Bulc: Commission's new aviation strategy to boost EU competitiveness

New aviation package to reinforce EU's position as leading player, says Violeta Bulc.

By Rajnish Singh

Rajnish Singh is Political Engagement Manager at Dods

19 Oct 2015

Violeta Bulc is worried about Europe's aviation industry. The European transport Commissioner can see major turbulence ahead; "The aviation sector is affected by poor profitability and faces major challenges in an ever-changing global environment."

The fear is that, with the industry's competitiveness under threat from external carriers, the EU's 'direct connectivity' is at risk, along with jobs and the attractiveness of Europe as a business location.

With 842 million Europeans flying within the EU in 2013, and according to the Commission employing around 2 million people, the sector contributes €110bn to the EU's GDP per year. There are 27,000 flights crossing European airspace every day, representing 26 per cent of world market. 


The former deputy Prime Minister of Slovenia says, "European aviation is a success story and a growth industry, representing one of the most ambitious aviation markets, both in terms of economic importance, but also in safety and security standards."

Aviation plays a crucial role in driving economic growth, jobs and trade, and its impact on the EU's economy are in areas recognised as core key priorities of the Juncker Commission. 

Bulc, however, believes the industry needs reform, and is launching a new aviation package to streamline the industry at the end of 2015.

"The goal of the upcoming aviation package is to shape a comprehensive strategy for the whole of the EU aviation ecosystem. The European Commission's ambition is to strengthen EU air transport … and make it more competitive and grow sustainably" with the aim to "keep Europe as a leading player in international aviation … and reinforce our position on the global stage."

Other aims of the strategy are to cut carbon emissions, introduce greater innovation in the area of air traffic management and increase airport capacity through introducing the second phase of the single European sky policy (SESII).

However, this is not the first time the Commission has shaken up the industry. In the 1990s, the EU opened up Europe's internal aviation market by removing commercial restrictions on airlines flying within the EU. As Bulc points out, "it was a game changer", boosting the number of routes, the frequency of flights and job creation. 

"The boom in aviation services that followed from this liberalisation effort also made air transport accessible to a wider travelling public and created unprecedented levels of connectivity for the benefit of businesses, regions and related sectors. The aim of the upcoming aviation strategy is to give a similar boost to the European aviation industry."

Compared to other markets, the European Commission has its work cut out in trying to reform the sector. The industry is recognised as being a 'volatile sector', requiring extended, expensive long-term investments. 

The 2015 price for the Airbus A320, a popular narrow-body passenger jet, is around €85m per plane. But the industry is regularly exposed to a range of extraneous factors beyond its control, such as fluctuations in oil prices, political crises and extreme weather conditions to name but a few.

The Commission also knows that the global aviation landscape is rapidly changing, Europe and North America are no longer dominating the market. Instead, there is increasing demand from the growing economies of India, China and South America, which are set to become the 'new drivers of aviation' in the coming decades. 

Added to this, Europe's more established airlines such as British Airways, Air France and KLM are facing new and powerful competitors, such as the new Gulf carriers, equipped with state-of-the-art fleets, who are fighting hard for European passengers. The Commission fears the 'high-quality of services so far provided' to customers will be undermined. 

The Commissioner is keen to stress that her transport policies are not only about trains, planes and automobiles; customer needs are also key. "Transport is not just about infrastructure, trains and trucks, it is also about people, workers and passengers. That is why the Commission has always put citizens at the heart of its transport policy."

According to the Slovenian, "the EU became the first area in the wold where passengers have guaranteed rights across all forms of transport. In the air sector, liberalisation greatly benefited passengers: they are now enjoying far lower air fares and a wider choice of carriers and services that they did in the past."

However, market liberalisation and competition could not alone protect air passenger consumer rights. In 2004, the European Parliament and the European Council adopted a regulation establishing common rules on compensation and assistance to passengers in the event they were denied boarding or suffered flight cancellations, long delays or overbooking.

Recognising any reform of the air sector will have to go hand-in-hand with upgrading passenger rights, the commissioner admits that, "although the (2004) regulation clearly has merits, over the years we have come to the conclusion that there is still room for improvement."

In 2013, the Commission did put forward proposals to amend air passenger rights, but they are currently blocked in Council. In a message to the Council, Bulc says "I urge member states to move forward on this important dossier, for the benefit of EU citizens."

Though the Commission is not expected to reveal the new aviation package until of the end 2015, one could have an educated guess as to what will be in any new strategy by analysing the responses to the public consultation. 

Given the far-reaching implications of any new aviation strategy, the Commission undertook a major public consultation from March 2015 to June 2015. It received 233 detailed responses from respondents in 21 member states, as well as 10 non-EU member countries.

The majority of the respondents (71 per cent) were from professionals. Around 45 per cent of responders were of the opinion that some kind of liberalisation would be beneficial to competitiveness. 

Respondents were also keen to see the EU do something to make airports more environmentally friendly, while 60 per cent of respondents wanted any future aviation strategy to deal with issues concerning capacity. Interestingly, as a reflection of current fears over terrorism, 80 per cent of submissions indicated that security was an important issue in improving competitiveness of the EU aviation industry.

Any new aviation package will also need to deal with the biggest innovation the aviation industry has seen in years, namely remotely piloted aircraft systems (RPAS), more commonly known as drones. 

Bulc recognises the new opportunities RPAS present saying, "Drones represent a tremendous opportunity both for our aeronautical manufacturing industry, particularly for SMEs, and for many aviation and non-aviation businesses … and to increase their efficiency and competitiveness.” 

But she accepts the technology is making current laws rapidly outdated, “today's aviation safety rules are not adapted for drones. Given the broad variety of types of drones being used in differing operating condition, a risk-based framework needs to be put in place rapidly, which we aim to achieve with the upcoming aviation strategy."

Bulc also stresses she wants to see any future drone services regulated at an EU level. "Drone operations present a number of issues which are not, or much less, present in civil aviation in general."

They include safety, security, privacy and data protection, environmental protection and liability. Already a number of European countries have adopted drone rules, mostly for machines weighing less than 25kg and used for non-complex operations. 

However, the Commissioner warns against member states unilaterally applying their own rules saying, "They risk adopting diverging rules, which would hamper the internal market and the development of new products."

The Slovenian accepts the Commission needs to act promptly as, "the industry and member states are requesting rapid action from the regulator to solve these problems."


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