TWTWTW 8 June to 12 June
Monday should have been called manic Monday. Eamonn Brennan, Eurocontrol’s incurably optimistic director-general, finally had some news to be optimistic about: for several days in a row there were more than 6,000 flights across the network with 6,582 movements on Monday. The busiest airport was Paris Charles de Gaulle with 293 flights, followed by Frankfurt with 278, Amsterdam Schiphol and Istanbul with 259 each, and London Heathrow with 253. Recovery in air travel is getting underway, he tweeted.
ACI Europe, however, thought its members had nothing to celebrate. It lamented the “huge imbalances” in air transport relief. Governments in Europe, hear ‘aviation’ and immediately think ‘airlines’, so have almost exclusively helped airlines, with more than €24 billion of support already. With few exceptions, airports have been excluded from national aid programs for aviation, ACI pointed out. France, Germany and Italy are particular cases in point, extending a whopping€19.3 billion in financial support to their former flag carriers, without providing specific support to their airports. “This essentially brings us back to the era when the interest of airlines used to command aviation policy, with no consideration for other industry stakeholders – let alone consumers,” cautioned ACI Europe Director General Olivier Jankovec.
Proving Jankovec’s point, Brussels Airport ground handler Swissport Belgium filed for bankruptcy and another airline rescue package emerged, this time in Vienna. Austria’s government, Austrian Airlines and its parent Lufthansa finalised a €600 million deal that will keep Austrian afloat. Negotiations were long and difficult, Lufthansa group boss Carsten Spohr admitted. But wins do not come easily, and it certainly looks like he did score on a couple of points not least in his drive to drive LCCs out of the group’s hubs. As part of the rescue package, Vienna committed to introduce “anti-dumping” legislation prohibiting the sale of tickets that are cheaper than the sum of all levies and taxes (about €40). For Spohr, the model could be useful for other Lufthansa bases. Useful for Lufthansa, that is. Let’s see what Brussels thinks of this minimum ticket price plan. Having looked away through almost all of the showering of money, maybe this will awaken DG COMP. And let’s see what Brussels thinks of this puzzling arrangement: “Austrian Airlines will shift passenger traffic to the railways on short-haul flights in as much as an adequate infrastructure is available and direct accessibility to Vienna Airport is ensured based on a travel time of considerably less than three hours. However, the objective is also to make sure that the airports in Austria’s provincial capitals continue to be connected to a Lufthansa flight hub.” So short-haul flights are out, to save the environment, unless they connect to a Lufthansa hub? So if not the enforced minimum price control, maybe this will wake up DG COMP? Do not hold your breath.
Tuesday saw the French government do what it had to do, namely support its vast aerospace industry. In announcing the €15 billion aid scheme, Finance minister Bruno Le Maire did not beat around the bush: France and Europe must maintain their leadership in building aircraft and three months of pandemic will not wipe out three decades of building up knowhow and innovation. “We must not allow the global market to be divided between the U.S.’s Boeing and China’s Comac,” he vowed. Decarbonisation of air transport is a key pillar of the aid package, and €1.5 billion is earmarked to support research and development to elevate France as one of the most advanced countries in “green aircraft” technology. The plan calls for the entry in service of a “zero CO2 emissions” successor of the Airbus A320 between 2033 and 2035 and the entry in service around 2030 of a new highly-efficient regional aircraft that uses either hybrid electric or hydrogen technology. BTW, #PlanAéro’s €15 billion figure includes the €7 billion already allocated to Air France. This leaves €8 billion for the country’s aerospace giants Airbus, Dassault, Safran and Thales, and their supply chain. Hats off to Air France’s lobbying skills.
ICYMI, Germany’s airlines –count them, go on, one, er flagship airline— are a well-oiled lobbying machine too. Buried deep in the country’s €130 billion coronavirus pandemic recovery plan (page 9, point 35 l), announced 3 June, the federal government pledges €1 billion to support the accelerated transition to “modern aircraft of the latest design that emit up to 30% less CO² and noise.”
On Wednesday, Jankovec’s concern again was validated as Brussels approved yet another two airline bailout packages: a lofty €1.2 billion to TAP Portugal and Finland’s plans to contribute €286 million to the proposed €500 million recapitalisation of Finnair. While Finland’s participation in Finnair’s right issue is in line with the Commission’ coronavirus state aid rules, the green lighting of TAP’s needed a bit more creativity. The Portuguese airline was lossmaking last year and thus is not eligible to receive support under the Commission’s state aid temporary framework, aimed at supporting otherwise viable companies during the pandemic. But no worries. DG COMP assessed the bailout under its guidelines on rescue and restructuring rules, which enable member states to support companies in difficulty, provided that these are limited in time and scope and contribute to an objective of common interest. Rescue aid can be granted for maximum 6 months to give a company time to work out a restructuring plan. But that is according to the letter of the law. Remember Alitalia’s temporary €900 million bridging loan that was provided in 2017?
Thursday saw Wizz Air mock Austria’s plan for a minimum ticket price and launch a one-day promotion offering 200,000 tickets at €9.99 on selected Austrian routes, including one carry-on bag. The Hungarian LCC however faces no risk to be fined as the new legislation has not yet been approved by Parliament.
Meanwhile, Wizz Air’s Irish archival once more got furious at the UK government. While still fuming about the “completely ineffective and useless” 14-day quarantine for travellers entering the country –and prepping legal action against the rule jointly with easyJet and British Airways—, Ryanair slammed the the UK Department of Transport’s advice to minimize carry-on luggage in favour of checked in bags as even “ more nonsensical” than the quarantine. As reported in last week’s TWTWTW https://www.aviationadvocacy.aero/blog/, Ryanair is advising passengers to “choose priority [boarding] & 2 cabin bags to keep your luggage with you,” whereas EASA recommends airlinesminimise the amount of hand luggage taken into the cabin, in order to expedite the boarding and disembarking procedure and to reduce the movements and potential contamination in the cabin. Here is Ryanair’s reasoning why passengers should minimise checked in luggage, in favour of carrying one or two pieces of cabin bags: “This is because cabin bags are handled only by the passenger and therefore eliminates any risk of physical contact with other persons. By contrast, checked-in bags are handled by multiple different persons at check-in, in baggage holds and while being loaded on to and out of aircraft holds.”
On Friday it was CANSO’s turn to highlight that Europe’s airlines have received plenty of government aid and they have been allowed to defer their payment of air traffic control fees. But do not count on this one-off action to become a permanent mechanism to transfer the financial burden from the airlines to the ANSPs, the body’s European Director, Tanja Grobotek, warned. “We understand the pain our customers are in, but in the future, we need to return to the position where airspace users pay for the essential service provided by ANSPs. We strongly contest any notion that our members are in a position to provide financing to the airlines.” Everyone loves aviation, but only if it is an airline.