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IATA Discusses New EU Aviation Package

by Ulrika Lomas,, Brussels

26 November 2015

The International Air Transport Association (IATA) has called on the European Commission to ensure that the upcoming European Union Aviation Package strengthens the competitiveness and connectivity of the European economy and benefits European consumers.

"Air connectivity is a crucial driver of economic and social prosperity in the EU," said Tony Tyler, IATA's Director General and CEO. "Strong connectivity needs strong airlines. But Europe's airlines are struggling, in part because they are hampered by unreasonable taxes, high costs for inefficient infrastructure, and regulations unfit for purpose. An effective Aviation Package must help to alleviate these burdens."

The Aviation Package was included in the European Commission's work program for 2015, and is expected to lead to a Commission Communication identifying challenges and measures for improving the competitiveness of the EU aviation sector by the end of the year. The Commission has also carried out a consultation exercise with the European aviation industry this year on possible measures that can increase the competitiveness of the EU aviation sector.

IATA is calling upon the Commission to use the Aviation Package to consider five areas of key concern to the European aviation industry, including passenger taxes, security measures, consumer protection regulations, carbon emission restrictions, and air traffic management modernization.

Additionally, the association urged the Commission to consider regulations to "rein in" airport charges. According to IATA, since 2000, the price of air tickets has fallen by 37 percent whereas airport costs per passenger have risen more than 30 percent, both in real terms. "Airports are failing to match airlines in their efforts to reduce costs and provide better value for money for consumers," IATA said.

Since 2010, the profitability of European airlines have lagged behind their counterparts in North America by a cumulative USD29.8bn, and European airlines have operated on an average margin of 2.3 percent before interest and taxes. Weaknesses in the EU aviation market and Europe's more fragmented regulatory environment are partly to blame for these results, IATA suggests.

"Air transport in the EU supports more than 9m jobs and EUR500bn in GDP. It is an industry of supreme strategic significance to Europe and its citizens," said Tyler. "But a history marked by a collective failure of vision by European policy makers has restricted the benefits of air connectivity. The Aviation Package is a long-overdue opportunity to reinforce the foundations of European aviation."

TAGS: environment | tax | European Commission | interest | aviation | regulation | Europe | North America

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