Europe’s regional airlines face many challenges–not least of which centers on trying to change the way politicians in Brussels view aviation. The European Regions Airline Association (ERA) expends much effort on behalf of its 65 members trying to convince Eurocrats that regional airlines provide vital economic links that need nurturing in an era of consistently high fuel prices and an economic downturn severe enough to threaten the very existence of the European Union.
To the ERA, it appears that the European Commission’s good intentions sometimes prove ill-conceived and, even when not, the industry runs the risk that draft legislation passing through the European Parliament will damage airlines for the long term. The airlines see even the European Court of Justice as adversely affecting how legislation is applied. The European way, complain the ERA and its members, is to defend the consumer and the environment at any cost to business.
Meanwhile, the EC also tends to revisit existing legislation, such as so-called passenger rights and the “airport package,” now undergoing a review of the slot allocation regulation (EC 95/93). ERA director general Mike Ambrose sees the slot issue as “a major threat” and “the most critical regulation for air transport in Europe, despite working well for many years.” As ERA deputy director general Simon McNamara explained to AIN, the EC has expended its efforts on getting the best use out of existing capacity by encouraging the use of larger aircraft. Rather, the onus should fall on creating more capacity, by building more runways, for example.
Ambrose suggests that the European Civil Aviation Conference (ECAC) could revisit its airport capacity study and identify those fields that haven’t achieved “what could be expected.” During an interview with AIN shortly before the general assembly, the outgoing ERA director general took a swipe at the EU’s use of constancy reports, documents that prompted the ERA to appoint independent consultants with a mission to counter the misinformation they contain. “ECAC has more knowledge and access in this area than any consultant,” said Ambrose. “No adjustment to the regulation will increase airport capacity.”
So how has the dire economic situation in Europe affected its regional airlines? “Ever since the end of 2007 our carriers have been on a nonstop economy drive,” said Ambrose. “Some European airlines have gone out of business; there have been mergers; staff have been shed.” He cited Hungarian flag carrier Malev as an example of a non-ERA member that has disappeared, but among ailing regional airlines Denmark’s Cimber Sterling has also met its demise.
“The whole industry is facing severe financial constraints, yet there is little being done to slow the pace of further regulatory burdens or to promote the development of air transport, which is critically important to European economic recovery,” said Ambrose.
McNamara added that Europe has turned its focus toward control and constraints rather than promotion. “The focus is wrong in that respect,” he said.
That this lack of trust harms economic prosperity manifests itself most graphically by the progress evident in developing parts of the world, as well as in the Middle East and Asia-Pacific. Even in the U.S., Ambrose pointed out, the FAA helps promote as well as regulate the industry. Meanwhile, in Europe, the EASA’s cost to operators continues to increase despite the alleged elimination of duplication that drove the founding of the single safety authority. “There is no analysis that says, ‘This was the [pre-EASA] cost and this is how much has been saved,’” said Ambrose.
Another concern for airlines involves the Single European Sky, and the supporting effort of the SES ATM Research (Sesar) program. “We see lots of money and effort being put into R&D but we’re not seeing what the benefits are going to be. What’s the business case?” asked Ambrose.
“For regional operators there are different requirements, so we need business cases [for each user group] and a plan for deployment, which is currently late given that the R&D outputs are allegedly coming next year,” added McNamara, who also expressed concern about a disproportionate cost to regional operators.
“The cost of on-board equipment required is estimated at $1 million or more per aircraft, which for the smaller aircraft [regional airlines] use–such as the Fokker 50–is a much higher investment as a proportion of the residual value of the aircraft than it is for the bigger aircraft used by other airlines,” he said.
McNamara also mentioned efforts to compel states to launch cost-cutting and rationalization in preparation for SES. “We saw an effective performance scheme implemented two years ago, but since then we’ve seen targets progressively watered down, and the [EU] member states are still failing to meet them,” he lamented. “The principle is great, but we expect it to be a let-down.”
A central problem, according to Ambrose, remains the fact that the EC has no power to enforce. While Ambrose accepts that “the EC has worked hard on this,” in the background the broader goals of SES also appear diluted. The aim until recently has centered on cutting cost in half and doubling capacity by 2020, but McNamara told AIN that the target seems to have slipped to “something like 2033.”
“So what has happened?” asked Ambrose. It appears that no one has highlighted the “slippage” of the SES ATM Master Plan. Rather, the delay seems likely to happen stealthily and could soon amount to a “fait accompli.”
In a convivial meeting at the ERA’s headquarters at Fairoaks Airport, just outside the London M25 orbital road, Ambrose turned his attention to passenger rights, an issue that has dogged the airline industry in Europe for many years now. “The EC still plans to revise Regulation 261 [261/2004],” Ambrose told AIN. “Our fundamental concern is with the Parliament, as I think the Commission recognizes that [the regulation] is inappropriate as currently drafted. There are some within the Parliament who don’t seem to realize that passenger rights don’t come for free.” The ERA hopes that the redraft will include a limit on liability–after the lack of one caused so much cost for airlines during the volcanic ash grounding, for example–and “an ability to recoup expenditure from third parties.” With the latter, Ambrose still expects that “airlines will have to prove their case on each occasion.”
The other aspect involves the European Court of Justice’s interpretation of 261/2004’s “extraordinary circumstances” provision, under which airlines don’t have to pay compensation for delays and cancellations caused by technical faults. Ambrose said that the ERA hopes for “a clear and more rational definition of extraordinary circumstances” from the revised regulation. “If an aircraft breaks down, then it’s extraordinary circumstances,” asserts Ambrose, adding that if authorities want to see that the aircraft has been withdrawn from service for technical reasons, they can refer to a tech log.
Regulators also seem to assume that airlines should produce a spare aircraft “just like that,” said Ambrose.
“The Parliament has nothing to lose by making things onerous for airlines,” added McNamara. “But the EC is realizing this now. There has to be a balance.”
With the final word on passenger rights, Ambrose expressed disdain for the court’s actions. “I was disappointed and disturbed by the original judgment [on Regulation 261 from the ECJ] but subsequent judgments have reduced my respect for the ECJ enormously,” he said.
Still another related threat Ambrose described–a floating proposal for bankruptcy protection–would require airlines to carry insolvency insurance to cover “the extremely small number” of passengers that might travel on an airline that goes under.
“It’s a case of over-regulation again,” added McNamara. “Airlines are not the bad guys, and, more to the point, why are a few going bankrupt in the first place?”
On the EU’s Emissions Trading Scheme (ETS), Ambrose raised the specter of a trade war and the uncertainties that would introduce. “There will be pressure on politicians to look at some face-saving device, but we don’t want to see any legislation that applies to EU operators only,” he said. “We are strongly supporting the ICAO initiative,” but “while ICAO recognizes that an urgent problem exists in Europe it probably doesn’t see its role as sorting out the mess the EC has created. That’s simply a contributory factor.”
Ambrose and McNamara both expressed doubt that ICAO will have established a set of principles and structure for an international aviation emissions trading scheme before 2015, by which time the industry will be confronting other obstacles.
“ICAO has talked about the nuts and bolts but not the political side, and how to implement it,” said McNamara. “Some states could say that they are not interested.” Returning to the bigger economic picture, Ambrose said that while other parts of the world are experiencing a boom, Europe’s “extremely bad financial situation” calls for cost containment rather than increases. “It doesn’t make sense for Europe to increase costs for the air transport system so passengers overfly the EU” through hubs such as Istanbul, Turkey and “other fast developing states close to Europe.”
McNamara warned of “a downward spiral” in which other factors–such as Munich failing to get approval for a third runway and the imposition of a night ban at Frankfurt–discourage transfer traffic. Meanwhile, Ambrose criticized the UK government’s “obsession” with a new rail link between Glasgow and London when what London needs is a new hub airport. “Nobody among our regulators or politicians is focusing on the business case justification,” said Ambrose. McNamara added “it would be nice” if regulators viewed the airline industry with the same positive regard they have for rail.
Flight Time Limitations
Following the FAA’s introduction of new flight and duty time limitation rules for pilots, the EASA continues its deliberation on the right approach for Europe. “We remain concerned that existing regulations provide for extremely high safety standards, and our safety record shows that the standards are effective,” said Ambrose. He suggested that the EASA needs to “focus solely on safety and not on social considerations,” despite pressure to do the latter from some quarters. Ambrose warned that whatever rules upon which the EASA eventually decides, airlines and passengers rely on pilots using their rest time responsibly. “In the U.S. they’re relying on [the] Colgan Air [Q400 accident in Buffalo, N.Y.] as the rationale, but shouldn’t the pilots have declared themselves unfit?” asked Ambrose.
There are many issues on which the ERA Directorate helps its member airlines collectively fight in their corner in the corridors of power, which tends to mean Brussels (Commission and Parliament) and Luxembourg (Court of Justice). One issue in particular–security–has taken on vastly more significance over the past 10 years or so, and it has taken that long simply to see onerous post-9/11 rules work in the real world without overly affecting passengers’ journey times and general travel experience.
Nick Mower, ERA general manager of regulatory affairs, told AIN that moves toward a so-called risk-based approach to security would make better use of resources. “Focusing on the threat,” as he put it, can result in arbitrary targets and dates getting fixed and then changed–as in the case of a requirement for scanners that would ultimately prove unavailable in time for the mandate–and will become a thing of the past. Regulators imposed the scanner requirement “without any trials, cost estimates or impact assessment,” said Mower.
“Many airports can’t fund the additional space, equipment or staff,” added Ambrose. However, a more targeted approach could result in what Ambrose described as a different security system at each airport. The other major security subject concerns the restrictions on “liquids, aerosols and gels” (LAGs) in hand luggage, although Mower noted that at a recent security conference, survey results suggested that LAG restrictions don’t rank high among passengers’ list of concerns. Recently, in a U-turn on previous intentions to relax them, the EC decided to maintain restrictions on LAGs.
While perhaps the most controversial area in aviation security remains profiling, Ambrose offers no apologies for his firm stance on the issue. “I think profiling is as important as the security check itself,” he said. “It’s absurd to have a lack of profiling because of a need to be non-discriminatory.”
Mower suggested that regulations should allow security personnel to pay more attention to the behavior of passengers and provide for better data sharing among authorities. “A lot of information is not being shared internationally that could help in understanding why a passenger is traveling,” he concluded.