The European civil aviation industry confronted with the global financial and economic crisis
- Parliamentary Assembly
- Text adopted by the Standing Committee, acting
on behalf of the Assembly, on 21 May 2010 (see Doc. 12250, report of the Committee
on Economic Affairs and Development, rapporteur: Mr Breen).
1. As the instigator and parliamentary
forum of the European Civil Aviation Conference (ECAC) – which brings
together the aviation authorities of the large majority of the Council
of Europe member states – the Parliamentary Assembly regularly takes
stock of the European civil aviation industry, an invaluable asset
vital to the development, competitiveness and sustainability of
the economies of the member states in the context of continuing
2. Air transport directly accounts for about 2.5% of the gross
domestic product (GDP) of the European Union, and around 8% indirectly.
It maintains over 3 million jobs and contributes more than €30 billion
to the region's trade balance. In normal times the airlines carry
some 40% of the European Union's imports and exports, by value,
and transport about 366 million passengers every year to and from
the European continent.
3. As may be expected, the 2008-09 recession has put the civil
aviation industry under severe pressure. According to the International
Air Transport Association (IATA), European airlines were the worst
hit in 2009, with losses reaching US$3.8 billion out of a world
total of US$9.4 billion, and a forecast US$2.2 billion net loss in
2010 out of a global total of US$2.8 billion. Yields have fallen
substantially and revenues are not expected to reach 2008 levels
until 2012 at the earliest. Several airlines have gone out of business
and consolidation of the industry is likely to continue. Among the
key reasons for the poor performance of European carriers were their
exposure to the decline in premium class long-haul travel, delays
in reducing capacity and the relatively slow economic recovery in
the region. This situation has not been helped by the disruption
of air traffic caused by the volcanic eruption in Iceland, resulting
in huge economic losses in general, and for the airlines in particular.
The Assembly considers that national and European civil aviation
authorities should better co-ordinate emergency responses to such
events in the future.
4. In addition to the decline in both passenger and freight demand
caused by the recession, the European airlines have had to face
difficult operational challenges such as tighter credit conditions,
the constant pressure to reduce greenhouse gas emissions, volatile
fuel costs and a European regulatory authority determined to liberalise
the economic environment in which the airlines operate. In this
context, and in view of the likely further consolidation of the
European airline industry through mergers and acquisitions, the
Assembly urges the European Union to show flexibility in its competition
5. The Assembly welcomes the progress made by the European Union
in rationalising the use and control of air space over Europe, in
particular through the development of the “Single European Sky”
policy, and emphasises the need to extend it to the wider Europe
through negotiations with Council of Europe member states outside
the European Union, including Russia. As a first step, the Assembly
calls on Russia to join the ECAC.
6. The Assembly also welcomes the increasing role of the European
Aviation Safety Agency (EASA) in harmonising European air safety
regulations. From 2012 the EASA will assume responsibility for the
rules governing the European Union's air traffic management and
navigation services, and from 2013 it will also oversee airport
safety procedures. The aim is to have a focused, comprehensive approach
to air safety management and to overcome regulatory gaps and duplications
by means of a single certification process. In due course, the EASA
will also assume the current functions of Eurocontrol, which will
in turn become operationally responsible for implementing the Single
European Sky. Once again, the Assembly urges the European Union
to extend this air safety regime to the wider Europe through negotiations
with Council of Europe member states outside the European Union.
7. The Assembly underlines the need to eliminate any distortions
in the economic environment in which the European civil aviation
industry operates, in particular with regard to taxes, charges and
in the financing of the air industry, including the subsidisation
of aircraft production and purchase. In this context, governments
should divest themselves of all financial interest in the airline
8. Although it seems that public resistance to full body scanners
now in use and planned at many airports may not be as high as expected,
questions are being asked about the human rights, health and cost-benefit implications.
The use of body scanners may infringe discrimination law if specific
or vulnerable groups are singled out and may contravene passengers'
right to privacy under human rights law. Moreover, doctors are concerned
to know what the health effects of exposure to these scanners might
be. In economic terms, full body scanners are very expensive to
purchase and maintain. The use of these devices will affect both European
airlines and their passengers: in Europe such security-related costs
are passed on to passengers, whereas in the United States security
costs are borne by the government. This represents a distortion
of competition. The Assembly calls on the European Union to seek
acceptable solutions to these problems.
9. The Assembly is concerned that the economic conditions and
operational airspace regulations that United States airlines enjoy
in Europe give them considerable advantages compared to the conditions
under which European airlines must compete in the United States.
It therefore urges the European Union to step up immediately its
efforts to equalise these conditions. European airlines should have
the same access to the United States market as American airlines
enjoy in Europe, notably in terms of investment and landing rights.
10. The Assembly welcomes the airline industry’s commitment to
improve fuel efficiency by an average of 1.5% annually up to 2020
and to stabilise carbon emissions with carbon-neutral growth from
2020, so as to cut overall industry carbon emissions by 50% by 2050,
compared to 2005 levels. This is to be achieved in part through
the introduction of new-generation aircraft and technical innovation
together with improved flying techniques and operations management.
The reduction will also be spurred by the introduction of global emissions
trading, which the IATA embraces, although it expects this will
add around US$5-7 billion a year to costs. In this context, the
Assembly welcomes the European Union’s ”Clean Sky” initiative and
urges it to study ways to prevent the perverse effects of emissions
trading, such as encouraging airlines to fly to Asia via Middle East