The European Business Aviation Association (EBAA) has been representing the industry for more than 30 years, since its foundation in 1977. Arguably, 2009 could prove to be the most challenging year ever for Europe’s business aviation community as it deals with pressures resulting from a severe economic downturn and a new wave of regulatory challenges. Business aviation flying activity has undoubtedly dropped in recent months, with Eurocontrol departures, arrivals and overflight figures showing a reduction of as much as 25 percent for February 2009 compared with the same month in 2008. Spain, the UK, Belgium, Germany and France have seen the steepest decline.
Brian Humphries has been at the heart of EBAA life for more than a decade, initially as managing director of member flight department Shell Aircraft, and subsequently as chief executive and president of the association. Ahead of this week’s EBACE show in Geneva, he spoke to editor Charles Alcock about the situation that European business aviation now finds itself in and what EBAA is doing to lighten the load.
Many of the topics covered in this interview will feature in the EBACE 2009 conference agenda, full details of which can be found on page 6.
To what extent is European business aviation seeing a downturn in activity during the current economic difficulties? How is this manifesting itself in terms of new orders, canceled or deferred orders, charter bookings, flight department closures, etc.?
We are certainly seeing a downturn but I do think it has to be set in perspective. Across Europe we are seeing a reduction [in flying activity] of around 20 percent compared with the same period a year ago. We have seen an accelerating trend from the beginning of the autumn last year, and some countries in the European Union (EU) have been affected worse than others. The UK has probably been as badly affected as anybody, not least because of the reduction in transatlantic traffic and the country being a key recipient of transatlantic traffic. For instance, we have seen traffic at Luton down by as much as 30 percent.
However, if we look at the 2008 traffic levels, the downturn compared with 2007 was only about three percent and the activity levels were still higher than in 2006. It is important to remember where we’ve come from. With the steep growth we have seen from 2001 until the end of 2007 and halfway through 2008, we must keep in mind that even with the reductions, activity levels are still higher than they were just a few years ago.
So, does the current downturn represent a lasting setback in terms of the acceptance of business aviation in Europe, or is it just a temporary blip?
We are all suffering in this recession as badly as anyone ever has and this has resulted in reduced activity levels and canceled orders. I wouldn’t pretend for a minute that our members aren’t suffering because they are, but most of them are fairly robust and are adopting a position to help them to survive. How long it will go on for is difficult to say. We are certainly of the view that the capabilities of business aviation will continue to be recognized.
The need for business aviation in Europe remains as it always has. It has actually increased because airlines have reduced their services–reducing flights and frequency. We have a long-term optimistic view but there is no doubt that in the short term times are very tough.
Has the economic crisis changed EBAA’s priorities? How can you respond to your members’ immediate economic difficulties?
The priorities have not changed fundamentally but they have changed in focus and detail, with the emphasis now being on cost and efficiency. These are the biggest concerns with a lot of the issues going on at the moment. Many of our members, in fact 80 percent of the operators in Europe, have five or fewer aircraft, so they are small and medium-sized enterprises. They really can’t cope with the threat of bureaucracy that is coming from the regulators on issues like security and emissions. We want to play our part with these issues, but we don’t want it to be done in a strangulating way.
We are also concerned about the complexity of the new operating rules from EASA [the European Aviation Safety Agency] and the volume of material to which we have to respond. (See box on page 36.–Ed.)
We are looking at the membership value proposition. We are trying to make sure that people enjoy clear benefits from membership in EBAA. We are focusing on helping people do business more readily in a changing environment. The membership is continuing to grow. Fees have gone up only once in ten years. It is much cheaper than other associations and is tailored to the size of the operator, a deliberate strategy as part of our membership value proposition.
We have 386 members at last count, not including members through the national associations who previously were counted separately. There has been about a 23-percent increase in membership since last year. To exhibit at EBACE, companies need to be EBAA or NBAA members.
Our members receive intelligence reports. We work hard to keep simplified security procedures. We are enhancing communications and making ourselves more visible. We have launched a campaign on value of business aviation. We have introduced a Talking Points pack on how to respond to questions about business aviation.
We are providing more direct benefits, such as a business-to-business segment
on our Web site. One good example of our impact is that EBAA and BBGA [the British Business and General Aviation Association] played a part in changing the UK proposal for a new aircraft duty in UK. We convinced the government that the associated bureaucracy is too much for the operators. They have reverted to a passenger duty system.
We next asked Brian about regulations concerning emissions trading. Please read his extensive response under the heading: “Humphries says ETS would burden small operators” on page 44. –Ed.
In countries such as the UK, business aviation does seem to be facing tighter security procedures. Are the authorities getting the balance right between insisting on necessary security controls against terrorist threats and ensuring that the convenience and flexibility that sets business aviation apart are preserved?
Are you satisfied that the new EC300 security rules will be enforced consistently across Europe? Maybe there is a case for stricter enforcement of the rules in locations where the security risk is greater?
We are very concerned about UK attitude to security. We have had lots of meetings. We agree on a position, or at least we think we’ve agreed on a position, and then two weeks later the authorities seem to adopt a completely different tack.
The UK is leading the other European Union member states to the point that
they are frightened to [declare] their own position. We very much want European security procedures for business aviation that apply across 27 states. We don’t want 27 different procedures, but it seems impossible to reach agreement with the UK to have Europe-wide rules.
The current European Commission position is that they may offer derogation for European Union member states from Europe-wide security rules below certain aircraft thresholds. This would mean that below this threshold member states would be free to have their own rules.
Originally, the old EC2320 rule would have applied to commercially operated aircraft above ten [metric tons] and not applying at all to noncommercial operations. The current proposal is to increase this threshold [to a level] above which there will be Europe-wide procedures. If this happens, it will be a welcome increase.
There is also a proposal to cover all corporate operations up to a higher weight in a concession that means that they would have tailored procedures rather than standardized airline procedures.
We are not looking for reduced security but we do want security delivered in a way that is appropriate to the business model. To be honest, 100 percent screening of business aviation passengers, regardless of their motive for travel, is not the best business model for us. The design of the aircraft is different, we don’t have cockpit doors for example, so the whole operating mode is different.
We do agree that if you know nothing at all about the passenger then some sort
of screening would be appropriate, but to facilitate this we have proposed a low-frequency screening protocol so that we would train nonsecurity specialist disciplines (for example, handling staff) to do security screening. There seems to be pretty widespread support for this.
The smaller FBOs would be able to have the equipment for security screening but wouldn’t have to have dedicated male and female staff to do the screening 18 hours per day. It could be done by dispatchers, mechanics or other staff.
But also, because of the nature of the business, there is a case for waiving the screening altogether for people you know, like regular corporate passengers, fractional owners or block charter customers. This would be available to operators and certain specific known passengers when certain undisclosed procedures have been met.
There is a lot of support for this in countries like Germany and France, but the UK seems to be blocking progress. We believe the known-passenger concept would work–but it would have to be robust and not available for all business aircraft users.
It would be appropriate for passengers who had already been through background checks for other reasons, such as checking credit before accepting a charter booking.
We want to have our own industry procedures overseen by ourselves. If operators want a waiver from screening they would need to have an audited screening program.
Because the UK is being so difficult, there is likely to be a derogation to allow member states to have their own procedures below certain aircraft thresholds and this will very likely mean our operators having to deal with different rules in different countries.
But surely there is a greater security threat in some states like the UK? Does this make it realistic to have Europe-wide standards?
Well, under a Europe-wide standard, any state would retain the right to raise the standards above this. So, under EC300/08, there is nothing to stop the UK from adjusting the standards upward, even if this meant 100 percent screening. We’d be OK with that as long as we had the low-frequency screening protocol. However, there is universal agreement that the helicopter is not a good terrorist weapon and screening for helicopters would not be appropriate.
Moves by the UK Border Agency indicate that they are now unwilling to continue the pre-clearance procedures that have made it so convenient for business aircraft passengers and crew to clear immigration controls in Europe. UK FBOs tell me that they face the prospect of having to pay to have Border Agency staff available to screen their customers at their facilities, rather than in the main airport terminal buildings? Are you concerned that this could become a wider issue in Europe? Surely the move to e-Borders technology is intended to ensure both convenience and effective security measures.
This is a big concern. Potentially, e-Borders is great opportunity but not if they impose all sorts of constraints that make it worse than before. Our concern is that every opportunity is being taken to impose more bureaucracy.
On this one we are led by the BBGA because this is a UK-led initiative. In fact, e-Borders could be a way to improve access to the U.S. where immigration issues continue to be a concern and a big constraint for European operators going to the U.S. has been security requirements. If we have good electronic data on passengers it could help this, but it could also hinder if e-Borders isn’t implemented in the right way. Every little step like this, if not properly managed, takes a bit away from the convenience of business aviation.
Despite the intervention of the European Commission in the long-running complaints over unequal access to the transatlantic charter market, the U.S. authorities still don’t seem to accept that foreign operators should be granted the same access rights and conditions to the U.S. that U.S. operators have to Europe. Do you have any confidence that the new U.S. administration will be more cooperative on this issue? Isn’t it fundamentally unacceptable to have such a competitive imbalance? Isn’t it time for the EC to increase pressure on the U.S. by enforcing similar restrictions on U.S. operators?
We still don’t have a level playing field on this. We have worked well with NBAA on this and we have worked well with the Commission too to make sure that we are not forgotten in Open Skies discussions.
One bit of progress is that the U.S. has now accepted that commercial operator can switch between [making] flights under commercial and private rules. It comes down to whether the operator is operating the aircraft for a charter passenger or whether the owner passenger is effectively operating the aircraft in his own right. This removes reason not to go for Part 129 certificate because you can now hold this and still operate privately as well as commercially.
We give very quick clearances to American operators in Europe, yet we still have the security constraints as well. We’ve managed to raise the limit from six flights each year to 12 flights for occasional planeload charters. It’s disappointingly slow. It’s like walking through treacle, but we are still moving forward.
Are there any other issues that you are also having to work on at EBAA?
Yes, airport access. To some extent the pressure has gone away a bit with the current market downturn but a fundamental concern is that we have no grandfather rights or right of access. So, while traffic is down by as much as 30 percent at places like Luton, if things pick up again and a new airline comes in, they automatically have priority over us for slots.
We are also very worried about London City Airport, which is to become a coordinated airport which will push us down the pecking order. We have had discussions with the Commission on this. We want to get it accepted that business aviation should be treated as segment of aviation filled by several operators. We have support from the Commission for the concept of programmed nonscheduled carriers but we haven’t yet got the support of airports on this and this is what our airport access working group is focusing on.
In longer term, we would like to see a proportion of slots given to business aviation, but under the present rules we can’t have that, so we are trying to find ways not to lose rights. We accept the fact that at big airports we will have a small proportion of slots, but is it fair that at the secondary airports where we have built up our slots we get kicked out when a new airline starts?
Airport access is probably the biggest concern going way into the future. On
the other hand, the Single European Sky and satellite-based navigation offers huge potential because we could have Cat 1 access at any airfield, making it possible
to have all-weather operations at many new airports.
Is it fair to say that this year’s EBACE show may be somewhat smaller than
last year in terms of attendance and exhibitors, and that this reflects the difficult trading conditions in which many of your members and their customers find themselves?
The OEMs and the press, particularly Aviation International News, have been great supporters of EBACE from the start and it goes without saying that without this EBACE would never have enjoyed the success it has. We really appreciate this.
For 2009, fortunately, most of the exhibitors were signed up before the downturn really hit the industry, so the exhibitor space is pretty well sold out. Hall 7 is full and so is Hall 6, although we won’t be using the expansion area we had last year. So there are no concerns about exhibitor presence, but the big question is visitor attendance and we do expect that the number of delegates might be down because of everything the industry is going through.
However, the show is just the place where the industry needs to meet and regroup in these tough times and remind the world that the fundamentals behind business aviation have not gone away, indeed they have intensified, and we have some great products out there to meet this demand.