Europe’s proposed ’open and connected aviation‘ policy path to industry competitiveness

The European Commission says it is delivering on its ambitious ‘Aviation Strategy for Europe’ by adopting a series of measures to further support open and connected aviation markets in the European Union and beyond. These initiatives aim to safeguard competition and connectivity in aviation, facilitate investments into European airlines and enhance the efficiency and connectivity of European skies.

It is believed that this outlook will reinforce the competitiveness of European aviation, which is a strong driver of job creation, economic growth and trade. Put in simple terms, open and connected aviation markets generally offer better value flights to a greater choice of travel destinations worldwide.

The vice president for energy union, Maroš Šefčovič says the proposals aim at “maintaining Europe’s leadership in international aviation”, as well as at improving connectivity and airspace efficiency. “A strong and sustainable European aviation sector is essential to support the EU’s economy and climate goals,” he says.

The latest ‘Open and Connected Aviation’ package includes four initiatives, which deliver on two core priorities of the Aviation Strategy for Europe adopted by the Commission in 2015. To maintain leadership in international aviation, the Commission is therefore proposing a new tool to ensure that EU airlines can compete on the basis of equal opportunities and connectivity can be safeguarded.

While, flying to or from the EU, all air carriers are granted the same rights, but this is not always the case for EU airlines when operating outside of the EU. In the absence of international rules, EU airlines may be subject to practices affecting competition. European air connectivity in international air transport is equally dependent on foreign and EU airlines, but the Commission will now “take appropriate action, should certain practices put the EU’s connectivity at risk”.

Alongside this, the Commission is adopting guidelines on the ownership and control of EU airlines. In order to grow and thrive in a competitive environment, EU airlines also need access to investment, including foreign investment and by bringing more clarity and certainty to investors and airlines alike, it hopes its new guidelines “will facilitate investments and help create new jobs”.

Elsewhere, the Commission is inviting Member States and aviation stakeholders to consider a number of good practices to ensure air service continuity in the event of industrial action. These practices do not question the fundamental right to strike, but rather aim to improve service continuity and minimise disruption to the European network for airlines and passengers.

Between 2005 and 2016, more than 243,000 flights were cancelled due to industrial action in Air Traffic Management, affecting around 27 million passengers. The fragmentation of European Skies is estimated to be responsible for €3 billion of extra costs a year and around 50 million tonnes of additional CO2 emissions.

The Commission is also adopting guidelines on the existing rules regarding Public Service Obligations in aviation which will make it easier for national authorities to address connectivity gaps, better serve the needs of local communities and contribute to their wealth.

“We want to ensure that Europe remains a leader in international aviation, well connected to fast-growing markets, with efficient European skies. The success of European aviation is based on open and connected aviation markets. Our actions should deliver concrete benefits for passengers, workers and the aviation industry,” says European commissioner for transport, Violeta Bulc.

Air travel has substantially increased since the creation of the EU’s Single Aviation Market 25 years ago. The number of daily flights has increased from less than 10,000 in 1992 to around 23,000 in 2016. In addition passengers now have access to more destinations. Today there are around 7,400 routes compared to less than 2,700 in 1992.

Therefore, aviation is crucial for the European Union. It creates jobs, drives economic growth facilitates trade and allows people to travel. European aviation represents 26% of the world market, contributing €510 billion annually to Europe’s Gross Domestic Product, and supporting 9.3 million jobs in Europe. In 2015, over 1.45 billion passengers departed or arrived at EU airports.

This is why the forthcoming Brexit discussions will be critical to the future of Europe’s aviation strategy as the United Kingdom (UK) continues to be the dominant nation in terms of air transport across Europe. While the mature nature of the UK market means its total share of European departure capacity has declined from 16.3% in 2007 to an estimated 13.4% this year. It is still the largest country in terms of aviation capacity with more than 174 million departure seats scheduled from and within the UK in 2017. This total has grown each year since 2012 with a 4.8% rise in 2015 and a notable 7.3% growth in 2016.

According to published schedules from OAG, a 4.8% growth in UK capacity is also forecast for 2017, slightly below a 5.9% predicted average rate across the European industry. The fastest growing European markets in 2017, based on published schedules for 2017 comprise…

  • Faroe Islands (+36.7%);
  • Iceland (+31.0%);
  • Bosnia and Herzegovina (+27.5%);
  • Bulgaria (+25.5%);
  • Romania (+24.5%);
  • Georgia (+24.2%)

Meanwhile, the following will all deliver predicted double-digit capacity growth.

  • Malta (+17.5%),
  • Ukraine (+16.7%);
  • Moldova (+14.9%);
  • Montenegro (+14.8%);
  • Belarus (+14.7%);
  • Croatia (+14.7%);
  • Slovenia (+14.7%);
  • Luxembourg (+14.6%);
  • Portugal (+14.3%);
  • Poland (+14.1%);
  • Czech Republic (+13.6%);
  • Armenia (+12.6%);
  • Estonia (+11.9%);
  • Macedonia (+11.4%);
  • Albania (+10.6%)

Only two nations are currently expected to see a decline in departure capacity in 2017, based on current published schedules: Slovakia (-2.2%) and Denmark (-1.8%).