Thursday, January 21, 2016

New European Airline Lobby Group Targets Airport Charges: New trade body, Airlines for Europe, brings together some unlikely bedfellows

An Air France Boeing 777 aircraft lands at the Charles de Gaulle International Airport in Roissy, near Paris. In a new thrust, Europe’s largest carriers have formed a new lobby group.

The Wall Street Journal
By Robert Wall and Daniel Michaels
Updated Jan. 20, 2016 1:11 p.m. ET

AMSTERDAM—Europe’s largest air carriers have formed a new lobby group in a move to sway government policy as the European Union considers far-reaching moves on issues from passenger-travel rights to airline ownership rules. What’s more, the group has a first target: airport costs.

The new trade body, called Airlines for Europe to parallel its U.S. counterparts’ association, Airlines for America, brings together some unlikely bedfellows. It includes former national carriers such as of Air France-KLM SA and Deutsche Lufthansa AG, and their fierce upstart rivals Ryanair Holdings PLC and easyJet PLC, Europe’s biggest discount carriers. The network carriers and budget airlines were previously in rival trade bodies.

“All European airlines are invited to join,” Lufthansa chief executive Carsten Spohr said at the launch of A4E, as the group is called.

Europe’s airlines have often failed in their efforts to lobby European governments on issues from environmental regulations to passenger refunds in case of delayed flights. And airlines’ calls for Europe to streamline air-traffic management across the bloc to lower costs has foundered against opposition from EU member states.

European transport commissioner Violeta Bulc welcomed the establishment of the lobby group to help shape future aviation plans.

Airlines have long bemoaned that airports, which are often highly regulated by governments, are raising costs at a time the carriers are being forced to cut ticket prices amid stiff competition. That issue has now become the first campaign target of the new lobby group.

“While the airlines have reduced their fares, EU passengers continue to be fleeced by excessive airport charges,” the airlines said on Wednesday.

The airline group cited data that alleges costs at 21 of Europe’s largest airports have risen 80% since 2005, while airfares have declined 20% over that period. Passengers are paying EUR5.4 billion ($5.9 billion) more in airport charges now than a decade ago, they said.

Airports in the U.K., Switzerland and Germany have Europe’s highest per-passenger airport fees, they said.

“This shows a failure of regulation,” Air France-KLM Chief Executive Alexandre de Juniac said.

Olivier Jankovec, director general of airport lobby group ACI Europe said the airlines were taking “a liberal and inaccurate swipe at our industry, while the airlines paint themselves as consumer champions.” Airlines aren't paying the full costs of the infrastructure they use, he said.

Mr. Jankovec said the airline lobbying push is a “tired call for even more regulation of airports (and) is just about boosting their profits or supporting their own lack of competitiveness.”

The carriers are calling on the EU to make changes in how airports can levy charges to lower costs.

The new lobby group will operate with a restricted mandate after an older trade body last year broke apart over sharp policy differences among its members.

Air France-KLM and Lufthansa had urged the previous association to take a strong protectionist stand against fast-growing Middle Eastern carriers such as Emirates Airline and Qatar Airways, which some European airlines accuse of being subsidized. The Mideast carriers deny the charge.

British Airways parent International Consolidated Airlines Group SA and some others, seeking a more liberal approach, terminated their membership.

The new trade group members discussed whether to lobby on the Mideast carrier issue. Willie Walsh, chief executive of British Airways parent International Consolidated Airlines Group SA, said the group agreed “to focus on areas where we have common ground.”

Ryanair Chief Executive Michael O’Leary said the airlines agree on 80% of the issues affecting 95% of consumer needs.

The European Commission, the bloc’s executive arm, last month spelled out plans to boost the competitiveness of the region’s airline industry, including seeking more far-reaching, air-traffic treaties with other countries including those in the Middle East. The proposal got an initial lukewarm response from airlines and pilots, who said it lacked specifics.

“Europe needs a clear plan to improve the competitiveness of aviation compared with the rest of the world,” Mr. Spohr said. Lowering costs across the supply chain is critical, he said.

Mr. O’Leary said airlines expect action from the European Union this year.

Original article can be found here:

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