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Directors General for Civil Aviation discuss the crisis
Stefano Baronci, Research Analyst, ACI EUROPE reports
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EUROCONTROL offices: On the 9th April 2003 the European Commission met with the Directors General for Civil Aviation and industry stakeholders to discuss developments in the air transport industry since the start of the conflict in Iraq and to define appropriate solutions to assist the air transport industry.
John Hume, Director of Policy, ACI EUROPE, outlined the situation facing member airports, namely a plunge in passenger numbers since the outbreak of conflict in the Middle East. In Europe, global passenger traffic declined sharply resulting in an overall decline of 5% for international passengers in March 2003 compared with March 2002. The last ten days of March 2003, i.e. the days impacted by the war in Iraq, saw passenger numbers declining sharply at many European airports (Lisbon Airport -22.8%, Malta -17.2%, Manchester airport -12%, Schiphol -12%, Turin Airport -11.1%, Rome Fiumicino -6,7%). As a result of the current crisis, some airports have taken the decision to put all investments on hold, such as at Schiphol Airport, which has postponed its investment projects for around two years.
Hume highlighted the importance of immediate intervention from the European Commission especially in the fields of insurance and security. Insurance coverage has not been suspended, but market conditions still remain very uncertain since 11 September 2001. On a European level, the current market is still essentially composed of two main insurers AIG and Allianz, and one player at the re-insurance level. However, the Allianz scheme is based on a one year period, which will end in October 2003. Furthermore, Allianz is due to consider this month if they wish to remain in the war risk insurance sector beyond October 2003. If Allianz withdraws from the market, airports would be faced with a monopolistic situation.
As far as aviation security is concerned, the immediate enhancement of security measures post 11 September 2001 and the resulting implementation of the EC Regulation provisions have already brought about considerable security cost increases. Yet, European airport operators (such as Copenhagen, ADP, Munich and Aena) have each undertaken additional measures to strengthen security as they have deemed appropriate. Since security measures are mostly financed directly by the airport operator, it was pointed out that these additional security expenditures are further deepening the financial crisis facing the airport industry.
It is remarkable that the most recent Transport Council meeting only envisaged a favourable examination of certain specific measures for airlines (not airports), while the European Commission’s communication on the consequences of the war in Iraq included airports, ground handling operators and air traffic controllers. ACI EUROPE is actively demanding that there be specific reference to airports in these proposed measures and that the ‘favourable examination’ of State Aid relates not only to new, additional security measures but that is also be retroactive for the security measures post 11 September 2001.
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