Roger Estefors, member of the Working Group on Transport and Regional Airports, shares some reflexions following the new proposal made by the European Commission for an aviation strategy in Europe:

The entire aviation sector in Europe has gone through a transformative process from 1986 until 1992 when the Third Aviation Liberalisation Package was agreed on. The process in itself was a culmination of liberalisation steps to create a single internal European market in aviation across the range of economic activity.

The process in itself meant a tumultuous time for Europe’s state-controlled airlines to transform themselves into actors in a free market with access to all Member State’s airports. The process covered a period when previously state owned airliners, so called Flag Carriers (FC), transformed into alliances alternatively merged with other companies or simply disappeared from the market. The period also characterised a shift in the structure of the passengers and their need of alternative carriers.

This opened up a market for existing small companies or newly established companies to adopt a North American concept of low service and ticket price approach. The transformation into an open market enabled a much broader population to travel by air due to the formation of a variety of new airliner named Low Cost Carriers (LCC). The dawning era of the LCC operators opened a window for European regions, looking for possibilities to increasing their connectivity to attract tourism, support the local industries and other stakeholders. More than 25 % of all the passengers within the EU are today travelling with LCC airliner registered in the EU.

The establishment of the LCC companies have over time created some problems in connection to state aid questions and regional efforts to attract LCC companies. New airports have been constructed or old ones have been modernised or enlarged in conflict with EU Guidelines and neighbour airports. The legal handlings of these abuses or mistakes have mostly been manageable by the Commission.

The presentation of a New Aviation Strategy for Europe gives a good opportunity to make reflexions over the difficulties politicians struggle with when it comes to questions within an international market characterized by fully state controlled players outside EU on one hand and on the other hand EU based private or state owned players acting within a free home market with access for non EU players flying in and out of EU.

In the documents that relate to the importance of the EU aviation sector, the number of employments directly related to the aviation sector is estimated to somewhat between 1.4 and 2.0 million jobs. The over all multiplying effect indicates that approximately 5 million jobs exists as a result of the aviation sector.

One of the reasons to launch a New Aviation Strategy is the ambition to keep all the jobs associated to the Aviation industries and act in a way that ensures growth and new jobs. One obstacle can be found in the debate concerning state aid which leeds to unfair competition, primarily from the Gulf carriers, such as Emirates, Etihad Airways and Qatar Airways. The disturbance in the market and the risks involved affecting the conditions for the European aviation industries are officially outspoken by the Lufthansa Group in terms of ”The aviation policy of the UAE and Qatar are true game changers, putting capacity in the market at prices that airlines working under normal market conditions cannot reasonably match. This has led to a radical shift of market shares and connectivity from Europe to the Gulf and this process has only started” The problem at hand is not exclusively related to the Gulf Carriers. New destinations and other competitors are in the stage to move forward. The problem requires a solution that inherently is a problem.

From a regional perspective, it is apparent, that significant disruptions in the destination network for EU airliners caused by unfair competition indirectly harms the prospects for maintaining acceptable connectivity for the regions.

To know more about the AER working group on transport and regional airports, do not hesitate to contact Johanna Pacevicius, policy and knowledge transfer coordinator.

Article by Roger Estefors.

Roger comes from Vasterbotten (SE) and is a member of the Working Group on Transport and Regional Airports, within the AER Committee for Economy and Regional Development