EU Commission Confuses Skies and Makes Everyone Sorta Happy

The European Commission has announced a new Aviation Strategy “focused on improving connectivity,” which attempts to appeal to so many separate interests, that it has managed to make often opposing groups, including the U.S.-based Fair and Open Skies Group happy, for now.

The new policy promises prosperity for all aviation stakeholders, saying:

“The proposed initiatives will provide the appropriate framework where all actors of the EU aviation sector can prosper, for instance by profiting from new business opportunities.”

On Open Skies

Perhaps the best example of how the language of the new Aviation Strategy document has confused long-standing debates in the aviation sector— both in Europe and abroad—are the reactions of Airports Council International—Europe and the U.S.-based Fair and Open Skies Group.

First, the reaction of ACI Europe:

Olivier Jankovec, Director General of ACI EUROPE said, “The Commission has gotten it right — taking stock of the increasing strategic relevance of air connectivity for our economy. What it has put on the table today is a commendably pragmatic approach — one that recognises aviation growth as a key enabler of the EU’s wider growth and jobs agenda.”With this new aviation strategy, the Commission is also moving towards a less airline-centric and more consumer-centric aviation policy. In this regard, ACI EUROPE fully supports the ambitious plan to negotiate aviation agreements with the EU’s main trading partners to secure additional market access opportunities under conditions ensuring fair competition.

Jankovec commented, “We need more open skies agreements beyond Europe. This is essential for airports to attract more air services, develop their route network and improve the connectivity of the communities they serve. Ultimately, this is also about avoiding the marginalisation of Europe and supporting its global hub positioning. Closing markets and resisting change has never been a successful business strategy — and it rarely does any good for consumers.”

The US-based Fair and Open Skies Group reacted with the following:

Today the European Commission released a new aviation strategy, which includes a commitment to levelling the playing field for EU airlines. In the paper, the Commission recommends important mechanisms to address airline subsidies and unfair practices that have a ‘significant negative impact on the competitiveness of the EU aviation industry.’

In response to today’s announcement, Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies, released the following statement:

‘We commend the European Commission for putting in place strong safeguards to protect the competitiveness of EU carriers and the aviation industry as a whole. The global aviation market is highly competitive and when some governments, such as the United Arab Emirates (UAE) and Qatar, are unfairly propping up their state-owned carriers with enormous subsidies, it distorts the market and harms domestic airlines around the world and their workers. Here in the United States, our aviation industry and the hundreds of thousands of workers who support it cannot afford to wait; it is time for the Obama administration to open talks with the governments of the UAE and Qatar to enforce our Open Skies agreements.’

It’s almost like the European Commission had two separate meetings and came to two completely different conclusions on Open Skies agreements.

But the citizen’s Q&A released by the Commission could explain why this confusion.

Q: What measures does the Commission propose to safeguard fair competition in EU external aviation relations and reinforce the competitive position of the EU aviation industry?

A: The Commission supports the objective of ensuring fair and open competition in the aviation sector by:

Promoting sound principles of competition enforcement in the Bilateral Air Services Agreements; Promoting Comprehensive EU-level air transport agreements, ensuring fair and transparent market conditions; Considering new measures to address unfair practices from third countries and third country operators.

So the Fair and Open Skies group is right about what the Commission said. Except:

Q: How will European airlines benefit from the Strategy?

A: Through new comprehensive EU-level air transport agreements, airlines will be able to access new markets, new business and investment opportunities, which ensuring fair and transparent market conditions. The Commission will also issue interpretative guidelines on the application of Regulation 1008/2008 on the ownership and control of EU airlines to bring more legal certainty for investors and airlines alike.

And, from the Commission’s press release on the new Aviation Strategy for Europe:

Today the European Commission adopted a new Aviation Strategy for Europe, a milestone initiative to boost Europe’s economy, strengthen its industrial base and reinforce its global leadership position. These are three core priorities of President Jean-Claude Juncker, on which the Strategy will deliver, by ensuring that the European aviation sector remains competitive and reaps the benefits of a fast-changing and developing global economy. A strong and outward-looking aviation sector will not only benefit businesses, but also European citizens by offering more connections to the rest of the world at lower prices.

And:

The new Aviation Strategy for Europe includes:

A package of requests to negotiate EU-level Comprehensive air transport agreements with third countries, to ensure the EU industry has the opportunity to be where the growth is.

Besides which, the number one aviation strategic priority of the Commission, according to the Commission’s press release, is:

1. Place the EU as a leading player in international aviation, whilst guaranteeing a level playing field. The EU aviation sector must be allowed to tap into the new growth markets. This can be achieved through new external aviation agreements with key countries and regions in the world. This will not only improve market access, but also provide new business opportunities for European companies and ensure fair and transparent market conditions based on a clear regulatory framework. These agreements will also provide more connections and better prices for passengers. Global connectivity is a driver of trade and tourism, and directly contributes to economic growth and job creation.”

Even the EU Commissioner for Transport, Violeta Bulc, who has previously called for more stringent review of the competitive implications of Gulf carrier subsidies, had this to say:

“European aviation is facing a number of challenges and today’s Strategy sets out a comprehensive and ambitious action-plan to keep the sector ahead of the curve. It will keep European companies competitive, through new investment and business opportunities, allowing them to grow in a sustainable manner. European citizens will also benefit from more choice, cheaper prices and the highest levels of safety and security.”

At present, the primary entities investing in European airlines are Etihad Airways and Qatar Airways.

Of course, Bulc’s comments leave open the possibilities of other third-party investments. Perhaps we’ll see more investments like Delta Airlines’ investment in Virgin Atlantic. But, for now, the primary investments between North American airlines and European are joint ventures. Bulc seems to welcome any of these investments.

The Single European Sky also fell into a vague lingo trap.

While the Commission touted SES as essential to future growth of the European aviation sector, the Commission’s Q&A was unclear on what specific actions will push the Single European Sky forward.

“In many cases the right initiatives are in the pipeline already — such as for instance the Single European Sky. The Aviation Strategy therefore does not only come with new legislative and non-legislative proposals to enhance the competitiveness — it will build additional momentum for implementing measures which are already on the table.”

Momentum is welcome, but even ACI Europe called the Commission out on this non-committal answer:

While Europe’s airports support the on-going efforts of the Commission to tackle congestion and capacity constraints both in the air and on the ground, ACI EUROPE noted that decisive action on these issues rests with Member States.

In this regard, Europe’s airports share the frustrations of their airline partners over the lack of progress in the implementation of the Single European Sky. They are also deeply concerned by the lack of proper long-term national strategies to address the looming airport capacity crunch. While Europe’s airports are still waiting for the adoption by the Council of Transport Ministers of a revised Slot Regulation, this can only be a short-term fix—as it is about managing congestion, not addressing it.

Therefore, ACI EUROPE calls on the Commission to develop a more ambitious EU strategy on airport capacity — including the adoption of airport capacity targets for Europe aligned with the Single European Sky.

The Skies Are Not the Limit

These are only a two of the vagaries in the new Aviation Strategy document, which could complicate the same progress for the aviation sector that the Commission says it would like to encourage. There are also confusing stances on matters like aviation safety and passenger rights, plus dialogue on digital identity documents and drones.

The firm commitments that did come about were that more meetings will follow, and further studies are funded.

According to the Commission’s Press Release:

The European Union has planned to invest €430 million[1] each year, until 2020, in the Single European Sky ATM Research (SESAR) project. The timely deployment of SESAR solutions can potentially result in the creation of over 300,000 new jobs. The deployment and optimisation of information and communications technologies are also particularly relevant for airport capacity, performance and quality of service.

As the Q&A explains:

Q: What are the next steps for the aviation strategy?

A: In the course of December 2015, EU Commissioner for Transport Violeta Bulc will present the Aviation Strategy to the European Parliament and the Council of the EU.

The Aviation Summit organised on 20 and 21 January 2016 under the Dutch presidency will be a good opportunity to gather the first reactions of the stakeholders.

On the basis of these discussions, the Commission will assess how implementation should proceed over the course of the current mandate. Some actions—such as the evaluations of existing legislation—can move ahead without delay. Others will take the form of Commission proposals and therefore be subject to normal consultation and decision-making procedures.

So, Europe, grab your cocoa and biscuits, sit on your comfy chair, and put your feet up.

The Commission is handling matters. This could take a while.

Leave a Reply