlines. At national level, the Netherlands was the only country to repeal its ill-advised Air Passenger Departure tax, with similar taxes remaining in force in the United Kingdom, Ireland and France.
Just as Europe is moving from a financial crisis to a job crisis, it is puzzling that the EU has not capitalised on the unique role that our industry – and airports in particular, can play in fostering economic growth and employment. Don’t get me wrong: there is no doubt that the EU has done a lot for aviation over the last 15 years. But, we are now facing structural changes that require a true European industrial policy for aviation. In other words, a policy aimed at making European aviation strong and competitive in the global market place.
With its crisis update report, ACI EUROPE has therefore renewed its call for balanced relief measures aimed at boosting the competitiveness of the European aviation system. For us, the absolute priorities should be: 1 – Do not add costs for the industry through new regulatory initiatives and reduce existing costs, in particular by repealing unjustified taxes and providing public financing for aviation security. 2 – Incentivise traffic recovery through full liberalisation of aviation and more flexibility for start-up aid at regional airports. 3 – Keep focused on the long-term challenges and make sure that airports are financially incentivised to modernise and develop their facilities.
In this issue, you will find again examples showing how European airports are adapting to changing market conditions and coming forward with new and resilient business models – be they regional airports like Marseille-Provence or major hubs like SEA-Milan Airports and Aeroporti di Roma. These are the kinds of change that we need the EU to support and incentivise.
