Jetrader - November/December 2011 - 11

identify common denominator areas where AEA can take action. So the ﬁrst thing we try to do is to understand the commonalities of our members. The second thing we do is to help the members, should they so wish, to explain to their national governments and to the media what it is should be done by national governments. Thirdly, we promote this common position by talking to the press

and senior-level ﬁgures in the various European institutions. We explain to them what European airlines actually require in order to be able to compete effectively internationally. In a way, we work like the EU—but better. We not only address the issues at the national level but also at European level and in so doing, create synergies between the two.

2011: A Year of Many Crossroads
Excerpts from ISTAT Europe 2011 keynote address
By Ul rich Schulte-Strathaus What are the changes we can expect, the challenges we face, the effects of adverse circumstances on the industry and trade we all work for? A dynamic, a momentum, has been created in the market that calls for new solutions, a new dimension. I suggest that 2011 continues to be the ﬁrst of several years of crossroads. If we make the right decisions now, aviation will play its role for the citizens, the industry and global trade. Let me turn your attention to three issues in particular. I believe that if we do not tackle them, 2011 will have been a year lost. The widely held perception is that man-made CO2 emissions must be contained to regain control of greenhouse gas emissions, and thus begin to slow the speed of climate change. To this end, the EU argues that aviation should be included in so-called market-based measures because aviation is a growth industry and perceived to be incapable technologically of reducing its increasing contributions to the problem in the near term. As you know, all EU institutions have agreed that aircraft emissions should be included in the EU ETS as of 1 Jan. 2012. Applying Emissions Trading to airlines has, however, the uncanny speciﬁcity that aircraft are factories with wings, and the question has therefore become: which governments can tax emissions in which airspace? The EU believes that it can impose its scheme for all ﬂights to and from the European Union. Major non-EU countries strongly disagree, have sought to address the issue legally, and have even indicated their intention to politically oppose the measure. Indeed, if the EU persists in its approach, which some observers have called “imperialist,” the question arises if and how the EU would impose compliance on non-EU airlines. We have to get the EU ETS right; it is an EU law which cannot just be ignored, but if the regulators get it wrong, it will have consequences on image, on ﬁnances, on growth perspectives, and, in some cases on survival of airlines, the clients, the lessees or purchasers of aircraft and engines. A second factor which will impact the way this industry ticks is infrastructure, or better: the absence of sufﬁcient investments into infrastructure. Countries that invest into infrastructure on the ground invest into the future. Dubai will be able to handle 170 million passengers by 2017 annually. The single most important international airport in Europe, London Heathrow, is capped for the foreseeable decades at 70 million. And the third runway has not materialized. Dubai has eight. In Europe, in the absence not of a vision for Europe but of the tools to make it work, industries are adapting. In the airline sector we are now in a learning process. Costs are the intra-European problem, size is the international challenge. And competition from international gateways, ﬁercer than ever, will drive cost even further down, given that long haul pointto-point services—in combination with self-connecting, short-haul trafﬁc—could become a further competitive option to the integrated network operations we know today. Then there is a third factor which will pose enormous challenges. As a consequence of globalization, we are beginning to, and will increasingly continue to, witness gravitational shifts of growth to Asia. This is not just about Europe having to get its act together quickly as a region; or about European airlines losing connecting trafﬁc to non-EU hubs. These gravitational growth shifts will affect business in Europe, trafﬁc patterns, airline survival, ﬂeet requirements, ﬁnancial independence of European airlines, European airports’ future role, and far more. I am ﬁrmly convinced that the airline landscape will change fundamentally in the coming decade to meet the changing market expectations, and with it the product and services will change, and with that a new string of projects for aircraft and engine manufacturers. Large international airline groups, as well as large point-to-point carriers and niche players—all with highly differentiated expectations for ﬂexible reactions to the rapidly changing market dynamics—will determine the name of the game in the future. In their combination therefore, environmental, infrastructural and structural changes to the airline landscape will drive, in my humble opinion, a paradigm shift in aviation.

Jetrader 11

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Jetrader - November/December 2011

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