EU Aviation Policy Issues. An Update.

Transcription

1 EU Aviation Policy Issues NOUVELLE LÉGISLATION An Update. EUROPÉENNE POUR Mr. Olivier Onidi ÉCONOMISER L ÉNERGIE Head of Internal Market, Air Transport Agreements and Multilateral Relations Air Transport Directorate, Directorate-General Améliorer for les Energy bâtiments and Transport, European Commission Department Speaker s name 52 nd AAPA Assembly of Presidents 20/11/ November 2008, Taipei

2 Presentation Outline 1. EU Aviation Market Trends 2. Recent EU Aviation Developments, Current Priorities and New Challenges 3. Modernising the Internal Market Regulation 4. Aviation & Environment - Sustainable Growth 5. Aviation Safety 6. EU External Aviation Policy 2

3 EU Aviation Market Trends 3

4 . Some EU Aviation Facts & Figures 140bn business in million passengers in 2007 (of which 270 million/34% Extra-EU), representing a third of the world market 4

5 Some EU Aviation Facts & Figures Revenues and margins in 2007 by region 7% 6% 5% 4% 3% 2% 1% 4,5% 3,8% 3,8% 5,0% Operating margin Net margin Revenue 2,6% 1,7% Revenue in million $ 0% North America Europe Asia-Pacific Middle East Latin America Africa 0 Source: Airline Business, TOP150 airline groups 5

6 2007: A good year for European Air Transport Aggregate Net Profits by nationality of carrier [USD bn] North America +2.8 Latin America % 31.1% AEA Europe +5.1 Africa % 29.5% Middle East % Asia-Pacific % Worldwide Traffic share (seats offered) Source: AEA / OAG / IATA 6

7 Outlook 2008: Minimal profits for the industry Operating Profits, before interest for AEA Airlines [bn EUR] 4.2* -0.3 Result change to last years period Year 2007 actual Q1 actual Q2 actual Q3 estimate Q4 estimate Year 2008 estimate Source: AEA *Operating Profit 2007 be EUR 4.2bn before interest or EUR 3.7bn after interest Estimates for Q3 and Q4 are based on a profit decrease of -50% compared to previous year. 7

8 Changes in EU Airline Ownership Air France-KLM Lufthansa-SWISS Lufthansa-Brussels Airlines Lufthansa-bmi KLM-Martinair. Iberia-Clickair Next? Ongoing merger talks:» BA-Iberia» Alitalia in talks with LH and AF» Austrian in talks with LH and AF. Further General IATA» SAS in talks with LH consolidation is expected and necessary need for normalising rules on ownership and control Agenda for Freedom Summit - Istanbul October

9 Recent EU Aviation Developments, Current Priorities and New Challenges 9

10 Key Objective Driving EU Policy: Ensuring Sustainability of the Sector s Growth Means: 1. Competitiveness of the industry Cost reductions and efficiency 2. Avoid/reduce bottlenecks On the ground and in the air 3. Ensure environmental sustainability Comprehensive approach 4. Extend success of the single market beyond Europe 10

11 Current Priorities 1. Consolidation/simplification of legislation Revision of 3rd Package; CRS 2. Safety first - Continuous improvement EASA, EU-OPS, Black-list 3. Decrease costs of airlines Directive on airport charges (9/ ), CRS, Single European Sky 4. Increase capacity Airports (Observatory, Action Plan) Secondary trading of slots ATM, Single European Sky (2 nd Package) 5. Reduce environmental impact R&D, ATM reform, Market-based measures such as ETS 6. External Relations Restore legal certainty Neighbourhood enlarging the single market Global agreements with key partners 11

12 Recent EU Aviation Developments Extending EASA s competencies Airworthiness Pilot license; operational safety; authorisation and inspection of partner countries carriers Airports, ATM EU-OPS: Harmonised operational safety rules Single European Sky Independent regulators and service providers; functional airspace blocks & performance targets Security Rules Common rules at airports, EU inspections, liquids Airports Action plan on airport capacity Proposal for Directive on airport charges Consolidating and updating the Internal Market Revision of Third package Revision of CRS Code of Conduct PNR 12

13 Modernising the Internal Market Regulation 13

14 Revision of the Third Package (1) Regulation 2407/92 on operating licences Regulation 2408/92 on market access Regulation 2409/92 on air fares One single Regulation for the internal aviation market 14

15 Revision of the Third Package (2).Remove obsolete articles.ensure the consistent application of the rules throughout the EU, particularly concerning the monitoring of the operating licences.clarify rules concerning PSOs and airport systems.improve price transparency for passengers 15

16 Revision of the Third Package (3) Main changes with regard to the operating licence:.clarification of the definition of the «principal place of business».clarification of cases in which the licence should be suspended or revoked by the national authorities.clear rules for the wet-leasing of aircraft from third countries 16

17 Revision of the Third Package (4) Main changes with regard to market access:. Public service obligations: Simplified publication requirements Maximum concession period: four instead of three years Creation of an emergency procedure in case of failure of the selected air carrier. Simplification of the rules concerning airports serving the same city: Abandonment of the concept of an airport system Clear rules with regard to traffic distribution Traffic distribution rules must be approved by the Commission 17

18 Revision of the Third Package (5) Main. changes with regard to air fares: Full price freedom for all air carriers no further need of. safeguard rules Publication of all-inclusive air fares (including all unavoidable. taxes, charges and fees) Non-discriminatory access to air fares for consumers and travel agents 18

19 Complementary Legislation: Computerised Reservation Systems CRSs act as intermediaries between the airlines and the travel agents. Airline CRS Travel agent Consumer Currently, three CRS providers offer their services in the EU: Amadeus, Sabre and Travelport. 19

20 CRSs in the Past Twenty years ago: All the CRSs were owned by airlines CRS had a quasi-monopoly over the distribution of airline tickets This created risks of abuse, for example via biasing the CRS displays or granting the own CRS a privileged access to the airline s fares. The Code of Conduct had a preventive role but did not allow free negotiations between airlines and CRSs. 20

21 Why Revise the Code of Conduct? 1. The market has changed: Alternative distribution channels now cover 40% of all air bookings, the CRSs have lost their natural monopoly. The increasing competition creates market pressures on the CRSs. Markets outside the EU have been deregulated (USA, Canada) 21

22 Why Revise the Code of Conduct? Market share of distribution channels: Direct (internet, call centers, airlines' offices) 38% Brick-and-mortar travel agencies 54% Online travel agents 8% Source: Commission estimates 22

23 Why Revise the Code of Conduct? 2. The Code is having counterproductive effects: The Code s detailed provisions stifle price competition. The lack of competition increases the cost of CRS services which are ultimately paid by the passenger. Higher than necessary booking fees incite airlines to distribute an increasing share of their tickets via alternative booking channels such as their websites. Travel agents and their customers may miss interesting offers. 23

24 What are the Objectives of the New Regulation? Simplify and modernise the Code of Conduct Reduce distribution costs in the airline sector Increase the offer of travel choices in the CRS Safeguard against competitive abuses Protect consumers interests 24

25 The New CRS Regulation Today: prescriptions with regard to content and nondiscriminatory booking fees do not allow negotiations over individual discounts. Tomorrow: Negotiating freedom: air and rail travel providers will be able to freely negotiate content and booking fees with the CRSs. This will enhance competition between CRSs on the basis of booking fees and service quality and will lead to reduced distribution costs. 25

26 The New CRS Regulation and Consumers Neutral and unbiased information: flights and rail solutions must be ranked with regard to neutral criteria, such as the price or the travel time. Taxes, charges and fees: information on fares should be displayed inclusive of all applicable taxes, charges and fees. This allows unbiased comparison of the prices of air and rail tickets. Personal data protection: the proposal reinforces the provisions with regard to the protection of personal data processed by the CRSs. Code of Conduct for computerised reservation systems 26

27 Aviation & Environment: Sustainable Growth 27

28 Climate Change.Climate change: a global challenge of an unprecedented dimension.a general objective: limit temperatures increase by 2 C maximum.eu has already committed itself to reduce its GHG emissions by a minimum of 20% by 2020 compared to the 1990 level. NOUVELLE LÉGISLATION EUROPÉENNE POUR ÉCONOMISER L ÉNERGIE 28 28

29 Why New Measures for Aviation? Development of EU-25 GHG emissions 100,0% 80,0% Growth over ,0% 40,0% 20,0% 0,0% -20,0% Year International aviation GHG emissions % over 1990 Total GHG (without LUCF) % over

30 The EU s Comprehensive Approach to Aviation s Climate Change Impact 1. New Standards 2. Support for Research and Development of New Technology 3. ATM Modernisation 4. Market-Based Measures 30

31 EU Emission Trading Scheme.A market-based instrument allowing GHG emitters to reduce their emissions at lowest possible cost.central pillar of EU Climate Policy.Applied since 1 January 2005.Covers around 50% of EU emissions (2 billion tonnes of CO 2 emissions).cap-and-trade system.open scheme trading between sectors for least cost emissions abatement.national allocation plans used to allocate allowances.possibility for linking with other schemes 31

32 Why Include Aviation in the EU ETS?.Among the possible market-based measures, ETS is the most efficient and the least expensive option.this is the preferred option of the air transport industry.most importantly, it allows for further growth of the aviation sector while rewarding environmentally efficient carriers 32

33 The Draft Aviation ETS Directive.Will apply from 2012.Covers all flights to, from and within the EU.The method of allocating allowances is harmonised throughout the EU.Revenues are earmarked for tackling climate change in the EU and third countries 33

34 The Draft Aviation ETS Directive.The responsible entities are aircraft operators.each operator is subject to only one administering Member State.Each operator has to monitor and report its emissions to the administering Member State.Allocated allowances are tradable among aircraft operators and they can buy and use allowances from other sectors 34

35 The Draft Aviation ETS Directive In 2012:.Emissions cap is fixed at 97% of the average emissions in the reference period % of allowances allocated free of charge.15% of allowances to be auctioned 35

36 The Draft Aviation ETS Directive In the trading period (the third period of the general EU ETS):.Emissions cap is fixed at 95% of the average emissions in the reference period % of allowances allocated free of charge.15% of allowances to be auctioned 36

37 What is the Estimated Impact of Aviation s Inclusion in the EU ETS?.Economic impact:» All airlines will be treated equally» By 2020 tickets could increase by 4.6 to 39.6 depending on the journey length and allowance price» Benefits for developing countries through CDM and JI.Environmental Impact:» An annual reduction of over 180 Million tonnes of CO 2 in 2020 compared with business as usual For more info: NOUVELLE LÉGISLATION EUROPÉENNE POUR ÉCONOMISER L ÉNERGIE 37 37

38 A Relevant Comparison: 0,7 Jet fuel price development corrected for inflation (2007 prices) Fuel price (USD/liter, 2007 prices) 0,6 0,5 0,4 0,3 0,2 0,1 0Full picture slide Year $/liter (2007 prices) Level of additional cost due to ETS in the worstcase scenario (allocation only through auctioning) with 21 EUR/ton CO2 (Source: Fuel price: US Bureau of Transport Statistics, CPI: US Bureau of Labour 38 24

39 Where Are We in the Decision-Making Process?.The European Parliament adopted a compromise proposal in Plenary on 8 July 2008.The Council of Ministers adopted this proposal on 24 October 2008.The Directive will enter into force early 2009 with Member States having one year to adopt national implementing rules.in the meantime, the Commission is preparing rules on Measurement, Reporting and Verification (MRV) for adoption mid in order to qualify for free allowances, airlines will need to report tonne-km data in 2010, for which a monitoring plan must be submitted and approved in

40 What Complementary Actions are Being Pursued at Global Level?.Within ICAO (GIACC) to identify concrete actions applicable worldwide.within UNFCCC to set clear targets and guidance.on a bilateral basis to ensure that national/regional initiatives are properly coordinated 40

41 Third Country Provisions in Draft Aviation ETS Directive Equivalent measures:.where 3 rd country adopts measures to reduce climate change impact of flights to the EU: EU will consider options to provide for optimal interaction, e.g.: (1) exempt arriving flights (2) amend the EU Directive (3) negotiate agreement with 3 rd country.in case of agreement on global measures, the EU will consider amending Directive as necessary 41

42 Text + picture slide CONCLUSIONS ON ENVIRONMENT.Select and throw away the current photo climate» Insert change your new photo» Double-click on it, choose: size/height/9.13/ok» Put the photo in the right bottom corner.aviation is compelled to contribute to the fight against.only a comprehensive policy based on operational measures (Single Sky), research (Clean Sky) and technological development (SESAR), accompanied by Right-click on it and market-based measures (ETS) can deliver the select Order/in Background environmental improvements required Then adjust the position.the major challenge now is to agree on a common approach with international partners NOUVELLE LÉGISLATION EUROPÉENNE POUR ÉCONOMISER L ÉNERGIE 42 42

43 Aviation Safety 43

44 Topical EU Aviation Safety Issues: EU OPS Entered into force in July nd Extension of EASA competences (aerodromes, ATM/ANS) Proposal June 2008 EU Black-list Updated November 2008 (to be published mid-november) 44

45 Expanding Commercial Opportunities Outside Europe: Three Pillars 45

46 Going Beyond Europe: The Three Pillars of the External Dimension I. Bringing existing bilateral agreements into line with Community law II. The creation of a Common Aviation Area with neighbouring countries III. Conclusion of ambitious global agreements with key partners (US, Canada, Australia, New Zealand, India, China, Russia.). 46

47 Pillar I: Progress on the Legal Issue Nearly 100 non-eu states have accepted Community designation More than 750 Bilateral ASAs have been brought into conformity with Community law 44 Horizontal Agreements covering 630 ASAs (since September 2004) Negotiations/talks on-going with remaining countries (of which only five significant). 47

48 Pillar II: Common Aviation Area by 2010 Southern and Eastern neighbouring countries Pre-accession context: Western Balkans (ECAA) ECAA Agreement signed in June 2006 (Gradual liberalisation and market integration in function of degree of regulatory convergence achieved) Morocco (Euro-Mediterranean agreement) EU-Morocco Agreement signed in December 2006 Next: Ukraine, Jordan, Israel, Lebanon, Tunisia, Algeria Particular case of Russia (Siberian Over-flight) 2008 EC Communication on neighbourhood policy in aviation Towards a single market of some 50 states by

49 Europe of Tomorrow A Wider Common Aviation Area 58 States Approx. 1 Billion inhabitants 49

50 Pillar III: Comprehensive Agreements With key and like-minded partners Aim: to normalise aviation By: market opening removing investment barriers regulatory convergence First: EU-US Agreement (1 st stage) Signed in April 2007 Applicable as of 30 March 2008 Second phase negotiations started in May 2008 Next: Canada (To be finalised November 2008) Australia and New Zealand (To start November 2008) 50

51 Thank you for your attention! Vielen Dank fuer Ihre Aufmerksamkeit!