EBACE Convention News

European Airlines Plead For Covid Relief and Lasting Reforms

 - June 10, 2021, 9:36 AM
Easyjet's CEO Johan Lundgren led calls for reform of air transport market regulation rules in Europe to take account of lessons from Covid-19. (Photo: Airbus)

European airline leaders today amplified their calls for governments to break what they view as inertia over Covid-19 travel restrictions, arguing that the continent’s carriers continue to be the hardest hit by the pandemic. Speaking ahead of the 5th Annual Airlines For Europe (A4E) Summit, Easyjet CEO Johan Lundgren said that a “lack of coordination” over easing rules is still having a very negative impact on a sector that is the most reliant on international travel.

A4E is now forecasting that profits for member airlines are set to be 23.9 percent down in 2021 with projected losses of just over €18 billion. By comparison, it expects to see an 8.8 percent profits decline for Asia Pacific carriers (€8.6 billion) and 2.7 percent in North America (€4.08 billion). The trade association complained that airlines are being put under impossible financial pressure by rising air traffic control costs amounting to €5.4 billion. Lundgren urged his fellow airline bosses to join Easyjet’s planned legal action against the insistence of European air navigation service providers on a 1 percent rise in charges, despite the unprecedented drop in revenue passengers. “They are abusing their dominant market position and this [charging formula policy] was never the intended outcome in a situation like this,” he complained.

A4E managing director Thomas Reynaert argued that the crisis has resulted in conditions that demand a fundamental rethink of the commercial model for air traffic control services. “Why should airlines be paying for a service we are prevented from using?” he said, echoing a broader theme of the pre-summit press conference that Europe’s air transport market regulations have been exposed by Covid as being not fit for purpose.

Air France KLM CEO Benjamin Smith led calls for urgent reform of European Union EU261 rules covering passenger rights and requirements for airlines to compensate for delayed and canceled flights. “The first 14 to 15 months of this crisis have hit us in a really punitive way that was never intended,” he told reporters. “We need a more balanced approach to consumer protection and these reforms have already been eight years in the making.”

According to A4E, its member carriers had to pay more than €10 billion in refunds during 2020 to cover unprecedented mass trip cancellations for reasons entirely beyond their control. The group called on EU leaders to work with the industry to introduce reform that would benefit consumers with “clear, simple rules.”

The A4E leaders also echoed their repeated calls for European governments to lift Covid travel restrictions between EU member states from July 1 based on the use of the newly agreed certification process for travelers. They praised the greater flexibility recently shown by countries such as the Netherlands and Spain while singling out others, such as the UK and Ireland, for what they said was an approach to border controls that was not based on science and real data.

Ryanair CEO Michael O’Leary described the approach of the government in his native Ireland as “a disgrace.” Referring to what it said are illogical and precipitous restrictions on travel to and from countries like Portugal and Malta, Reynaert complained that UK authorities have ignored positive data based on high rates of vaccination in the country. “They are making it up as they go along, confusing travelers and making it impossible for airlines to plan,” he said, accusing the UK of isolating itself from the rest of the world.

Reynaert said he and his members are eagerly awaiting the outcome of this week’s meeting of G7 leaders, who they are imploring to kick start an air transport recovery by lifting restrictions on transatlantic flights between Europe and the U.S. Referring to an EU-led task force considering this issue, he called for an immediate decision to remove blocks on the “transatlantic corridor.”

The airline group also called for faster and more complete progress on the long-running Single European Sky (SES) program that it says will result in more cost-effective air traffic routings that will also deliver significant reductions in carbon emissions from flights. Lufthansa CEO Carsten Spohr pointed to 16 percent reductions in emissions that the German carrier is already achieving from early routing changes for flights in and out of Frankfurt as a taster for the greater progress that could be achieved.

Pointing to decisions made last week by the European Council on economic regulation, Reynaert called for “politics to be put aside” for the sake of progress with SES. “The agreement last week showed that state sovereignty issues are continuing to impede progress in many areas, with too many decisions being kept at a national level,” he complained. “Member states decide on targets and revenues [for air navigation service providers] and that is a conflict of interest.”