ERA pushes back hardon pax compensation regs

 - November 1, 2006, 11:10 AM

Regional airlines in Europe last month lodged a formal protest alleging that civil servants had misrepresented legislation about passenger compensation for canceled or delayed flights. The European Regions Airline Association (ERA) has filed a complaint with the European Ombudsman in an attempt to prevent administrators from encouraging ungrounded expectations through misinformation released to the public and media.

“Posters, leaflets, fact sheets, videos and a European Commission Web site contain statements that are wrong,” according to the ERA, which seeks an apology to airlines and the withdrawal of the cited material. Following the complaint, lodged as operators met at the April 6 to 7 ERA spring conference in Rome, major airlines planned to follow suit through their own trade lobby, the International Air Transport Association (IATA).

ERA director-general Mike Ambrose blasted EC officials for “the whole sorry saga of passenger compensation.

“The EC’s failure to show regard for expert advice pales into insignificance when compared with its own ignorance,” said Ambrose. Carriers complain that the EC Web site says, for example, that only rarely do airlines have to cancel a flight legitimately because of bad weather.

“Current technological development makes it possible for a plane in almost all cases to take off or land in the most difficult weather conditions,” according to the document.

“We don’t expect Commissioners to be technically knowledgeable in all areas,” said Ambrose. “When the issue affects safety we do expect them to accept advice. It is unacceptable that known operational and commercial evidence provided by industry can be ignored.”

Regional airlines have shown the most concern over the “enormous” compensation involved and have asked for a comprehensive and transparent assessment to gauge the probable effect of new policies.

Ultimately, ERA officials want more cooperation and have called for a partnership with regulators. “The EC has a talented workforce,” added Ambrose. “Working together with industry, rather than downplaying the value of [our] experience and expert advice, the EC could achieve better goals faster. Consumers and airlines would benefit and scarce resources would not be wasted.”

As regional operators met, the ERA emphasized the value of European Union membership to local airlines. In the Baltic States that have joined the EU, for example, passenger traffic grew at five times the rate registered among carriers in other member countries last year. Three airlines in Lithuania and Latvia reported growth of more than 22 percent.

As if to confirm the trend, airlines at the conference reported the need for more capacity to react to steadily increasing demand, a trend that has also resulted in hardening charter rates. Danish Air Transport (DAT) managing director Jesper Rungholm said that demand for turboprop equip- ment such as Fokker 50s, Bombardier Dash 8s and ATR 42s had built over the past European winter and that airlines have already started looking for late-year capacity before the start of the new summer season. DAT’s fleet includes four ATR 42-300s and an ATR 42-320, two ATR 72-200s and a Beech 1900D.

Rungholm said that although nominal aircraft, crew, maintenance and insurance (ACMI) rates had not increased, operators with extra capacity have been able to command “list” prices. “This was not possible a year ago,” he added.

DAT uses two ATR 42s and a single ATR 72 to carry freight for DHL and Federal Express, as well as overnight mail. Up to 25,000 ad hoc charter travelers a year fly on “quick-change” ATR 42QCs and ATR 72QCs. The airline also transports 20,000 passengers a year on scheduled regional flights using ATR 42s and an 18-passenger 1900D, occasionally supplemented with a Saab 340.

Demand has become so strong that DAT can place aircraft on more than one contract simultaneously. For example, an ATR 72 used by UK regional airline Air Wales for maintenance cover regularly ferries back to Denmark for other previously booked charter services. The UK’s Eastern Airways and Euromanx also do business with DAT.

In Germany, meanwhile, Lufthansa has responded with overwhelming force to the low-fare threat with extensive changes to the composition of its regional network. Last year the German flag carrier allied with CityLine, Air Dolomiti, Augsburg Airways, Contact Air and Eurowings, joining a single Lufthansa Regional partnership with the aim of cutting costs by $120 million through the end of next year.

Part of the process has involved changes to the group’s collective regional fleet. In a series of major transactions, the airline plans to add 11 BAe 146-300s and three Avro RJ85s, making Lufthansa Regional the world’s largest BAe 146/ Avro RJ operation with 37 aircraft.

For CityLine, the restructuring took the form of a sale-leaseback deal with BAE Regional Aircraft involving the three RJ85s. The operator now flies 13 leased machines, as well as five RJ85s it owns outright.

By September Eurowings will have added six leased BAe 146-300s to its mixed fleet of eight BAe 146-200/300s, while Italian Lufthansa subsidiary Air Dolomiti takes five BAe 146-300s–its first of the type–over the same period. Eurowings plans to use the newly acquired regional jets to replace some of its 48-passenger ATR 42-500 turboprops.

Similarly, Air Dolomiti will use its 99-seat BAe 146s to add capacity, replacing smaller 48-passenger Bombardier CRJ200s on feeder services from northern Italy to Lufthansa/Star Alliance hubs at Munich and Frankfurt.

Another European carrier demonstrating its agility is Sweden’s Skyways, which leased its four Embraer ERJ 145s to British and North American operators, and has sold or leased seven of its nine Saab 340s. The Swedish operator is adding two more Fokker 50s to a 17-strong fleet devoted to scheduled operations and supported by a little ad hoc charter activity. Two 19-seat Jetstream 31s and a pair of 50-seat Saab 2000s carry the rest of the airline’s capacity.

Citing cost pressures, business development vice president Jan-Olov Bergling said that the airline has closed some domestic service as well as its route from Stockholm to Birmingham, England. Last year Skyways closed its Saab 340 maintenance base at Linkoping. It continues to maintain the Fokker 50 fleet, but has outsourced Saab 340 work.