Brexit and passenger rights rank among the top concerns for Europe's airlines, according to the European Regions Airline Association (ERA). At a press conference in London on March 20, ERA director general Monserrat Barriga listed areas of concern, highlighted by a recent membership survey addressing Brexit, the regulatory burden, pilot shortages, consolidation, fuel prices, congestion, slots, the environment, financing, and ATC, among others. “We want an unrestricted bilateral [agreement],” she said of Brexit, while adding that the association is planning a Brexit event in late 2018, following on from ERA's February 2018 Brexit publication and earlier position paper.
With the stalled revision of EU Regulation 261/2004 (compensation for delays and cancellations), Barriga noted that the European Court of Auditors is examining the European Commission’s approach to ensure minimal inconsistencies between modes of transport. "We need the revision to be concluded,” she said, adding that the court expects to finish the audit by the end of the year. However, she acknowledged that the matter remains linked to the “Gibraltar issue,” whereby Spain wants Britain to give up the so-called rock.
"The situation is ridiculous," said Andrew Kelly, current ERA president and director of corporate affairs with ASL Airlines Group. "NEBs [National Enforcement Bodies] have been set up in every country and are supposed to rule on [issues such as when] extraordinary circumstances [apply] but the NEBS are bypassed by people going to different courts, and the courts [all over Europe] make different decisions. So the situation continues with no improvement; the traveling public thinks €79.99 is too much for a one-way fare but then expect €250 in compensation!”
However, he said, the ERA has grown stronger than ever, counting 193 member organizations—including 49 airlines, 21 airports, 11 manufacturers, and 112 suppliers (including service providers). Kelly noted how much lack of progress has hurt an industry trying to grow and prosper, from EU261 to slots to the Single European Sky.
One of Kelly’s main activities, through his role as acting CEO of ASL Hungary, lies with trying to forge a precedent for an increase in the pilot retirement age in close cooperation with academia and EASA.
Fleet financing stands as another key initiative for the association. Two airlines have so far taken advantage of a facility put together with the European Investment Bank (EIB), Air Nostrum (for Embraer E-Jets and Bombardier Q400s), and KLM Cityhopper (E-Jets), although Barriga noted some ERA member airlines would use such financing if it applied to used aircraft. However, the promise of efficiency and lower environmental impact drove the facility's creation, just as much as the need for helping the sector.
Economic Viewpoint
Peter Morris, FlightGlobal Ascend chief economist, said airlines had spent the past 18 years or so becoming more efficient, pushing upward available seat kilometers, average aircraft size, and load factors so that the number of flights has only recently, in the past three years or so, started to increase. One of his main points, however, centered on the number of small regional airports that exist. Of the 600 in Europe with some level of scheduled service, only 163 offer more than one million seats a year (based on 2014 data).
He also noted that around 17 percent of departing seats within Europe are UK-based, and that only six countries account for 61 percent of departing seats, out of a total of around one billion seats a year.
Morris said that many people overstate the influence of rail because only specific trunk routes feel a significant effect. “Aviation is the only [mode] that really unlocks the travel potential,” especially to the regions," he stressed. In fact, rail could only ever serve about 20 percent of origin and destination cities, he added. Morris suggested, however, that publicly subsidized routes have begun to die as governments concentrate on other priorities, and politicians often view aviation as a “luxury.”
In economic terms, GDP remains a key driver but Eastern Europe has dominated traffic growth, said Morris.
Between 2007 and 2017, the fleet of regional jets had decreased to 628 from 785, while the turboprop fleet had dwindled to 809 from 960 aircraft in the same period. “This contrasts with the story on the narrowbody side, as they have dominated market growth,” said Morris. With fuel prices having doubled in the period, despite recent falls from $100-a-barrel highs, turboprop sales (and in particular ATRs) have seen a resurgence. However, Morris suggested that a need remains for sub-40-seat turboprops. "The sensible thing would be for a Chinese OEM to take over [building] the Saab 340 again rather than starting from scratch [with an all-new aircraft]," he opined.
Morris noted that airplanes with less than 110 seats account for about 43 percent of European scheduled services, and he suggested regional carriers could see more opportunity to offer regional connectivity at hubs to feed larger airlines. “The real challenge for regional success is to gain greater stability of a wider European network,” he said. Regionals can help with the “lack of flexibility,” he added. “So it’s a strong market for regional airlines, but they need to focus on what they’re going to do and how they’re going to do it.”
The ERA is preparing for its spring Regional Airline Conference, scheduled in Vienna, Austria, from April 18 to 19, and it plans to hold its general assembly in the Scottish capital Edinburgh October 9 to 11.