Opinion: European Aviation Strategy Focuses On Wrong Issues
The new European aviation strategy dangerously reflects the interests of only a few big players
Threats and Promises
Delays are more the norm than the exception in European Union policy. When European Commission Transport Commissioner Violeta Bulc presented her long-awaited aviation strategy a week later than originally planned, the main reason was not last-minute change requests by unhappy member states, but media attention: Bulc wanted to move the event out of a week full of other EU announcements so that she and her proposals would not have to share the spotlight.
The much-anticipated aviation policy—the guidelines for how one of the largest economic and political blocks plans to treat air transport in the future—is a strange mix of aggressive yet unachievable targets and vague promises. And the more important the issue, the vaguer the answers seemed to have become, unfortunately, as can be seen in the description of European air traffic control reform.
The strategy document and accompanying communication even include an element of (unintended) humor. As if she has never heard of airline complaints about the slow, almost nonexistent progress in ATC harmonization, Bulc says she would like to turn the concept of the Single European Sky into a Single Global Sky. Is this a threat or a promise?
In another area, the EC now seems to want to try to help European airlines in a very concrete way, which should be worrying to foreign airlines serving Europe. The commission is asking member states for a mandate to negotiate comprehensive air service agreements with important trade partners such as China, India and the United Arab Emirates. These agreements would replace the bilateral ones the states have to date negotiated on their own. Several such agreements are already in place, including the open-skies deals between the EU and the U.S. and the EU and Morocco. The new contracts are planned to include “fair-competition provisions,” clauses that define what kind of government support is permissible and what should be rejected.
First, trying to secure a mandate and then negotiate on the basis of it is the equivalent of not giving any new traffic rights to non-European airlines for a long time—it would take years to get all parties on the same page. And even though the mandate was originally seen as a bulwark against the growth of Emirates Airlines, Etihad Airways and Qatar Airways, it is airlines from China that want the most additional flights.
If the mandate becomes reality, Europe will likely see no material growth in markets now governed by restrictive air service agreements unless Air France-KLM and LufthansaGroup decide they would like to grow in Asia. Their governments would surely let the EC know.
It is too soon to tell whether the EC will ever be given a mandate to negotiate. But even if it is, the mandate will almost certainly be rejected by many countries that prefer to continue with their own bilateral agreements. Those in turn are unlikely to be acceptable to European states that opted for the multinational approach in the first place. In the end, the big danger is that nothing at all will happen.
Second, the notion that Europe will define fair competition and the rest of the world will just sign on to it is simply ridiculous. There are many possible forms of subsidy. The less obvious ones are used in Europe, but in fact the airline industry benefits from significant government support in many places. Air service agreements are clearly the wrong way to sort out trade differences. Rather, it would make more sense to create an international trade body, an aviation version of the World Trade Organization (which does not govern the airline industry) to define standards and settlement mechanisms.
If Europe tries to go it alone, the outcome will be a complex set of rules that differ by trade partner and deal—at best. But it could be much worse. As in any trade contract, both sides have to agree, and if Europe pretends it can impose its view on others, a serious trade conflict could ensue. Europe should know that, given the dispute around its Emissions Trading Scheme.
The EC appears to be assembling behind the interests of a few large European legacy carriers that have no interest in opening the market further. But if the EC is given a mandate, it should focus on defending consumer interests rather than protecting Air France-KLM and Lufthansa Group from competition. Again, history is instructive: The liberalization of intra-European flying has been nothing short of a resounding success, even though it was initially opposed by leading airlines, and it helped create low-cost carriers, a development that clearly reflects consumer interests.
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