For reasons ranging from high fuel costs to regulatory complexity, European regional airlines still face “a very difficult time,” according to European Regions Airline Association (ERA) director general Simon McNamara. Meanwhile, persistently weak economic data continue to “depress people’s willingness to travel,” he said, leading to contraction of the European airline industry as a whole.
Nevertheless, the 55 ERA member airlines managed on average to raise load factors on their aircraft, thanks to measured capacity cuts. “It shows our members are reacting dynamically to the market,” said McNamara, who took over as ERA boss from Mike Ambrose just last December. “We’re also still seeing consolidation and some losses,” he added, citing the bankruptcy of OLT Express of Germany as a recent example. Others continue to do well despite everything, but usually due to their status as niche players or support from local politicians.
McNamara has wasted no time finding his stride at the ERA, using his first board meeting, on January 30, to seek approval to carry out a strategic review. His request gained the endorsement of the ERA board, which consists of representatives from regional airlines as well as regional aircraft manufacturers and suppliers. The association plans to present the review when it meets for its October general assembly in Salzburg, Austria, for implementation from early next year, said McNamara.
Speaking with AIN before the April 10 and 11 ERA spring conference in Edinburgh, Scotland, the new ERA DG added that he sees some “quick wins,” including more one-on-one meetings with politicians, which take place predominantly in Brussels, Europe’s political capital. Conference delegates planned to discuss how Europe’s centralized decision-making threatens all-important air links to its regions.
Passenger Compensation Plans
Three years have passed since the conference last met in Edinburgh, when a volcanic ash cloud from Iceland caused chaos far and wide and delegates had to resort to whatever means they could to get home. A focus on passenger rights proved rather apt, given the recent proposal by the European Court of Justice to revise Regulation 261/2004, which required airlines to compensate passengers in such situations without limit.
The proposed revision drew mixed reaction from the ERA and Europe’s major airline lobbying group, the Association of European Airlines (AEA), which called it “a step in the right direction.” Drawing on the 2010 ash cloud experience, the proposal better defines “extraordinary circumstances.” For example, natural disasters or strikes by air traffic controllers do qualify. In such circumstances, the airline will have to provide accommodation for no more than three nights (except for certain passenger categories, such as the disabled). The revision also would give carriers more time to solve operational problems. For an intra-EU flight, the allowance would amount to five hours instead of three. “The aim is to give the air carriers reasonable time to solve the problem and encourage them to operate the flight, not just cancel it,” said EC commissioner for transport Siim Kallas.
McNamara did applaud the commission’s stand on limiting the obligations for care and assistance for events beyond an airline’s control and for proposing limits of care for certain regional operations. “The revisions go some way to striking a fair balance between protecting passengers and imposing onerous burdens on airlines,” he explained. “The attempt to begin defining when an airline is and when it is not responsible for disruption is also a step forward in highlighting that many different players are responsible and liable when an air journey goes wrong.”
However, McNamara expressed disappointment about new measures the ERA considers harmful to regional operators in particular. “The proposal to make the first carrier in a multi-segment trip responsible for compensation if a missed connection results in a long delay to the entire trip is a step backwards,” he said. “It will place a disproportional burden on European regional feeder operators who play a crucial economic and social role in linking Europe’s remote regions.”
The list of complex issues that form the fronts across which the ERA’s small directorate team must lobby is long. From the Sesar air traffic management initiative–costing regional operators disproportionate amounts to equip their aircraft–to the availability of slots, liberalization of ground handling, safety and security and the Emissions Trading Scheme, the ERA must serve as the watchdog for the interests of Europe’s regionals large and small, as they soldier on mindful of the next cataclysmic event that shuts airspace and leaves them liable.