The European Union’s five biggest airline groups Air France-KLM, EasyJet, IAG, Lufthansa and Ryanair have unveiled plans to establish a new airline lobbying group later this year to present a set of common goals to European regulators.
The chiefs of the five carrier groups held a joint briefing in Brussels today to set out the initiative.
EasyJet chief executive Carolyn McCall said the new entity will be based on the Airlines for America lobbying group in the USA and will be “open to all European airlines”, adding that there was a “need for a new entity, something new and different” with real “traction”.
The show of unity comes despite differences in policy among the carriers, highlighted most recently around the US-Gulf carrier subsidy row. Crucially it is timed to provide a united position on regulatory policy as the new European Commission works on its key aviation package.
The new entity, which McCall says will go “live” in October, will represent four common goals shared by the five founding members of the group.
The first of these is the development of a European aviation strategy with a plan for what the group describes in a joint statement as “a simple efficient regulatory structure, which would strengthen the competitiveness of European airlines, ensure jobs and growth through innovation protect consumer interests and promote more efficiency to reduce costs”.
The second objective is lowering airport costs through reforming the European airport charges directive. Air France-KLM chief executive Alexandre de Juniac says there are a number of “monopoly airports across Europe” that are not effectively regulated. He also says there is needed to provide “effective control of security costs” at airports.
McCall adds the introduction of a single till charges regime was an “obvious example” of a way of reducing airport costs. She adds the lack of competition in the provision of ground handling services at airports is “unacceptable” and needs to be reformed.
A third objective concerns air traffic management. Ryanair chief executive Michael O’Leary says the group wants to see the Commission tackle the issue of air traffic controller strikes and urges the introduction of a “binding arbitration” mechanism to allow ATC unions to “achieve their objectives” so that striking “isn’t the first golf club they [the unions] go for”.
The Irish carrier chief says he is not “calling for the outlawing of strikes” but that a “mechanism” needs to be introduced to reduce consumer “disruption”.
Other issues include the need for the Commission to “reset” its Single European Sky strategy by “focusing on using new technology to make efficiency savings; and using SESAR funding to drive compliance with the Single Sky framework”.
The fourth aim of the group is “stimulating more economic activity and jobs by creating the right regulatory environment, removing passenger taxes and unreasonable environmental taxes”.
IAG chief executive Willie Walsh says the new grouping “want to impress on the Commission the risk of and impact of passenger taxes” which have a “counter-productive effect” on economic growth. He cites the examples of the short-lived passenger taxes introduced in Ireland and the Netherlands.
Walsh says all members agree on the need to reform EU Regulation 261/2004 on passenger compensation which he says “we believe was well intentioned when it was introduced in 2004 but has been misrepresented and misinterpreted” by regulators.
They group also confirmed its opposition to the provision of state aid, as a general principle, to airlines and airports.
McCall says the airline group, which has yet to be given a name, is being created because its members felt “frustrated” by the “slowness of some of the change”. Walsh adds that European airlines need to “come together to push hard to try to increase the pace of change”.
The grouping brings together the EU’s five biggest airline groups – which Lufthansa chief Carsten Spohr says account for roughly 50% of all European passengers – on common issues. IAG chief Walsh says that while the airline group agrees on “80% of issues”, there were areas where they disagree which are not being championed on a common platform.
These include the issue of market access and the Gulf carriers. McCall says “that was not on the table” because there were “divergent” views among members.
Differing positions on issues including global liberalisation, while not citing the US-Gulf carrier row specifically, were given by IAG for its recent decision to quit the Association of European Airlines – where fellow members include Air France-KLM and Lufthansa. It subsequently joined the European Low Fare Airlines Association, whose members include EasyJet and Ryanair.
McCall says another area that is not being pursued on a common platform is new business and employment models for the same reason.
O’Leary says that where the airlines do not agree on an issue these can be “fed” through to other airline associations such as AEA and ELFAA where they can be addressed individually. The Irish chief says that for this reason the new airline group is not intended to replace existing associations.
Simon McNamara, the head of Europe’s regional airline grouping, describes the plan as “an interesting development”. He adds that the European Regions Airline Association is “looking forward to working with the alliance to ensure that all sectors of the aviation industry are represented”.
The initiative comes a week after the European Commission closed its consultation seeking third party views on what should be included in a raft of regulatory reforms collectively called the aviation package which is expected to be published at the end of the year.
A comment by the airports industry (not keen on the idea):
The airports industry rejected the airlines’ statements, saying a reduction in airport charges would likely not be passed on to consumers.
“Major airlines already have a free lunch, now they also want a free dinner,” said Olivier Jankovec, Director General of Airports Council International Europe. “Assuming airlines would pass mandated reductions in airport charges on to consumers is ludicrous to say the least.”
How much does the aviation industry already do?
IAG (International Airlines Group) which is the parent body of British Airways comes out as the company spending the 5th largest amount of any with a UK address. So there is a fair degree of lobbying going on already.
And Airbus also spends huge sums lobbying.
1. This shows the ranking by amount spent on lobbying by companies with UK addresses.
2. This lists the number of European parliament lobby passes that companies have (Airbus is No.2)
3. This lists the amounts that companies across the EU spend lobbying in Brussels.