The Association of European Airlines has issued its members’ traffic and capacity figures for April and the year-to-date, giving the clearest picture so far of the impact of the volcanic ash crisis and the subsequent airspace closures in the second half of the month.

Passenger traffic for the month was down 13.1% on April 2009, a baseline which itself was depressed as the economic downturn was by then exerting its full impact on the industry. The monthly result for April overturned the tentative recovery which had been evident in the first quarter of the year, and left the cumulative figure for the year anchored 1.6% below the 2009 level.

AEA’s airline-by-airline figures show the disparity between the impacts of airspace closures on individual airlines. Only four member airlines recorded a growth in April – all in southern and eastern Europe, while nine reported traffic losses in excess of 20%. Indications for May, based on weekly traffic figures, show an improved outlook. A further round of ash-induced disruptions in the early part of the month continued to impact the market, but the last three weeks of the month showed traffic increasing in the 6%-8% range.

AEA press release 9 June 2010

Detailed figures

The Association of European Airlines, AEA, has reacted angrily to a statement by a European Commission spokesperson that the recent travel disruption would have only a ‘tiny’ effect on the impact for the European airlines of the EU Emissions Trading Scheme.

2005 was the base year to determine the total amount of certificates for trading emission permits; 2010 is the base year to determine which airlines would be allocated which share of those certificates. Because of the particularly harsh winter and the protracted closure of airspace in April there were large-scale cancellations for protracted periods by all airlines, particularly those based in northern Europe. This means that using actual 2010 emissions as the baseline for allocation of permits to airlines for the whole period of the Scheme 2012 – 2020, will create significant distortions.

“Some airlines will have to pay €40 million more for certificates because their share of the cake in the base year will have changed”, said Ulrich Schulte-Strathaus, Secretary General of the AEA. “To the European Commission such sums may be ‘tiny’, to the airlines they certainly are not”.

He noted that the Commission’s statement qualified the view that the impact would be insignificant with the observation that ‘most operators have been impacted by the flight restrictions’. “That is precisely the point”, said the Secretary General. “Misguided political decisions to close airspace, based on deeply flawed assumptions, impacted almost all operators in Europe, but those impacts differed widely. The three largest northern EU operators lost more than 16% of their business in April; for the three largest southern EU airlines the figure was 4%. It is evident that the use of 2010 as a baseline will create significant distortions, disadvantaging all airlines, but particularly those who were hardest hit by the unjustified airspace closures this spring. To pretend that the impact is minimal is wrong and disingenuous on the part of the Commission.“

AEA maintains that particularly in times of austerity programmes, the solution should not be to penalise airlines, but to incentivise them to invest into creating a moresustainable industry for the future. “We all understand that safe, environmentally friendly and affordable flying is the key to economic recovery and a sustainable future”, said Mr Schulte-Strathaus. “Limited public budgets should be focused on securing a competitive future, through investments into biofuels and into future technology”.

AEA press release 04 June 2010

AEA CALLS FOR FURTHER ACTION ON MEASURES TO EASE IMPACT OF AIRSPACE CLOSURES

The Association of European Airlines, representing Europe’s most important network carriers, has welcomed the statement of EU Commissioner Kallas at the Transport Council today, to investigate the financial consequences of the nine-day disruption caused by the Icelandic volcano by the end of June, which should also provide clarity about the uniform treatment of airlines and their customers.

The Transport Ministers met in a special session to discuss the report of the European Commission’s High Level Task Force on the impact of the closure of most of European airspace. They noted the Task Force findings and propose a medium-term review of procedures. However, the outcome provided little encouragement for airlines, whose business was closed down for a week, and passengers, who were stranded throughout Europe and across the world.

Said AEA Secretary General Ulrich Schulte-Strathaus: “The Task Force report, presented by Commission Vice-President Kallas, contains a wealth of worthwhile proposals. The Commission correctly identified shortcomings in the European decision-making process. As a consequence of the disproportionate closure of air space, passengers must have assurances that their costs will be covered. Airlines should be granted non-discriminatory and fair compensation for the damage they incurred. And those concerned must improve the procedures.”

AEA welcomed the consensus amongst the EU Ministers to expedite the implementation of the Single European Sky programme to rationalise European airspace, and in doing so put in place a more effective crisis-management framework. And in the broader context, their commitment to develop an aviation policy ‘platform’ addresses the uncoordinated nature of European aviation regulation.

Nevertheless, the Transport Ministers failed to address the economic impact of the airspace closures and no directions were given on improvements to the current procedures. "An opportunity has been missed to provide Europe with the guidance and leadership we all require in determining how to compensate for the damage incurred. Lessons must be learned from the grounding of European aviation, and in future we must maintain our high levels of safety without giving rise to a breakdown of our infrastructure. Only then will Europe's economy remain internationally competitive".

AEA press release 4/05/2010

‘Harsh lessons’ of the downturn should guide policy, says AEA Secretary General

The Association of European Airlines, which represents Europe’s most important network carriers, has published its traffic and capacity figures for the last two months of 2009.

The outcome for the year was a decrease in passenger-kilometres of 4.5% with an even greater fall of 5.8% in the number of passengers boarded, from 346 million to just below 326m. This 20m drop easily surpasses the previously greatest recorded annual traffic loss, of 14m in 2002, following the 9/11 outrage. Given that the year-on-year comparison was with a steadily worsening trend in the 2008 baseline, it is unsurprising that the rate of traffic loss decreased through the later stages of the year, finishing with a December traffic volume no lower, but equally no higher, than in December 2008.

All the main operating regions were amongst the poorer performers; cross-border traffic within Europe was 5.3% down, the North Atlantic minus 5.6% and the Far East minus 5.9%. Traffic to/from the Middle East and Africa managed to buck the trend with a positive growth.

Effective capacity management through the latter part of the Summer helped to mitigate the effect of the traffic downturn and load factors improved year-on-year fromJuly onwards, but insufficient to prevent a small decrease for the year as a whole, down 0.3 points to 76.0%, as overall, passenger capacity decreased by 4.2%.

If the passenger market was very weak, the airfreight market fared much worse, with a decrease of 16.5%. In the largest market for AEA airlines, to/from the Far East, the shortfall was 22.8%.

Said AEA Secretary General Ulrich Schulte-Strathaus: “the stark reality of the figures tells us what we know already – our sector has just come through an astonishing year. The crisis has not receded – its repercussions will be felt well into the future, and in some respects the face of the industry will be changed fundamentally”.

“We have seen, quite clearly, that the industry’s suppliers and service providers have been able to insulate themselves from the worst of the downturn by their ability to recover costs, or sustain profits, through their pricing policies. This lesson must be taken on board by our regulators. We have seen, quite clearly, that airlines and their passengers cannot sustainably be treated as a cash cow by national treasuries, to be taxed and taxed again. This lesson, too, must be taken on board by our regulators”.

“We have adapted, in the face of the downturn. There has been an increase in the tempo of the consolidation process. The importance of economies of scale, of coherent networks and optimised fleet structures, has been re-emphasised. For niche markets, the key is a consistency of service, tailored to the specificities of the market. We understand these priorities; it is important for our regulators to understand them too”.

AEA press release 5/2/2010