EU seeks to bolster aviation sector against global competition

18. Dezember 2015 zur Übersicht

Article published in "the Nation" on 18.12.2015

The European Commission has unveiled new measures to boost the bloc's aviation industry in the face of fierce competition, notably from the Persian Gulf.

The European Union's aviation sector employs almost 2 million people and is worth Euro110 billion (Bt4.4 trillion) to the bloc's economy, according to the commission. But competitors such as Emirates Airline, Qatar Airways and Etihad Airways have been gaining ground on the European market, amid allegations that they benefit from unfair state subsidies.

"Recent developments at the global level have put Europe's aviation sector under increased competition and pressure," said commission Vice President Maros Sefcovic.

A key component of the new strategy focuses on creating EU-wide aviation sector agreements with countries and regions including the six Gulf Cooperation Council states and the ten members of the Association of Southeast Asian Nations.

These would spell out the common conditions for airlines to operate in one another's markets, the commission said, adding that it would "consider measures to address unfair practices" by third countries and their operators. But such arrangements can be lengthy and difficult to negotiate, EU officials warned on condition of anonymity, noting that they have to benefit all parties.

The EU's executive is also proposing aviation sector agreements with Turkey, China, Mexico and Armenia. Similar deals are already in place with the United States and Canada as well as several countries neighbouring the EU, and are being finalised with Brazil.

At present, foreign companies can only own up to 49 per cent of an EU-based airline. Last year, the commission launched investigations into whether foreign investments into four European carriers, by Asian, US and Gulf state operators, run afoul of these rules.

Europe's aviation industry is also hampered by capacity constraints, such as limited departure and landing slots at airports, and inefficiencies resulting from the fact that the market is fragmented into 28 member states. The US controls the same amount of airspace as the EU, with more traffic, but at almost half the cost, according to the Business Europe industry association.

The new strategy aims to give new impetus to the EU's long-discussed Single European Sky initiative, which aims to reduce congestion and flight delays. Airline passengers stand to benefit from cheaper flights, greater choice, including more direct flights to countries outside the EU, while maintaining high levels of safety and security, the commission promised.

It also wants to boost digital technologies and investment into the aviation sector, notably regarding the use of drones. The strategy foresees new laws to ensure the safety of drones and safeguard privacy and data protection, among other things.

The EU aviation strategy requires the approval of member states and the European Parliament before it can be implemented. Business Europe welcomed the initiative, highlighting the need for lower costs, greater capacities and a more unified European market, while calling for an international level playing field and better access to growing international markets.

But EU lawmaker Michael Cramer of the Greens criticised the proposals for giving the aviation industry a greater competitive advantage over more environmentally friendly forms of transport such as rail travel.

"For distances that can be managed in less than five hours, the EU should create more incentives to move air travel onto rail tracks," Cramer said. Fellow Green EU parliamentarian Keith Taylor said it was "ironic and cynical" of the commission to present these proposals while global climate talks had just taken place in Paris.