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European and US regulations need fine tuning
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European and US regulations need fine tuning

Presenting at IATA’s Global Media Day, Conrad Clifford, IATA’s Senior Vice President and Deputy Director General, gave an overview of European and US regulatory issues, noting that these two regions are influential globally.

He stressed that IATA seeks to be a trusted partner of governments, and that the industry supports smart regulation that enables connectivity.

In Europe, an IATA/Motif survey of European businesses showed that they were overwhelmingly positive about Europe’s air transport network. They did, however, have some priorities for improvements, including

reducing costs
improving/upgrading airport infrastructure
improving links between public transport and air networks
reducing delays
decarbonization.
Clifford noted that many European politicians are doing the opposite, for example introducing airport capacity caps, adding costs through taxation, and failing to tackle delays by refusing to reform air traffic management.

The European Union (EU) Fit for 55 initiative that aims to reduce carbon emissions 55% by 2030 deserves credit, but there is devil in the detail. There are mandates for the use of sustainable aviation fuel (SAF) when there is no SAF to buy. “It is all stick and no carrot,” said Clifford. He urged the EU to adopt a book and claim system that separates SAF supply from the EU target. In other words, airlines can buy SAF in another region and have it contribute to the target.

Moreover, a proposal for a jet fuel tax would have no environmental benefit whatsoever. The link between flights taxes and flying is complicated. People will often compromise on other travel aspects before they cancel their flight. So, the tax directive has the unintended consequence of damaging the European tourism and hospitality industries while doing little for sustainability.

A Single European Sky, however, would have environmental benefits. Some 6%–10% carbon emission savings are available, but SES plans are forever thwarted by politicians and strong unions. “We need to see a proper independent referee to regulate air navigation service providers and significant targets, including for fuel savings,” Clifford noted.

IATA’s Deputy DG also highlighted the poor performance of certain airports, including Amsterdam’s Schiphol Airport, and the knock-on effects this is having. Schiphol’s quick-fire capacity cuts in summer 2022 caused numerous network issues, and airlines are being expected to pay for delays caused by the airport.

In addition, Schiphol has been told to reduce flights by 60,000 per year to cut noise and NOx emissions, and, at the same time, the Dutch aviation tax will triple in 2023. This will affect €4.8 billion in GDP and affect 62,000 jobs. Already, one airline has chosen to expand in Brussels rather than the Netherlands.

Clifford also called for Heathrow charges and the UK’s Air Passenger Duty to be cut to enhance connectivity.

Regarding SAF, the United States has a more progressive policy. It has incentivized rather than mandated use and, as a result, US SAF production leads the world.

There are still concerns with some proposed US rulemaking, however. In particular, potential changes surrounding refunds would effectively mean that passengers—even those holding non-refundable tickets—would get a non-expiring voucher if they call in sick. But an airline seat is a one-off perishable, like a ticket for an event. If airlines have to account for seats that could be redeemed at any time, the cost of flying will go up for everyone.

Another proposed rulemaking targets ancillaries, calling for fees to be displayed on first search page. This will clutter and confuse that initial search page and make the ticket purchase unreasonably difficult. Clifford likened it to trying to book a hotel and having the laundry, restaurant, and mini-bar prices displayed before there is an opportunity to book the room.

Clifford summed up by calling for regulations to be “proportional and focused on priorities to get people traveling efficiently.” Governments should consult broadly and understand the nature of the aviation value chain.

Credit | Lane-V.-Erickson / Shutterstock

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