ERA’s annual Media Briefing was held at the Royal Aeronautical Society in London on 20 March 2018. This event, always popular with journalists, is an ideal opportunity for media to get the latest updates on ERA’s work and meet with senior representatives from the European aviation industry to discuss the current issues impacting aviation in Europe. This year’s event was well attended by a variety of key aviation journalists and trade media, including representatives from LARA, FlightGlobal, Air Transport World, AeroSpace, Aviation International News, Greenair Online and Travel Weekly.
The briefing was hosted by ERA Director General Montserrat Barriga, along with ERA’s President, Andrew Kelly, with an overview of the current European aviation market provided by industry expert Peter Morris, Chief Economist at Flight Ascend Consultancy.
A welcome from the President
For many of the journalists, the briefing was their first opportunity to meet the association’s new Director General and President. In his welcome, ERA President Andrew Kelly, who was elected in October 2017, thanked their predecessors and commented that they had left the association in rude health. He pointed to the wide geographic spread of airline members as being a key strength of the association. Kelly highlighted some of ERA’s recent successes, including two of its member airlines, KLM Cityhopper and Air Nostrum, having €546m of financing approved in principle for fleet renewal by the European Investment Bank (EIB), a direct result of an intensive lobbying campaign by ERA. Despite the positives, he also noted some ongoing challenges, some of which, such as EU261, threaten the very survival of airlines. ERA can provide a united voice to decision makers on such issues, which makes it an invaluable resource for its members.
Industry overview
Peter Morris, Chief Economist at FlightGlobal then gave the media a thought-provoking overview of the changing European aviation market. He began by reflecting on past trends and drivers of growth from 2005–2017, including the factors influencing changes in aircraft size and route length. He focussed on the way fluctuating fuel prices affect regional airlines in particular. “Fuel prices have had a critical role in shaping the regional market,” he stated, as they impact the economics of smaller aircraft on shorter journeys. He looked at the related factor of aircraft type; how the makeup of regional fleets had changed and the efficiencies to be gained from newer aircraft. Morris identified some potential opportunities for regionals, including working with network carriers to provide continuing connectivity to hubs, demand for sub-110 seat average departures and discarded markets looking for continuing service, and improved distribution technology offering scope to reach trans-European audiences at low cost. He summarised by saying; “a strong market potential for regional operators still exists, but needs real focus to succeed against the challenge of network airlines and of new wave carriers”.
ERA’s work
ERA’s Director General, Montserrat Barriga, then gave an update on ERA’s work and priorities. She gave the media an overview of membership of the association, covering the whole spectrum of the industry and spread across Europe. She covered the variety of airline business models operated by members – from independent airlines, to cargo carriers, ACMI and franchise operators. Despite this diversity, members share common goals and concerns, and find strength and unity in ERA membership.
Barriga then gave details of a recent survey made by ERA of its members which identified their key areas of concern. Members gave their top issues for as Brexit, regulatory burden, pilot shortage and consolidation. Barriga went on to explain the work ERA was doing in each of these areas for its members, through its lobbying work, publications and expert advice.
In terms of Brexit, ERA has published a position paper, maintaining that Brexit is a European issue, not just a UK issue, and has been extensively engaging with EU and UK authorities. ERA recently issued guidance to its members on Brexit, and also frequently updates members via its events and publications.
On the regulatory burden, Barriga focussed on EU261 passenger rights regulation. The regulation is currently being reviewed by the European Court of Auditors, looking at the actions taken by the Commission, inconsistencies, the way passengers are informed about their rights and the way they are enforced throughout the EU. “We need the revision to be concluded,” Barriga said. In the meantime, ERA has joined forces with other associations against new collective redress regulations.
The industry skills shortage (for both pilots and engineers) is also an issue concerning members. Barriga discussed the initiatives the association is supporting in this regard, including promoting exchange of information amongst members (with a dedicated panel at ERA’s Regional Airline Conference next month), a lobbying initiative with EASA to extend the age of retirement to 65 for pilots, for which the association is seeking a member volunteer, as well as promoting women in aviation to attract new talent to the industry.
With recent airline failures in the news, consolidation is a concern for members. Barriga stated that ERA members are generally strong and stable, although further consolidation is still likely. She stated that the association disagreed with the proposal for a common airline bankruptcy fund as this would penalise the prudent airlines, and passengers already have sufficient protections.
Barriga also gave details of ERA’s work supporting new sources of aircraft fleet financing, including its work with the European Investment Bank. She also noted other areas of focus including the environment, where ERA is lobbying to avoid dual market-based measure schemes in Europe, and supporting its airlines in preparation for the introduction of CORSIA.
Finally, the Director General covered ERA’s work on safety, including its regular interaction with EASA, the association’s Air Safety Group meetings as a forum for members to share best practice, and the publishing of STARs, which give guidance on safety issues.
Pressing questions
The media were clearly engaged with what the speakers had to say, and asked many questions. They were particularly interested in details of the EIB lending guideline for regional aircraft financing. Barriga explained that the association was encouraging more airlines as well as lessors to participate, but that criteria were quite strict, however the groundwork had now been done by the first airlines participating in the scheme.
There was also discussion on developments with PSOs. Barriga said that Filip Cornelis, EC DG MOVE would be discussing the European Commission’s airport capacity and connectivity index project to identify destinations with connectivity issues, at ERA’s next event, and that this project may lead to new PSO opportunities. Morris stressed that there were still a number of routes that can only be connected by aviation.
There was also questioning regarding the initiative on increasing the pilot retirement age. Kelly explained that his airline, ASL Hungary, was involved with a research project with the Hungarian CAA where its pilots will be monitored to measure physiological elements at various ages. The panel agreed that airlines must look at both cadet programmes and retirement age to solve the issue.
On Brexit, Barriga maintained the importance of having aviation-specific agreements and that these had not been present in the latest transition agreement. Morris agreed that airlines should be prepared and not be naïve about potential consequences.
The panel were queried on what they hoped would come out of the audit on passenger rights regulations. Kelly pointed out that currently extraordinary circumstances were interpreted differently in different countries and courts, with different precedents being set. Barriga said she hoped for consistency in interpretation so airlines know where they stand.
ERA would like to thank the media who attended the briefing and for all the work they do to help amplify ERA’s voice.