Day one
Day one of the ERA Regional Airline Conference 2016 opened in Prague on 6 April. This annual event increases in popularity every year and the 2016 conference was completely sold out.
The Airline and Airport CEOs’ Breakfast and Meeting, which included an informative keynote address from Luc Tytgat, Director, EASA, on changes to EASA’s Basic Regulation, kick-started the day. This was followed by a networking lunch with the conference’s first open session straight after.
The rules of regulation
Simon McNamara, Director General, ERA, chaired the session “Regulation – friend or foe?”. He focussed on the increasing amount of legislation and policy from the European Commission and Parliament that is moulding the strategic growth, development and future success of regional aviation.
Boet Kreiken, Managing Director, KLM Cityhopper and ERA President, Jon Horne, Chief Operating Officer, London Southend Airport, Jan Palmér, Nordic Aviation Group and Luc Tytgat, Director, EASA, all contributed to what proved to be a lively debate about the relationship between the regulator and industry. Key questions discussed included whether the Commission’s recently published Aviation Strategy is a help or hindrance to regional aviation and whether it is doing enough to enable a fair and competitive marketplace.
The role of regulation in safety and the highly contentious EU261 which has stalled in Parliament were also the subjects of debate.
Current system
Criticisms of the current regulatory system revolved around the industry’s belief that over-regulation is detrimental and that regulators who are responsible for such legislation lack practical aviation experience. The general consensus from the audience was that regulators need to be educated as to the real-life issues and challenges that regional aviation in Europe is facing.
Kreiken warned that security-related regulation is often not compatible with other pieces of legislation, for example privacy, and that a less complicated approach to regulation is needed. Palmér also expressed concern about the lack of consistency across Europe when it comes to applying aviation-related legislation.
The audience was in agreement that the EU Aviation Strategy must be shown to achieve real benefits for the business through new and appropriate regulation.
New investment
The second session of day one was a very popular event: “It’s all about the money – attracting new investment and managing risk”.
In the session, chaired by Jörg Troester, Senior Vice President Corporate Strategy, Hahn Air, three expert panellists discussed key topics including “The complexity of re-fleeting in an industry short on capital” from Garry Topp, CCO, GA-Finance; “Regional airline investment: how hard is it to secure funding?” by Saad Hammad, CEO, Flybe; and “Foreign currency risks and solutions: making the most of the market” from Trevor Charsley, Senior Market Analyst, AFEX.
Delegates were keen to discuss the practical issues of raising funds in the regional air market and debated the various avenues for sourcing investment including conventional banks, private equity firms and entrepreneurs.
Topp’s focus on the difficulty of re-fleeting in one of the worst markets ever for capital raising was illuminating. While private equity is available, Topp felt that aviation leasing will continue to grow in popularity in the regional sector, although leasing is not currently very efficient. Attracting new sources of investment into regional airlines will continue to be a challenge.
Fragmented space
While Topp noted that the airline sector is not for the faint hearted and it is an extremely tough industry he did say that it is looking more attractive with record profits in 2015. He added that there is significant growth potential in what is a fragmented space.
Hammad’s review of how he managed to attract investment into an ailing Flybe was very well received and he advised that airlines need to focus on their key sectors and react to market demands.
The final topic of the afternoon’s session – the complex issue of managing foreign currency risk was debated by Charsley. He managed to make this challenging subject both interesting and accessible – no easy feat.
Delegates regrouped at the evening’s cocktail session to network and continue discussing business opportunities. A great close to a fantastic first day.
Day two
The second day of the Regional Airline Conference 2016 opened with the third session of the event – a focus on the importance of creating a modern, flexible workforce suitable for a global industry. Unions have branded the recent new working practices of airlines as unfair, referring to them as “social dumping” while airlines believe that these “new working practices” are essential for a truly global workforce.
This informative session reviewed how to ensure the right balance between employee rights and company efficiency, considering the legal implications of employing crew from different regions at cheaper prices and whether this crosses a social and ethical line.
Legal complexities
Chaired by Mikael Wångdahl, Chairman of the Board, Cimber, speakers for the session included Ian Reece, Group Personnel Director, ASL Aviation Group who gave an informative presentation on the practical day-to-day realities of managing a workforce in the aviation industry, Phillip Ashley-Smith, founder and CEO of PAS Aviation Group and Gina Wilson, Partner, Clyde & Co., who focussed on the legal complexities of managing a European cross-border workforce with reference to the European Commission’s Aviation Strategy.
Wilson said that there are laws in place to protect workers but there will always be challenges when multiple jurisdictions come into play and that it is a case of balancing interests. Wilson added that no immediate legal changes are expected but current legal protection needs to be clarified.
Supply and demand
Ashley-Smith looked at recruitment, issues of supply and demand including availability of pilots, pay-to-fly and the role of unions. He also considered the key issues of cross-border employment, taxation and social insurance, crew leasing and white label and ACMI.
Cyber security
Inspirational speaker Graham Cluley gave the final presentation of the conference on the growing and real threat to the airline business of cyber hackers. Cluley brought the very real dangers of cyber security alive and gave expert advice on how to protect businesses from this ever-increasing threat.
The final networking buffet luncheon was a great close to the event. An increasing number of delegates register for the Regional Airline Conference each year making it one of the must-attend conferences for European aviation. Thanks to all the delegates who attended this year’s event.
Make sure you register for the ERA’s General Assembly 2016, this year held in Madrid on 11–13 October. We look forward to seeing you there.