The European Commission (EC) recommends European nations offer loans to ailing airlines at uniform market conditions, rather than give state aid, says a report released Tuesday outlining the EC’s plan to help the airline industry recover from the volcanic ash cloud crisis.
EC Vice President in charge of Transport Siim Kallas, issued recommendations starting with emergency measures up to long-term structural change in the air transport industry in the wake of the eruption of ash from Iceland’s Eyjafjallajökull volcano that caused the cancellation of over 100,000 flights within the EU, interrupting travel for some 10 million passengers.
“The first priority for the commission was to facilitate the opening up of more airspace to get stranded passengers home. Now, as we are getting back to normal our focus can shift to relief measures for the industry ... so they can weather this crisis,” said Kallas in a statement on Tuesday.
“The commission is also proposing structural changes to ensure we do not face this situation again,” he added.
According to the International Air Transport Association (IATA), the estimated losses for the airlines have exceeded $1.7 billion worldwide. During the peak of the ash crisis, April 17–19, lost revenues reached $400 million daily, affecting 1.2 million passengers per day. Grounded airlines also incurred huge bills providing assistance to passengers.
The Association of European Airlines (AEA), which represents 36 major airlines, declared a total revenue loss of $1.4 billion, including canceled flights, fulfilling obligations to passengers, stranded crew costs, and parking at airports.
Among the immediate measures proposed by the EC vice president are establishing an expert group and developing a new methodology for risk management. In terms of relief, he makes it clear that state assistance needs to be applied uniformly, in the form of loans granted at market conditions, using uniform criteria, and it should not be in the form of state aid to ensure a level playing field for all companies. Also, air passenger rights need to be uniformly respected and consistently applied across the EU.
In the short term, to tackle cash flow problems, the EC proposes that airlines be able to keep their unused slots—usually valid only for a specified departure—to use in the future. It also recommends European Organization for the Safety of Air Navigation Eurocontrol and members states assesses the option of temporarily deferring route charges.
Kallas also proposed medium-term and structural changes such as giving highest priority to the Single European Sky II package (SES II), due to come into force in 2012. SES II aims at redesigning the European sky based on traffic flows rather than national borders. Taking into consideration the current situation, EU Transport commissioner highlighted the need to fast track many elements of SES II by the end of 2010, especially appointing a European network manager.
Other measures Kallas put forward include creating pan-European mobility plans to facilitate switching passengers to other modes of transport if one sector falls into crisis. Lastly, the VP wants to establish an aviation platform, convened by himself, to better coordinate with the air transport sector, and to follow up on the proposed crisis-management measures.
The proposals package will be discussed at an extraordinary ministerial meeting in Brussels on May 4. If it is approved, the EC plans to implement immediately its package of short-term and temporary relief measures.
EC Vice President in charge of Transport Siim Kallas, issued recommendations starting with emergency measures up to long-term structural change in the air transport industry in the wake of the eruption of ash from Iceland’s Eyjafjallajökull volcano that caused the cancellation of over 100,000 flights within the EU, interrupting travel for some 10 million passengers.
“The first priority for the commission was to facilitate the opening up of more airspace to get stranded passengers home. Now, as we are getting back to normal our focus can shift to relief measures for the industry ... so they can weather this crisis,” said Kallas in a statement on Tuesday.
“The commission is also proposing structural changes to ensure we do not face this situation again,” he added.
According to the International Air Transport Association (IATA), the estimated losses for the airlines have exceeded $1.7 billion worldwide. During the peak of the ash crisis, April 17–19, lost revenues reached $400 million daily, affecting 1.2 million passengers per day. Grounded airlines also incurred huge bills providing assistance to passengers.
The Association of European Airlines (AEA), which represents 36 major airlines, declared a total revenue loss of $1.4 billion, including canceled flights, fulfilling obligations to passengers, stranded crew costs, and parking at airports.
Among the immediate measures proposed by the EC vice president are establishing an expert group and developing a new methodology for risk management. In terms of relief, he makes it clear that state assistance needs to be applied uniformly, in the form of loans granted at market conditions, using uniform criteria, and it should not be in the form of state aid to ensure a level playing field for all companies. Also, air passenger rights need to be uniformly respected and consistently applied across the EU.
In the short term, to tackle cash flow problems, the EC proposes that airlines be able to keep their unused slots—usually valid only for a specified departure—to use in the future. It also recommends European Organization for the Safety of Air Navigation Eurocontrol and members states assesses the option of temporarily deferring route charges.
Kallas also proposed medium-term and structural changes such as giving highest priority to the Single European Sky II package (SES II), due to come into force in 2012. SES II aims at redesigning the European sky based on traffic flows rather than national borders. Taking into consideration the current situation, EU Transport commissioner highlighted the need to fast track many elements of SES II by the end of 2010, especially appointing a European network manager.
Other measures Kallas put forward include creating pan-European mobility plans to facilitate switching passengers to other modes of transport if one sector falls into crisis. Lastly, the VP wants to establish an aviation platform, convened by himself, to better coordinate with the air transport sector, and to follow up on the proposed crisis-management measures.
The proposals package will be discussed at an extraordinary ministerial meeting in Brussels on May 4. If it is approved, the EC plans to implement immediately its package of short-term and temporary relief measures.
