ERA Members Cut Capacity as Passenger Numbers Decline

 - November 1, 2012, 5:28 AM
ERA Total Aircraft by the Numbers

Regional-airline managers in Europe have moved promptly this year to offset lower traveler numbers by deploying smaller aircraft or reducing service frequency in a successful effort to increase passenger load factors by 2.9 percentage points. In the first six months of 2012 operators provided 6.4-percent fewer seats (compared with last year’s equivalent period) as passenger numbers fell by 2.9 percent.

Modest growth in this year’s first quarter was offset by a decline in the second quarter, said outgoing European Regions Airline Association (ERA) director-general Mike Ambrose. “It is evident that management action has boosted seat factors by just less than three percentage points,” from 64.7 percent in 2011 to 67.6 percent this year,” he told a meeting at the ERA general assembly in Dublin.

As traffic (revenue passenger-miles/kilometers) fell by 5.4 percent, airlines reacted by cutting capacity (available seat-miles/kilometers) by 9.3 percent, according to figures released to ERA member presidents and airport directors. The reduced activity is confirmed by statistics showing that member airlines accumulated 4.4 percent fewer flying hours and 5.4 percent fewer landings.

The results have been achieved against a background that Ambrose characterizes as “the fifth year of worldwide economic problems,” exacerbated by five factors: no real progress in solving Eurozone debt crises; forthcoming [U.S.] election fueling uncertainty; European Union state policies divided between “increased economic constraints” and “stimulate for growth;” industrial and civil unrest; and harsh economic conditions, uncertainty, stagnant investment that are likely for the foreseeable future.

Such circumstances provided the ERA official with an opportunity to call for no new legislation that could hurt the industry. “The data demonstrates painfully and clearly that regulators will not be acting responsibly if they adopt a ‘business as normal’ approach. [When] job losses are all too apparent in most European industries, national and international politicians must learn to temper political idealism and dogma with hard, realistic assessments of the effects of [proposed] new rules.”

Preparing to retire at year-end, Ambrose–who sees the 1992 final liberalization of European air transport as a high point for the regional sector–made a plea that the European Commission involve operators more in legislative proposals. Suggesting that slot allocation arrangements are arguably the “most critical” of all regulations, he hopes that the EC “will establish a closer and constructive relationship with the industry when such fundamentally important regulations are being considered.”