Saturday, November 15th, 2014
The term drone defines two categories of aircraft: unmanned aerial vehicles (UAVs) and remotely piloted aircraft systems (RPAS). The first group classifies the aircraft that flies automatically programmed, without having the assistance of a pilot, not even remotely. They are still unauthorised, both under ICAO and EU rules. The RPAS on the other hand, represent the drones controlled by a pilot from a distant location. The aircraft is not automated, having a pilot in charge at all times, representing the only type of drones that are authorised at the moment.
Drones have been subject to discussion for approximately a century, but from a rarity they became today’s reality. The most primitive form of a drone is described through the attack of the Austrians against Venice in 1849 when 200 unmanned balloons were sent with bombs in the Italian city. Although the concept does not meet the present definition of a drone, the idea was taken over and used in military actions after World War I and continued to be refined ever since, giving birth to a new eon of warfare.
Leaving aside military action, it is spectacular to see how innovative this concept began to be used in the last decades. Dull or dangerous activities have been taken over by RPAS that started to be used for civil purposes such as delivering mail; oil, gas and mineral exploration and production; commercial and motion picture filmmaking; disaster relief, scientific research or effective and timely application of fertilizers and insecticides at farms.
For the future, drone technology is expected to break records and by 2050 it is anticipated that a number of different aircraft categories will be operating in our service, as civil drones not only for monitoring infrastructure or fertilizing farms, but for the transportation of goods and people. The diversity displayed in size, performance and type that offers an immense potential for job creation and economic growth, transforms the market of drones into a key component for the aeronautics industry. From grams to more than ten tons, with speed levels of 1,000 km/h or with endurance records of months, RPAS have a wide range of options that leave space for an imagination without borders.
At the moment, the US and Israel dominate the global RPAS manufacturing. 1708 different RPAS are referenced around the world being produced or developed by 471 manufacturers around the world with 176 of them coming from Europe. The US industry research shows that following the first three years of RPAS integration in the national airspace, more than 70,000 new jobs are foreseen with an economic boost of around $13.6billion. In Japan, between 1993 and 2005 the number of RPAS operators was increased to about 14,000. In Europe150,000 new jobs are envisaged by 2050, excluding the operator services jobs. Before turning these figures in contracts, we need regulation!
The European Union is fully engaged in preparing all the necessary arrangements in order to allow the RPAS to take the skies, targeting as usual a safe, harmonised, cost effective and environmentally friendly setting.
On the 19th of December, 2013 the European Summit called for action to facilitate the integration of RPAS in the civil airspace starting with 2016. As soon as RPAS will reach the full potential and receive certification that they can actually integrate in the air traffic amongst traditional aircraft in non-segregated airspace, we will surely see them flying around.
RPAS operations are already authorised in civil purposes in non-segregated airspace by certain Member States but a number of key safeguards are not addressed in a coherent way due to the differences existing between the Member States. National rules have been developed in order to facilitate the use of RPAS (Czech Republic, Denmark, France, Germany, Italy, Lithuania, Sweden and the UK) but without mutual recognition.
Without European standards, to be developed by EASA in tight collaboration with the European Commission, Eurocontrol, the European Defence Agency and the European Space Agency, a real market of drones cannot come into sight.The current rules are coordinated by ICAO. There is even an article in the Chicago Convention about drones, giving ICAO jurisdiction, and its view is that it will allow drone operations only in the case of specific authorizations given by national authorities.
In April 2014 the European Commission decided it is time to set concise and rigorous standards for regulating the operations of civil drones. Safety, security, data protection, insurance and liability are the core features to be taken into account. For the reason that this emerging technology has a striking potential to be used in various domains, creating new jobs and seriously contributing to the economical growth of Europe, the aim is to create as soon as possible the right environment to sustain this technology and to become a global leader on the market. The intention expressed by the Commission was to create the EU regulation in early 2015.
SESAR Joint Undertaken (SJU) is in charge with the research and development (R&D) of the future ATM in the context of Single European Sky. It is therefore in charge with the progressive integration of RPAS technologies, which need further development and validation. The defined actions for RPAS will be integrated in the next European ATM Master Plan, allowing a clear evaluation of the progress. SJU will weigh up among other factors, the spectrum allocation and management issues, security protection against psychical, electronic and cyber-attacks, the human factors issues and the decision capabilities to ensure a standardized and predictable behavior in all phases of flight.
Unlawful actions are not to be left out of interest in the case of RPAS.RPAS are often used in military action; therefore these drones could be tempting terrorists, criminal or rogue states to use them as weapons. RPAS could potentially be blocked or ground control stations could be hijacked. Hence, the security vulnerabilities play a crucial role in the regulation process.
Fundamental human rights have to be carefully protected so that the right to a private and family life, as well as the protection of personal data has to be watched over when mapping, recording or surveillance purposes are in the balance.Although Europe aims for the highest safety standards, accidents are not excluded. In this case, a clear set of rules must be set up so that in case they occur, victims will be rightfully compensated for injuries or damage. The liable part has to be easily identified and third-party insurance regime shall meet appropriate requirements, as in the case of traditional aircraft.
The clear set of regulations that will be created by EASA are expected to be compatible with the ICAO standards. RPAS must provide a safe, secure, harmonised and cost-effective setting as the traditional aircraft market does.
As the former Vice-President of the European Commission, Sim Kallas mentioned, it is normal to have concerns about all aspects entailed in this process of innovation, but “if ever there was a right time to do this […] it is now”. Once the regulations will be put in place, aviation might climb the ladder of innovation like never before. We all agree the regulations are in need, thus we are thrilled to see them in place. Strict rules, severe controls and a clear framework will allow the RPAS to take over the skies. And as soon as this will happen, estimates show that in the next 10 years, the market of RPAS will actually represent up to 10% of the aviation market, which is the equivalent for €15 billion.
Wednesday, October 29th, 2014
The nominees for the new European Commission were proposed by the president-elect, Jean-Claude Juncker on 10 September 2014. The confirmations followed this month, on 22 October, as a result of the votes held in the European Parliament that gave quite a noteworthy support to the new European Commission, with 432 votes in favour, 209 against and 67 abstentions. The new Commissioners who are designated from the 28 member countries, including the President and the vice-presidents will occupy their new positions as of 1 November 2014, for a 5-year term.
Following the final decision, Juncker expressed his appreciation towards the democratic process that helped the team “cross the finish line”. The next step to be taken comes from the European Council that will formally appoint the European Commission. What we expect is to see a much more political orientation than in the previous Commission, as Juncker himself expressed that they are more than “just a bunch of technocrats”.
But let’s get down to more dynamic subjects. The new team did not cross the finish line in the same formula they started the race. Alenka Bratušek originally proposed as the Vice-President for the Energy Union. That was not well appreciated. Bratušek was the out-going PM of Slovakia, and showing all that is perceived to be wrong with the Europe project, self-nominated for the cushy EC role when she lost the election. She was roundly rejected and Slovakia had no option but to withdraw her nomination, replacing her with Violeta Bulc.
This nomination was considered rather unconventional- perhaps because she has a black belt in tae kwon do, and trained as a shaman. Therefore, although she could literally walk on fire, it was expected that she will have difficulties during the hearing for the Commissioner in the Energy Union. This might be why Juncker has thought of a strategic move that seemed to have worked!
Slovak Maroš Šef?ovi? of Slovenia was promoted to the Energy Union from his original home at Transport and Space and Bulc presented herself at the hearing for the transport committee, where she successfully managed to make herself heard. She was able to win over irritated MEPs by promoting a green agenda supported by her knowledge in the sector, as she has been the owner of an engineering company.
Based on this previous experience, she mentioned that she understands the importance of networks, but this only works with high quality infrastructure.
She was a true advocate for transportation, insisting that transport is the backbone of the economy, which is sometimes taken for granted. She promoted herself as the one who will try to change this attitude and to collaborate with the Parliament to bring up the field of transport to the right footing.
The principle that seemed to govern her priorities was interoperability, as transport should be connected at all levels; hence future plans in this area are foreseen. She emphasised a lot the importance of equal social conditions and the ageing factors and the load of female workers was discussed as well.
Other important topics raised by her, included the transport networks (TEN-T and CEF), funding for the transport sector, social dumping in the social sector, road safety, the 4th Railway Package and inland waterways.
What does all this mean? If she is true to her social dialogue rhetoric, there goes any hope of true reform for airlines, as any attempt to restructure will bog down in social dialogue and the selfish, expensive preservation of the status quo. Even the legacy carriers, not famous for wanting change will be able to change that. On the other hand, we were hoping for more enthusiasm on the Single European Sky sector, but we only heard succinct information about this topic. Would this be explained by the fact that she actually had only four days to put her thoughts together, thus we should expect more? We definitely hope so.
Wednesday, October 22nd, 2014
Traffic flow and the leading numbers in September
As a premiere for 2014, the average en-route delay per flight was below the monthly guideline value of 0.59 min/flight, at0.52 min/flight. The overall average en-route delay per flight in 2014 to date is 0.70 min/flt, which is well above the guideline value of 0.53 min/flight.
Compared to September 2013, September 2014saw an increase in traffic of 1.1%, remaining close to the baseline forecast.Although a slowdown in both April and September 2014 were registered, the slow recovery in traffic that dates back to April 2013 continues.
Regarding ATFM delays per flight, the average increased from 0.85 min/flight in September 2013 to 1.03 min/flight in September 2014. The main factors influencing this increaseare airport weather (29.5%), en-route ATC capacity (27.3%) and airport capacity (13.4%).
In comparison with September 2013, September 2014 sawen-route ATFM delays increase by 7.4% and airport ATFM delays increase by 42.7%. The average daily traffic delay in September fell below the levels from 2011 for the first time since May 2014.
Compared to August 2014, the delays from Nicosia ACC and Tel Aviv/Ben Gurion airport reduced significantly in September. Main factors for ATFM delays were adverse weather conditions that have impacted the operations in various airports and some ACCs.
Delays – causes and locations
- Unfavourable weather conditions:
- En-route ATC capacity issues:
- Airport ATC capacity issue:
En-route ATFM delays in 2014 are higher than the corresponding levels in2013:
- High en-route capacity (ATC) and en-route staffing (ATC) delays:
- Adverse weather which commenced in July continues to affect theen-route element of the network in:
- En-route disruptions due to the French ATC industrial action:
- En-route event delays generated by Warsaw ACC (PEGASUS 21ATM system implementation) and Langen
The crisis in Ukraine still has an evident impact on the traditional traffic flow, increasing the traffic in the neighbouring ACCs up to 10%. Another similar situation took place as a consequence of the closure of the Libyan airspace, which was extended to 15October.
Industrial action by Air France and Lufthansa pilots led to significant cancellations of flights, while the industrial action at ENAV, the Italian ANSP impacted the local operations in Karlsruhe, Maastricht and Reims ACCs.
What the industrial actions and indeed the weather show is that aviation is an ecosystem. One part impacts another. The French controllers strike called for more work in neighbouring centres, a fact somewhat glossed over by the French controllers.
Wednesday, October 1st, 2014
What do we learn from the fire in the ATM facility in Aurora, near Chicago? There is no doubting the impact on the traffic and the disruption. So once again we can show that ATM is important, and perennially under-appreciated but what a way to do it.
There might be three things we can take from the incident. First, this was not a ‘terrorist attack’ it was a trusted contractor. What can we do to stop the disgruntled? Perhaps the real answer is to build resilience into the system to be able to react and respond as well as possible when the unimaginable becomes the reality.
Secondly, the resilience issue has to be thought through. It is not just having a complete second set, but rather the ability to switch and to address contingencies. With infinite money we could have an infinite amount of spare kit, but that way madness lies.
Finally, and perhaps most importantly, the work the controllers and the FAA generally did to patch things, to rearrange sectors and airspace to allow other centres to take over was both fantastic and completely impossible in Europe. What a badge of shame.
Friday, September 26th, 2014
Every month Eurocontrol publishes the results of the work of the Network Manager – currently housed in Eurocontrol. It as good as it gets for working out what is happening to aviation in Europe.
Traffic flow and the leading numbers in August
Due to overflights and growing internal flightsan increase of 2.4% in traffic for August 2014 compared to August 2013 was registered. Given that overflights and internal flights define all the flying that is possible, it is perhaps not surprising that this upward trend was above the high forecast.
The highest traffic increases in August 2014 were recorded in Istanbul Sabiha Gokcen, Athens, London Luton, Brussels National, Lisbon, Ibiza, London Stansted and Istanbul Ataturk
Germanwings, Aegean Airlines, Vueling, Wizz Air, Pegasus, Norwegian Air Shuttle, Qatar
Airways, Sunexpress and Monarch Airlines were the operators with the highest traffic growth.
Having approximately 500 additional flights per day, Turkey and Greece have placed themselves as leaders in the local European traffic network, closely followed by Italy, Spain and the UK.
It seems like the traffic in moving south-est during summer, due to the popular vacation destinations. UK’s place could be explained by its influential position in making better connections for more exotic preferences and Brussels is a well known important business area where the flow is constantly high.
Low-cost services have recorded a sustained growth of 6.7% in August 2014, while the traditional scheduled and all-cargo segments have increased by 1% as compared to August 2013.
The most significant decline in traffic rates was registered in Lyon Saint Exupery, Bergen
Flesland, Praha Ruzyne, Edinburgh, Marseille Provence and Warsaw Chopin airports.
The operators that have registered the highest traffic reduction compared to August 2013 were Lufthansa, Flybe (affected by fleet downsizing), Aeroflot Russian (affected by Ukrainian crisis) and LOT Polish Airlines.
The sad event of the flight MH17 on 17 July accelerated the ongoing traffic decline for Ukraine, counterbalancinga positive trend in countries like Bulgaria (+31%), Turkey (+27%), Romania
(+22%) and Slovakia (18.6%).
The traffic in Ukraine has decreased by 252 flights daily in August, a fall of 41% compared to August 2013. The sensitive situation of Ukraine has influenced a decrease of the overall traffic of 55% in the country, while reducing the air traveling rates in neighbouring countries (e.g. Moldova: -48%) as well. These changes have had a significant impact outside Europe as well, with a decrease of almost 7% to and from the Russian Federation as compared to August 2013.
As opposed to low cost carrier flights, charter was the weakest of the market segments, registering a decrease of 1.9% compared to August 2013.
Air Traffic Flow Management (ATFM) delays:
Compared to August 2013, August 2014 recorded an increase of 98.1% of total ATFM delays. 89% of the delays are: en-route capacity (ATC) (36.8%), airport weather (16.8%), airport capacity (15.2%), en-route weather (10.3%) and en-route staffing (9.8%).
The rest is industrial, which is a nice way to say ‘strikes’ by staff.
Perhaps what this huge percentage number shows is that we are working at the margins. There are few AFTM delays, so a few minutes here or there had a distorting impact on the percentages.Here is what it looks like:
Athens ACC recorded the highest number of delays in August mainly due to en-route staffing (ATC) issues and en-route capacity (ATC). 62.7% of all the ATFM delays in Europe can be attributed to en-route delays, most of them being caused by ATC capacity, weather and ATC staffing issues.
As a result of airspace restrictions caused by Israeli military operations, the highest average en-route delay per flight was recorded at Nicosia ACC, which was closely followed by Athens ACC. It experienced en-route delays caused by en-route staffing (ATC) and en-route capacity (ATC) issues.
Out of the total August ATFM delays, 37.3% were attributed to weather and airport constrictions
The highest airport capacity (ATC) delay registered was caused by a security issue in Tel Aviv/Ben Gurion. Weather disruptions have particularly affected IstanbulAtaturk, Frankfurt, London Heathrow and Istanbul Sabiha Gokcen airports.
Based on the data collected by the Central Office for Delay Analysis, that covers 60% of the commercial flights in the ECAC region for July 2014, the average departure delay per flight was registered at 12.5 minutes per flight. This represents an increase of 26% in comparison to the 9.9 minutes per flight registered in July 2013. The en-route ATFM delays were counted at 0.6 minutes per flight. In August 2014 the percentage for both early and late departures increased compared to July.
Due to the potential eruption of the Bárðarbunga volcano, between 24 and 25 August 2014 the NM was on a “pre-alert” position and the aviation status was raisedto red.
In August 2014, the NM saved 888 minutes of daily delay at a cost of 141 extra nautical miles, proposing alternative routes to an average of 36 flights per day, out of which 21 were accepted. This is again proof that an optimized network (time saving) is not necessarily the sum of optimized flights (shortest route).
Sunday, September 21st, 2014
The Scottish referendum has been run and determined, but so far, it seems to me that there has not been enough analysis of the impact of the decision on aviation. This is remarkable – normally there is no end of punditry that we have to wade through – normally, everything has to have an impact on aviation. That is the price we pay for thinking the world revolves around us I guess.
So, what is the impact? Frist, given that the very first thing that new governments seem to want is a new flag and a national carrier, we lost out on the chance to have a new airline. Not British Caledonian, just Caledonian perhaps. Given that what we want is less airlines, not more, that is a good thing, but a good thing that will upset all the consultants and brand designers and advisors and experts that will miss out on healthy retainers.
The Scottish airports will lose out as well. An independent Scotland would clearly need flash airports. Could the revival of the revival of Prestwick have been far behind?
On the up side, and making one possibly heroic assumption, maybe at long last we would have had one, only one, genuinely functional Air Traffic Management Functional Airspace Block, or FAB. If NATS continued to provide ATM for all parts of the British Isles (except, of course, the Irish part of the British Isles) we would have what the Commission has been asking for – cross border sectorisation and a real live FAB with single management and single operations.
The heroic assumption of course, is that the Scottish government did not decide that its airspace should be managed entirely by its very own ANSP. You would not want to bet against that happening of course…
Monday, September 15th, 2014
Once a year, we like to have some fun with the words that we all use. Nothing is a more fun way to have fun playing with words than to do cryptic crossword, so this is your chance! Let us know how you get on…
1 Muddled along to Boston. (5)
4 Look, no time within to measure speed. (4)
7 Aviator, tai-less, arranged aircraft. (4)
8 Indian ruler follows British airline as if mad. (7)
12 Backward leg and the French airport in Berlin (5)
15 Area controlled by Christmas tree. (3)
16 Crazy cricket, gnu and rat delivers food to aircraft. (8,5)
20 Initially over the counter at Bol. (3)
21 Taking note of sovereign after reversing vehicle. (8)
22 Gosh, a rabbit at Chicago. (5)
23 Give advice to airmen, but never before midday. (5)
25 Graduate airline. (2)
27 Polish airline spotted in flotilla. (3)
28 Edith loses 3.14 but finds her national airline. (2)
30 South American call signal. (4)
31 Fighter sounds like a big storm. (7)
33 Half bake a Korean airline. (2)
34 Con-trail! (7)
35 Greek character sends signal. (5)
1 Factor to get on board. (4)
2 Kit allows speed change. (4)
3 Surveillance agency at beach resort in Queensland. (3)
5 Sounds like a story at back of aircraft. (4)
6 Semi-arid Argentinian carrier. (2)
9 Two blokes claim son at UK airport. (8)
10 Take away any tangy Thai. (2)
11 No Japanese fighter. (4)
13 European decorating style, less a century, but with an initial night time reading list, defines European agency. (11)
14 Presidential airport. (3)
16 Angry side wind. (5)
17 Mum carries Mexican food to airport near Seattle. (6)
18 Ego-less road rage? Mad to find traffic. (5)
19 Three new pieces of silver at Geneva. (8)
24 Sounds like you should pay attention to the exchange of goods. (6)
26 Warm? The Spanish call signal. (5)
29 Increasingly, animal instinct supports an airport in Fiji. (4)
30 Slack American airport. (3)
32 Initially passenger builds new way to navigate. (3)
Monday, August 25th, 2014
The European Space Agency’s Rosetta space probe is now in close orbit with comet 67P, perhaps better known as the Churyumov–Gerasimenko comet. Other probes have done fly-pasts. Rosetta has taken that one step closer – it is now moving at the same speed as the comet itself and all going well, it will land on the comet. That is a remarkable piece of space engineering, more than likely involving rocket scientists, but it raises one very simple question: If we can land a probe on a comet in deep space, what about aircraft on runways?
The answer, of course, is that we can, and we are starting to do so. By definition, en-route ATM is remote from the area being controlled so it was only natural that we can do it for remote airports too.
Perhaps the real question is why do we continue to think that we need towers at all?
ANSPs, airport owners and airline operators focus on costs and efficiency at all times, so finding safe, efficient and lower cost options is always of interest. High definition images, state of the art video density, object tracking and alerting, night vision and operative control under low visibility conditions are set to reinvent ATM at airports.
That might be just as well, because the airports have shown that they are more than happy to reinvent ATM at airports too. And, make it more competitive. Aviation Advocacy supports increased competition in air transport, so this is a Good Thing.
The UK CAA published an opinion last year that said that the Commission’s SES-driven requirement to put towers above a certain size out to tender was back-to-front. The risk involved in changing the operation of the towers at larger airports was too great, it decided. Only the smaller towers were suitable. The Aviation Intelligence Reporter covered this at the time.
Gatwick did not get the memo. It has announced that from October next year, DFS will operate the Gatwick Airport tower. Gatwick is legendary in ATM circles: a single runway that handles a world record 55 movements an hour. DFS is also legendary in ATM circles: the German ANSP that tried to purchase a share in NATS, only to be defeated by the superannuation fund of the UK’s academics.
There was considerable angst at the time of the NATS sale about what is called ‘the Daily Mail effect’, or what the notoriously rabid UK tabloid newspapers would say about a German entity controlling any part of the UK sky. A more rational concern was the risk of an outcome that saw the most liberal, privatised ANSP in Europe sold into the hands of one of the least liberal. The German Constitution, apparently, prohibits the privatisation of DFS. Apparently it does not prohibit DFS acquiring privatised ANSPs.
The announcement of the transfer was pushed out of the papers, even the tabloids, by more newsworthy events. The day the announcement was made coincided with the shooting down of MH17. What hope did faux outrage and a chance for headline writers to show off their particular skills have over Russian perfidy? The fact that it was a cost saving move from Gatwick – and the savings are reported to be considerable – with the promise of lower charges to airlines would have been beside the point on any other day.
Picking up on the CAA point, the airlines that serve Gatwick are not exactly being overwhelming in their support. Publically, they are saying nothing. Privately, they are looking for risk mitigation and contingency plans. Or, to put that in terms that the Daily Mail would not understand, they are more worried about preserving their operations’ reliability and resilience than refighting the Battle of Britain.
Tuesday, August 19th, 2014
Did this strike anyone else as strange? On 27 July 2014 Gatwick Airport dealt with hundreds of passengers whose luggage failed to be delivered on time.
The Gatwick`s spokesman mentioned at the time that the three hour delay was caused by “resourcing issues” of the baggage handling company Swissport. That would be the airlines’ outsourced baggage service supplier Swissport of which we speak. Baggage handling is one of those things that airlines are required to provide, along with transport and oxygen, when you buy a ticket (and include the fee for extra baggage etc…). Some airlines do it themselves, others get suppliers to do it on their behalf, but it is an airline obligation. The clue there is in the words “on their behalf”.
Arguably, the regulations do not allow airports to be involved in the process of unloading aircraft, but nevertheless Gatwick pulled out all stops and assisted with the transportation of the baggage to the terminal and the unloading of the bags on to carousel belts. Up to 60 extra staff was provided by Gatwick to improve Swissport’s service and to clear out the luggage backlog. The passengers were sent home and delivery of the baggage to their home addresses arranged. A promise of a maximum 48 hour delivery was made.
Swissport has reported that this was an exceptional case caused by “off-schedule” arrivals and that there is no need for concern on the following weekends. Nonetheless, Gatwick has announced that they will continue monitoring Swissport’s performance and offer help as required for the rest of the summer.
What is going on and what does this tell us?
A few days after the incident took place, the Gatwick spokesman said it was about the high standards the airport is demanding. In other words, it was about reputation and it was about service. This is nothing more or less than Gatwick knowing that their reputation was on the line. Ask yourself; is that the response of a fat dumb, needs-to-be-regulated monopoly service provider? Oh no, it does not. That is the response of an entity that understands the commercial issues at stake.
It puts into context the contention of the IATA study of airport competition. You may recall, and we covered this in detail in our Aviation Intelligence Reporter at the time, that the IATA study is in response to the ACI study which claimed that airport competition was real. ACI’s Airport Competition report shows that airports are in the situation of competing with one another in order to draw the traffic they want, as both passengers and airlines are footloose. Aviation has been liberalised, producing higher flexibility and a more open market for airlines and passengers. We should rejoice in that.
Maybe this does not fit IATA’s model because the airlines involved are not IATA members?
Saturday, November 30th, 2013
Eastern Europe Tries to Think Business Aviation Outside its Box
If you are interested in a broad, nuanced view of aviation in all of Europe, you will have appreciated the annual Central Europe Private Aviation (CEPA) conference in Prague in late November. It had over 200 aviation specialists and industry stakeholders in wide-ranging operational, commercial and regulatory discussions. It was a showcase for the dynamic aspirations of the ‘economies in transition’ both in, and beyond, the east of the EU.
One interesting feature of CEPA is that its agenda extends to include commercial airlines. This is an important gesture towards finding common ground between the two sectors. Too often, business aviation suffers from isolated analysis. At best, this relegates it to an out-of-category ´general aviation´ sectors, as the EU refer to it. Worse, it probably encourages the perception of its niche, luxury character, and thus distinctive from the mainstream transportation business.
Of course, business aviation is different from the scheduled airline sector – not least it´s an unscheduled and premium product. But it is surely still about business. Its operators need to be financially viable, its passengers fly, for the most part, for business purposes, and from the most recent study of the economic value of business aviation, the contribution of the business aviation sector to European GDP, in terms of direct and indirect revenues, is an annual €20 billion.
At least €1 billion of that is generated from Central and Eastern Europe. Whilst business aviation activity collapsed in Western Europe during the 2008-2012 recession it surged in Central, East and South-East Europe, with Poland, Russia, Ukraine and the Czech Republic seeing double digit growth. Since 2000, the CEPA territory fleet has grown by a factor of ten. Just in terms of charter activity, that represents a €500 million market. Annual MRO revenues are also in the region of €300 million.
So Central and Eastern Europe is no small fry when it comes to European business aviation. Too often overlooked for the larger leading EU markets, the region´s importance is getting justified, if belated, promotion through CEPA. But now it finds itself in a bit of a rut. While there has been impressive growth in the last decade, 2013 paints a less encouraging picture. This year activity has fallen 6%, and previous growth stars such as Russia and Poland are seeing big declines in flights.
No doubt the slump owes something to the relative spike in 2012 activity when Poland and Ukraine hosted the Euro Football championships. But the underlying economic support to business aviation has darkened in the meantime, at least for Eastern Europe and Russia. And economically, the region remains highly dependent on the Euro zone´s fragile recuperation. The industry also has basic problems, with under-developed infrastructure and shortage in resources dedicated to business aviation, as well as reputedly widespread illegal charter activity.
If there is some truth to the opinion that business aviation is not always 100% business-oriented, it is in its seeming inability to respond to a slump. This is as true in Eastern Europe as it is in the rest of the market. Faced with an obvious decline in customer demand, its stakeholders, in much of the discussion at CEPA, did not seem to be directly concerned with solutions. One rather obvious in particular: how should they go about attracting more passengers onto their aircraft?
Rather, the main topics of debate tend to orientate around technical issues concerning aircraft import and registration. A particular concern is how to reduce taxes and simplify transactions. In other words, there was a strong interest in facilitating aircraft purchases. This tells you that the customer of interest is not the charter passenger but the aircraft purchaser. In turn, this radically reduces the addressable market to the fabled few HNWI (high net worth individuals) sufficiently wealthy to own an aircraft. It ignores the thousands of individuals, entrepreneurs and businesses who make up the charter passengers which float the fleet.
Perhaps the reason the industry is not able to reach out to this audience is that it lacks the scale to market an effective consumer brand. Or it may be that its executives´ operational mentality obscures the commercial reality. But that reality is now urgent. Unless business aviation operators can work out how to appeal to users, not just owners, its growth potential is limited. It is not enough to base future prospects entirely on the impressive growth curve in the tiny number of super-wealthy would-be owners.
This brings us back to the airlines. To its credit, CEPA´s agenda encouraged its delegates to debate potential for integrating commercial and business aviation services. A number of such alliances were cited: Delta, Korean, Singapore and Lufthansa all offer their premium customers jet charters, operated by their business aviation partners.
These are relatively tiny ventures and the consensus is that such opportunities are very limited. But it is not just operational collaboration for which biz-av should look to airlines for inspiration. More broadly, it should look to see how the best airlines have survived and even prospered through the recession. There are lessons to learn.
Those that have prospered most are of course the LCCs. We are all familiar with their competitive advantages: homogenous fleet, scaled-up financing, aggressive marketing, no frills on-board service, high rates of utilization, online distribution… Although business aviation offers a very different experience to easyJet, many of the same efficiencies are potentially available. But whether through lack of imagination or simply because the operators´ traditional business model is inflexible, the lessons are ignored.
Business aviation should not only seek to imitate successful innovation in commercial aviation, it should also exploit the gaps opened up by its scheduled counterpart. Over the last eight years in Europe, this network has provided zero net growth in flights. In fact the huge growth in LCC activity has masked equally substantial declines in the regional networks. As this short-haul coverage recedes, biz-av should have an opportunity to appeal to customers who are increasingly left stranded without a direct connection.
Richard Koe, Aviation Advocacy