Europe's airlines heartened by sharp change in perception of industry

Thanks to its founding mission, Airlines for Europe (A4E) might be naturally inclined towards pointing out things that need improving in the policy and regulatory sphere, but the European airline association also used its annual summit on 20 March to highlight a fundamentally positive development for the region’s carriers.

There was a sense among the membership’s largest operators that the incoming European Commission will continue a recent trend of being much more focused on increasing the competitiveness of Europe’s airlines, particularly against strong foreign competition, rather than seeking to stymie their development on environmental grounds.

“The perception of the importance of aviation has changed, unfortunately often due to sad events,” said Lufthansa Group chief executive Carsten Spohr during a panel session at the event.

Policymakers recently saw the social and economic impacts of lost air connectivity thanks to Covid-related travel restrictions and lockdowns, but on top of that, “the world has become a less-open place with wars and airspace closures and geopolitical tension between the two remaining superpowers, and I think the understanding of how important we are has increased”, Spohr says.

Speaking on the same panel, Ryanair group chief executive Michael O’Leary further explained how the perception of aviation among European policymakers in the post-Covid world has shifted, stating: “Five years ago the outlook was much more grim; it was all worried about global warming and how we tax the crap out of flying; how do we stop people flying and flight-shaming [them].

“That’s gone,” he states.

He cites the example of recent comments by Sweden’s government regarding the transformation of SAS as it seeks to emerge from Chapter 11 restructuring – a development that is particularly noteworthy in a country that gave birth to the flight-shaming movement.

“Even the Swedes last week were talking about ‘how do we reinvigorate SAS, we have to encourage people to fly because our economic development depends on that’,” O’Leary says.

“I am much more optimistic towards the next five years,” he adds, citing A4E’s “very outward-looking, growth-focused reform agenda”.

That reform agenda includes a call for “competitive decarbonisation”, for which “smart industrial policy and targeted funding from the EU and member states will be key, along with collaboration between airlines and other stakeholders such as fuel producers, aircraft manufacturers, ANSPs and airports”, A4E says.

That should help to ensure Europe’s carriers are not burdened by sustainable aviation fuel (SAF) mandates, for example, that are only fulfilled by purchasing SAF at prices that damage airlines’ ability to compete with foreign carriers. To achieve that outcome, A4E argues that “it is crucial that Europe supports affordable and reliable domestic production [of SAF], particularly in the face of significant market pressure from global players outside of Europe”.

The reform agenda also calls for ANSPs, civil airspace users and militaries “to deliver positive steps towards a more seamless and efficient European airspace”, and for a Europe-wide “passenger protection” effort to minimise the effect of strikes on services.

Among specific comments from the A4E membership during a busy day in Brussels, O’Leary described reforms proposed for the Single European Sky initiative as “like putting lipstick on a pig”, while IAG chief executive Luis Gallego implored the European Commission to allow consolidation to happen in Europe.

On consolidation, Spohr appeared cautiously optimistic over Lufthansa Group’s plans to acquire a 41% stake in ITA Airways, with news on the remedies required by the Commission potentially imminent.

Meanwhile, Air France-KLM chief executive Ben Smith described as unfair a Dutch court’s ruling that KLM’s “Fly Responsibly” campaign messaging was illegal.