Economy, volcanic ash cloud ERA conference

 - May 3, 2010, 6:03 AM

The European Regions Airline Association (ERA) is challenging legislators and politicians to cooperate more with carriers when formulating regulations rather than “continue persecuting” operators and risk reducing global competitiveness. ERA called for officials to apply their own procedures for better regulation as literal and metaphorical clouds overshadowed its eighth annual spring conference last month, held in Edinburgh, Scotland.

As the meteorological situation unfolded overhead (see article on page 1), the European lobby group, which represents 65 intra-regional airlines, published an open letter to the European Commission (EC), European Union (EU) Council, and European Parliament (EP) seeking a partnership toward common goals. “Air transport is operating in the most adverse economic conditions it has ever faced,” said ERA president Antonis Simigdalas, chief executive of Greek carrier Olympic Air. “Its viability is threatened by multiple complex external factors, even without poorly constructed and often unnecessary regulation.”

ERA director-general Mike Ambrose said industry cooperation in developing “simple, effective regulations that will advance our common interests and improve the lives of European citizens [could] only be achieved if our collective knowledge and advice are taken seriously.” The industry cannot keep absorbing the cost of additional regulation. “Nice-to-have regulations are not affordable,” Ambrose told AIN.

Given that ERA has long called for such change, especially for greater consultation, Ambrose said there now exists a “much higher” level of concern, since the industry remains in “quite serious” trouble. “The only upside is a feeling among stoical but cautiously optimistic ERA presidents that the financial crisis has bottomed out,” he said. “They have launched measures to survive through cuts in jobs, routes and capacity,” creating “a much leaner and fitter industry able to take advantage of the upturn–but can we survive to the upturn?” he asked.

Ambrose wants regulators to consider the proportionately higher impact of legal requirements on operators of smaller regional airliners. “Some routes are only ever profitable with 30 to 50 seats but are important because they provide international access to communities and are therefore a fundamental driver of air-transport development,” he said. “The additional costs arising from regulations fall in an area of discretion.” Meanwhile, increasing capacity to reduce seat-mile costs won’t work. “Bigger aircraft are uneconomical on ‘small’ routes and loss of routes is damaging and contrary to EU aims,” concluded Ambrose.

Regional airlines were becoming “more and more disillusioned with initiatives that do not seem that coherent,” said Simigdalas. “We are therefore seeking some kind of order and justification [for] how legislation that controls us comes about. The EC, [EU] Council, and EP have an inescapable responsibility to ensure that new legislation is based on solid ‘better regulation’ principles and processes if it is to be credible, relevant and acceptable to the public and industry.”

Trying to prompt airlines to greater action, Irish Aviation Authority chief executive Eamonn Brennan urged conference delegates to lobby national governments harder to allow the merger of air traffic control (ATC) centers as the only way for the emerging Single European Sky to offer 50-percent lower costs compared with the current system. “We really need a paradigm shift in handling ATC,” he said, while suggesting that all European en route traffic could be run from a single “bunker.”

Brennan teased delegates by saying that ATC providers could charge what they wanted because operators had to pay “or you won’t fly.” Ironically, many of the ERA presidents couldn’t fly home for several days because volcanic ash clouds meant completely closed controlled airspace: airlines could not fly at any price.