Transcription
Recent developments in theEuropean aviationOpportunities & ThreatsSimon McNamaraDirector GeneralEuropean Regions Airline Association (ERA)www.eraa.orgtwitter.com/eraaorg
Contents European air traffic developments What drives the development of aviation SafetySecurityEnvironmentEconomic climateCompetitionRegulation & politicsAirport capacityAir traffic managementIndustry profitability Conclusions and recommendationswww.eraa.orgtwitter.com/eraaorg
Traffic developmentswww.eraa.orgtwitter.com/eraaorg
European traffic in 2013Source: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
Flight growthSource: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
Flight growth – rolling trendSource: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
Forecast flight growth - 2014Source: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
Flight growth – 2019 vs 2012Source: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
Regional Hub feedingwww.eraa.orgtwitter.com/eraaorgSource: Jean-Yves Grosse, Chairman, Regional presentation at ERA RAC2013
Regional Point to Pointwww.eraa.orgtwitter.com/eraaorgSource: Jean-Yves Grosse, Chairman, Regional presentation at ERA RAC2013
Threats and Opportunities Long term growth will happen – opportunity Air travel is an essential part of life – opportunity The periphery and regions of Europe rely on airtravel more than the ‘core’ of Europe –opportunity and threatwww.eraa.orgtwitter.com/eraaorg
What factors drive air travel?www.eraa.orgtwitter.com/eraaorg
Factors affecting the industry SafetySecurityEnvironmentEconomic climateCompetitionRegulation and politicsInfrastructureIndustry profitabilitywww.eraa.orgtwitter.com/eraaorg
Factors affecting the industry SafetySecurityEnvironmentEconomic climateCompetitionRegulation and politicsInfrastructureIndustry profitabilityMust happenVariablewww.eraa.orgtwitter.com/eraaorg
Economic climatewww.eraa.orgtwitter.com/eraaorg
Real GDP growth - EU CountriesSource: European EC Economic Forecast, Autumn 2013www.eraa.orgtwitter.com/eraaorg
Real GDP growth EU CountriesSource: European EC Economic Forecast, Autumn 2013www.eraa.orgtwitter.com/eraaorg
The status of European air travel In Europe, modest economic improvementsduring Q2 and Q3 2013 and climbing consumerand business confidence have provided astronger demand for international air travel The Eurozone stopped contracting in Q2 andhas maintained the modest economic recoveryin the second half of 2013. The recovery remains fragile and patchySource: IATA Oct 2013 Pax market analysiswww.eraa.orgtwitter.com/eraaorg
Threats and Opportunities The economy remains fragile – threatConsumer confidence still low – threatSmall airlines more at risk of failure – threatSigns of a recovery in the economy – opportunitywww.eraa.orgtwitter.com/eraaorg
Competitionwww.eraa.orgtwitter.com/eraaorg
A changing business landscapewww.eraa.orgtwitter.com/eraaorg
A changing business landscape Low cost airlines shook up Europe in the ‘90s’and ‘00s’ All existing companies have had to adjust theirbusiness models to survive A progressive convergence of low cost andnetwork airline business models is occuring Very few small independent airlines left Flexible ‘leased’ capacity is a growing market On-going changes in ownership and controlwww.eraa.orgtwitter.com/eraaorg
Regulation and politicswww.eraa.orgtwitter.com/eraaorg
Today’s regulatory world Europe now develops a wide range of technicaland non technical regulationMuch of it is beneficial to the industry, but much ofit adds complexity and cost and limits theflexibility of operators to be entrepreneurialOver the last 20 years in Europe we have seen agradual “re-regulation” of the industry on nontechnical issueswww.eraa.orgtwitter.com/eraaorg
Many parties are involvedGround handlersEuropean Civil Aviation Conference (ECAC)Member statesEuropean ParliamentEuropean CouncilNational Safety AuthoritiesEuropean CommissionAirportsNational Regulatory AuthoritiesEuropean Aviation Safety Agency (EASA)Air Navigation Service ProvidersUnionsAirlinesFlight CrewPassenger groupsManufacturersICAOMember StatesThe “green” lobbyistswww.eraa.orgtwitter.com/eraaorg
Current regulatory issues Passenger rights rulesGround handling rulesAirport slot allocation rulesCarriage of Persons with Reduce Mobility (PRMs)State aid rulesSingle European SkyEU Emissions Trading SchemeRevision of the EU Noise DirectiveContingency planningSecurity rulesSafety rulesMaintenance rulesOperations rulesFlight Time Limitations, Flight Crew Licencingwww.eraa.orgtwitter.com/eraaorgFatigue Risk Management
The effect of politics European institutions and laws have a huge effecton the airline business European ParliamentEuropean CouncilMember StatesEurocontrolEuropean Aviation Safety Agency These bodies drive the major strategic direction ofaviation Politics impacts all of these bodieswww.eraa.orgtwitter.com/eraaorg
Threats and Opportunities Poor industry image impacts political decisionmaking – threat Regulation is hard to change – threat Politics has a significant impact on regulation –threat and opportunity Industry lobby is relatively weak – threat Industry has a recognised voice – opportunity There is no clear plan for European air transport– threat and opportunitywww.eraa.orgtwitter.com/eraaorg
The airport capacity challengewww.eraa.orgtwitter.com/eraaorg
The airport capacity challengeSource: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
The airport capacity challengeSource: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
The airport capacity challengeSource: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
The airport capacity challenge By 2035,1.9 million annual flights cannot beaccommodated (12% of total demand) An estimated 120 million passengers unable tomake their planned trips. Turkey and the UK have the most unaccommodated demand 20 airports are operating at 80% or more ofcapacity for 6 or more hours per day, comparedto just three in Summer 2012Source: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
The airport capacity challengeAirports with Summer delays (in minutes/flight) –2012 vs 2035Source: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
Threats and opportunitiesMitigating solutions (other than building runways) Larger aircraft - threat High Speed Train - threat Local alternatives – opportunity Air traffic management changes – threat andopportunitySource: Eurocontrolwww.eraa.orgtwitter.com/eraaorg
Air traffic managementwww.eraa.orgtwitter.com/eraaorg
What is the problem?In 2011, the failure to implement a single europeansky resulted in: 17.9 million minutes of delays costing anestimated 1.45 billion; 8.1 million tonnes of wasted CO2 3.73 billion in costs from flight inefficiencies A total economic cost of 13.49 billion (made upof costs, delays, etc)www.eraa.orgtwitter.com/eraaorg
Europe Vs US - 2012www.eraa.orgtwitter.com/eraaorg
Threats and Opportunities New investment in technology – threat andopportunity Larger aircraft – threat Increasing delays – threat Spiralling costs of supporting an old system –threat Secondary airports pick up the slack –opportunitywww.eraa.orgtwitter.com/eraaorg
Industry profitabilitywww.eraa.orgtwitter.com/eraaorg
Airline profitabilitySource: IATAwww.eraa.orgtwitter.com/eraaorg
Airline profitabilitySource: IATAwww.eraa.orgtwitter.com/eraaorg
Revenue per departing pax US Source: IATAwww.eraa.orgtwitter.com/eraaorg
Fuel price developmentswww.eraa.orgtwitter.com/eraaorg
Threats and Opportunities The business continues to be marginal – threat High barriers and costs of entry for start-ups –threat and opportunity Niche opportunities still exists, especially forregional and small operators – opportunitywww.eraa.orgtwitter.com/eraaorg
Conclusionswww.eraa.orgtwitter.com/eraaorg
Future challenges Continued strongcompetition in the sector Europe’s economicprosperity will drive airtravel Pressure on revenueremains Pressure on costs remains Regulation and politics willimpact the business Airport and air trafficcapacity shortages are amajor block to growth Industry profitability willremain fragilewww.eraa.orgtwitter.com/eraaorg
Future challenges Safety, Security & theEnvironment are critical‘redline’ issues that mustcontinue to be improvedand addressedwww.eraa.orgtwitter.com/eraaorg
The future of the industry Aviation will remain avital transport mode forEurope The regions (includingFinland) will remainreliant on air travel forEuropean, domesticand org
The future of the industry In the face of achallenging andcomplex market it isessential that a clearstrategy and plan isdeveloped for nationaland European airtransportwww.eraa.orgtwitter.com/eraaorg
About ERA50 Airlines19 Airports96 Suppliers10 Manufacturerswww.eraa.orgtwitter.com/eraaorg
Amapola Flyg Atlantic Airways BelaviaAvion Express Wideroe PGA PortugaliaDOTMistral AirOlympic AirEastern AirwaysAegean Airlines Blue 1Binter CanariasAir NostrumAer ArannCityJet Luxair Titan Airways50 AirlinesGolden AirAir ContractorsAir IcelandSata Air AcoresSky ExpressAstra AirlinesTrade AirWest Air SwedenSkywaysAirlinair Air Urga Aurigny Air Services Avanti AirMalmo Aviation EurolotCimberDarwin Airlines HOP! Air Alps KLM CityhopperBMI Regional Estonian AirDanish Air TransportBlue Islandswww.eraa.orgtwitter.com/eraaorg
on the airline business European Parliament European Council Member States Eurocontrol European Aviation Safety Agency These bodies drive the major strategic di
