Aviation Intelligence Reporter

Latest Aviation Intelligence Reporter

The Airports Package: Ignore your partner for the Self Interest Tango

Across Europe, privatisation and partial deregulation have created a robust and competitive private market for air travel in the place of the old, government planned system. Arguably consumers have never had it so good. Yet airport landing and take-off slot allocation remains unreformed and seemingly, unreformable. Grandfather rights have encouraged inefficient slot utilisation by airlines, thus stifling airline competition and airports’ revenue growth. The European parliament has demanded reform, airports have demanded reform and the European Commission now realises that its Single European Sky reforms also require a complete rethink.  However, airlines and other vested interests continue to join forces to resist significant change. Their self-interested argument, camouflaged as altruistic, is that further obligations to ‘use or lose’ slots would, for example, force charter airlines out of business, denying the consumer their preferred means of leisure travel. Does anyone have the mettle to push through a genuine reform to slot management?

Business Aviation Finance: Money’s too tight to mention

Four years into the crisis and the business aviation industry is still reeling. Activity and prices are not forecast to recover fully until 2013. One of the most important bottlenecks to its recovery is lack of finance. In the good times, banks lent too much, and carelessly. Fingers burnt, they’re now only prepared to finance rock-solid transactions. The result is that the wealthiest purchasers pay in cash (with an eye on investment) and the rest of the market can’t afford it. There is help at hand: business aviation leasing is on the up, manufacturers are looking to provide financing, and export credit agencies are lending a hand. But the potential economic double dip, and particularly the banking crisis in Europe, could easily snuff this out. Once again, bizav is nowhere near the top of the agenda.

The Performance Scheme:  Put up or be shamed

The European Union adopted the first Single European Sky reforms back in 2004, agreeing a second package in 2009 in an effort to close the considerable gaps between objectives and performance. Now 2012 is the target date for the new regime to be operational so the Commission is in a hurry. It is looking for ways to bully member states for their shortcomings against targets for safety, cost efficiency, capacity and flight efficiency. The latest result is a Commission recommendation paper considered by the Single Sky Committee in October. The various national regulators, and by implication their Air Navigation Service Providers (ANSPs) are in its cross hairs, and their shortfalls from ambitious performance improvement measures have been publically noted. All but two EU member states have been named and hopefully shamed for their current efforts.

Sshhh:  Don’t mention hushkits

The prospect of a transatlantic trade war in the aviation sector is looming, as the US Senate considers proposed legislation to refuse compliance with new European Emission Trading Schemes (ETS). The International Civil Aviation Organization (ICAO) will hear the next round of complaints in November. This is likely to lead to arbitration under Article 84.  The contest evokes the ‘hushkits’ debate sparked off in the late 1990s when the EU deemed US-remanufactured hushkit engines non-compliant in what was seen by the US as protecionist rules to favor Airbus . The US threatened to suspend landing rights for European carriers. The dispute was deflated when the EU backed down after an unhelpful opinion from the European Court of Justice Advocate General.  There may be parallels this time round.

The ECJ: Kicking the Nearest Dog

The European Court of Justice found Air France liable to provide compensation to several passengers stranded when a technical fault aborted one of its flights. The amount of compensation is tiny, but the principle could again imply major liabilities for the airline business. The ECJ’s interpretation has arisen from ambiguities inherent to the EU legislation governing carrier liabilities to their passengers. The legislation should be rewritten, but the airlines fear that MEPs’ natural inclination is to favour consumers to the detriment of efficient and reasonable operational practice.

To read more, please login here:

Members