2017 ECAC/EU Dialogue
» Report

After two days of lively and thought-provoking debates, the joint ECAC-EU dialogue with the air transport industry proposed to promote investment and create suitable conditions to finance the future of European aviation.

Hosted by the Italian Civil Aviation Authority Ente Nazionale per l'Aviazione Civile, over 150 senior leaders from airlines, airports, air navigation service providers, manufacturers, industry organisations and regulators debated on solutions to promote investment in aviation, overcome its specific constraints and reap the social-economic growth potential of this critical sector.

ECAC President Ingrid Cherfils and European Commission Director General for Mobility and Transport Henrik Hololei opened the conference, while ICAO Secretary General Fang Liu delivered the keynote address. Italian Minister of Transport Graziano Delrio emphasised the topical and pressing nature of the investment issue in European aviation.

Ingrid Cherfils, ECAC President, highlighted "Investing is a pre-requisite for further development of the aviation sector and to ensure its short- and long-term sustainability. How to make the sector more attractive for investors, how to develop innovative solutions to maximise the 'return on investment' and secure long-term financing programmes are the challenges we, as regulators, policy-makers and industry representatives, need to address together."

Henrik Hololei, Director-General, DG MOVE, European Commission, emphasised "Aviation is about connectivity, openness and competition. We must maintain open markets and at the same time be defending European interests. The increasing demand for air travel is bringing up new issues and is putting up a real challenge for the future. We need to make these investments now in order to be prepared for the future. European regulation should support this."

Fang Liu, Secretary General, ICAO, said "Although aviation's socio-economic benefits are widely recognised, this has rarely translated into levels of investment necessary to optimise them. It is important for us to acknowledge in this regard that new forces are re-shaping the global investment landscape, including the economic and financial crisis, the emergence of new major outward investors, and recent indications that investment protectionism pressures may be on the rise. ICAO encourages States to take pragmatic measures to build a transparent, stable and predictable investment climate to support aviation development. These priorities apply to private investments, business reform and private finance initiatives, public-private partnerships or incentive schemes."

Session 1: State of play - Europe's needs in investment

Opening the session Rob Huyser, Acting Director General for Civil Aviation, Netherlands, said that the discussions must lead to innovative solutions. Aviation is constantly is innovating so new investment is needed.

Angela Gittens, Director General of ACI in her keynote speech said: "As we know, the aviation industry has the potential to be generators of value for many different stakeholders, from airports and airlines to wider economies and communities. But for aviation to continue being generators of value, our continued collaboration is necessary. The development of the aviation industry is symbiotic—we need governments to provide the right regulatory environment in which the industry can thrive: liberalization; a well-managed air navigation system; reliable and safe air carriers; and safe, secure and efficient airports that can accommodate the demand for air service. And all of us have to practice sound environmental stewardship. ACI seeks to work in partnership with governments, regulators and other aviation stakeholders to ensure that we develop a fertile ground for industry investments to achieve the 2030 Sustainable Development Goals."

Stephen O'Driscoll, Head of Air, Maritime and Innovative Transport, European Investment Bank,  stressed that investments in aviation need to be eligible and viable (and this means that needs to be technically sound and to have strong economic rationale, environmental clearances and procurement directives.

Nicolas Notebaert, Chairman, VINCI Airports, CEO VINCI Concessions, from his point presented the key elements of interest ad valuation that include a clear and transparent regulatory model enabling the getting the fruits of the work, a clear and transparent contract, dynamics and attractiveness, rule of law and the ability to optimise costs.

John Higgins, President and COO, Avolon, said that in 2020 over the 50% of the aircraft will be leased

Session 2: Challenges and solutions: How can we make existing solutions work better?

Jos Nijhuis, President and CEO, Royal Schiphol Group emphasised the importance of connectivity.

Jost Lammers, CEO, Budapest Airport said that there are no more business as usual times. He concluded by saying: “As airports being independent businesses on their own right, the regulatory stability desired one size fits all doesn't work; and as the airline industry consolidation accelerates with market and negotiation power getting concentrated to a few major airlines/groups, airport infrastructure investment becomes more challenging as aviation is a market driven industry”.

Pekka Vauramo, President and CEO, Finnair added that airlines are investing on renewal of fleets and stressed that in order to build a competitive  European aviation airlines and airports need to work together.

Michael O'Leary, Chief Executive, Ryanair in his summary focused on lower fares and AGB delivers growth, on the  Brexit that is still uncertain, on the  lower costs needed to create jobs with a Single European Sky, on the improved regulations and the promotion of labour mobility.

Session 3: Game changers - what are they?

Olivier Jankovec, Director General, ACI EUROPE. in his remarks said that there is more unpredictability than before. Airports have the licence to growth and operate. LCC are those that will give growth and further cooperation and this is the very key.

Sylviane Lust, Director General, Airlines International Representation in Europe (AIRE), said that regulators make political choices.

Simon McNamara, Director General, ERA, said that for his airlines access to finance is a problem as margins are thin. The market has to see aviation as enabler rather than a cash cow.

Thomas Reynaert, Airlines for Europe,  focused  on the need for no airport charges and taxes. Airlines continue to control costs and to best serve the passengers.

Rafael Schvartzman, Regional Vice President Europe, IATA, added all stakeholders  need  to see the importance of  sustainability  in order to make this industry profitable.

Jeff Poole, Director General, CANSO, from the air traffic management said that a holistic approach on regulation that looksoutside national borders is needed.  

Filip Cornelis, Acting Aviation Director, DG MOVE, European Commission said that the regulators need to regulate only where is needed.

Gerold Reichle, Director General for Civil Aviation, Germany said there is a lack of consistence and coherence of the legal framework and stressed the need for global thinking.

Halla Sigurdardottir, Deputy Director General for Civil Aviation, Iceland, said that is important to have a strategy. In Iceland they don't see aviation as a cash cow and therefore it plays an important role to their GDP. And added that regulators have to stand back  and leave space for innovation.

Philippe Merlo, Director ATM, EUROCONTROL said that SESAR has already delivered but it has to develop further.

With the objective of sustaining and attracting further investment in European aviation, the conference concluded that:
- The need for private investment is strong in Europe in order to support efficiency and growth in  a context of capacity constraints on the ground and in the air;
- In all investment decisions, all the members of the aviation value chain should focus on the customer as ultimately they must bring value in terms of service provided to passengers at the adequate price;
- Innovation plays a critical role in the evolution of aviation and calls for an intensified coordinated approach between stakeholders, in particular airlines, airports, ANSPs and regulators;
- Legal certainty and stability are fundamental for investors. Regulators have the responsabilty  to provide an adequate framework for further and sustainable financing of aviation development.

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