European Commission: Speech - The future of transatlantic aviation and the EU-US partnership: in dec

Siim Kallas - Vice-President and Commissioner for Transport

Ladies and gentlemen

It is a pleasure to be back in Washington and among such distinguished company at the International Aviation Club. Thank you for inviting me again.

It is hard to overstate the importance of aviation in today's globalised world. It lies at the very heart of transatlantic trade and travel.

And it is the transatlantic partnership between the European Union and the United States that still dominates global aviation.

This is why I have come to Washington, to discuss our aviation relations and also prepare - together - for the ICAO Assembly in September.

When I was last here two and a half years ago, I said that EU-US aviation in 2008 held a combined share of around 54% of the market for international air traffic. It is still the world's largest air transport market, for passengers and cargo. But figures from ICAO, Eurostat and the U.S. Department of Transportation show that share was down to 44% by 2011.

Of the world's top 10 airlines by reported revenue in 2011, nine are American or European. We have two leading aircraft manufacturers with combined annual revenues of around $100 billion for commercial aircraft.

It makes a lot of sense for us to work closely together because in aviation, as in other areas, we are ideologically close. Although our internal markets have some obvious differences, there is a strong and natural symbiosis in how policies have evolved on both sides of the Atlantic. We share the same principles - the rule of law, open and fair competition, passenger protection and safety, among others.

Our aviation agreements are clear evidence of our desire to forge stronger ties. The most recent of these, on air cargo security, was a huge step forward. In this most global of activities, our industries and societies are so similar and interlinked that it does not make sense to impose different sets of rules.

In geopolitical terms, the world is changing fast. And what of the EU-US relationship? It is turning a new page.

Who would have predicted, even five years ago, that we would start negotiations for a comprehensive bilateral trade and investment agreement?

This deal will be the world's largest and will also open a new window for aviation. Together, the EU and the US economies account for about half of global GDP and nearly a third of trade flows.

Global aviation is changing fast. There is a clear shift of growth towards Asia: half of the new air traffic added in the next 20 years is expected to be to, from, or within the Asia-Pacific.

This region's traffic will rise to one third of global passengers by 2016 from 29% in 2011, becoming the world's largest regional market for air transport.

With Asia and the Gulf as new centres of growth, major European and American airlines are under pressure, particularly the legacy carriers. The competition is nipping at our heels, challenging us commercially and technologically.

If we want to stay strong together, we should strive for even more regulatory convergence and better cooperation in international arenas such as ICAO.

There is already great progress: take the success of last month's Worldwide Air Transport Conference, which discussed important areas for international aviation - and important not only for Europe - such as market access, fair and open competition and consumer rights.

Ladies and gentlemen

The EU-US relationship remains a landmark in international aviation. We can, and still do, set much of the global agenda: by pursuing the values in which we believe and which have made global aviation safer and more liberal.

But neither Europe nor America can 'go it alone'. If we are to insure against uncertain times ahead, we need each other.

The same ambition that underpins the future EU-US free trade agreement should be carried through to our transport relations, especially to aviation. This is the chance to deepen our partnership and look beyond the short term. Our ambition must be nothing less than to create a genuine transatlantic open aviation area.

That means more regulatory convergence, free flows of investment, and no restrictions on air services - with access to the domestic markets of both sides.

We have already established a high degree of cooperation in regulating aviation. But there are still some barriers to be overcome, particularly those that limit airlines' access to global capital.

The main issue remains ownership and control. EU carriers are not subject to restrictions and can be owned by any EU interest. In the United States, on the other hand, foreign ownership of airlines is restricted to 25%.

These barriers slow down the development of a vital global industry and also deny our carriers important new sources of capital. This is unlike any other industry in the world, and makes very little sense.

If truly transatlantic airlines are to be created, which is in both our interests, US investment laws need to be reformed.

Ladies and gentlemen: we need to beat congestion in the sky and on the ground, while keeping our aircraft manufacturing industries competitive.

Capacity issues, leading to delays, are the major problem.

Air traffic growth is pushing the world's air transport systems to their limits - particularly in Europe.

This is why we embarked upon the Single European Sky project, recognising the need for future concepts and technology.

On the ground, just as an example, 70% of all delays to flights are caused by problems with aircraft turnaround at Europe's airports.

If nothing is done, by 2030 - when we expect a near doubling of air traffic - nineteen European airports will be unable to accommodate any more flights. The resulting congestion could mean delays for half of all passenger and cargo flights across the network.

This is why we plan to modernise the rules governing EU airports.

For the sky, my solution is to get rid of the lingering fragmentation of airspace. So we are accelerating our Single Sky project: we have deregulated airlines, but not yet the airspace through which they fly.

With our SESAR programme, the equivalent of the NextGen project, we are moving forward on three levels, while ensuring a constant high level of safety.

This will be a redesign of Europe's entire airspace architecture.

Since NextGen addresses many of the same areas, it makes sense for our two ATM systems to be as modern and compatible as possible.

For SESAR's next deployment phase, I would like to see some concrete projects that properly test the interoperability of both systems on the ground.

This could be the technical interface that eventually leads the world in ATM interoperability. We should continue to work together in ICAO to follow up on last autumn's conference to achieve global ATM standards.

Lastly, let me turn to a subject where the European Union and United States have not always seen eye to eye: aviation emissions.

I would like to thank the US authorities for taking such a strong and constructive approach in this issue. It is vital that we keep working together to find common ground at ICAO.

Climate change is not only happening in Europe. What we need is a global solution in ICAO to a challenge that is faced by the entire aviation community.

The next six months will be tough. We will all have to work hard to achieve a good and balanced outcome. In recognition of this, and also showing the flexibility of our ETS legislation, we proposed to "stop the ETS clock".

This is already giving the ICAO negotiations some space and time to move forward positively.

The United States and Europe now have to work closely together if the ICAO Assembly is to have any chance of reaching agreement on a common scheme for aviation emissions when it meets next September.

If there is no such agreement, the effects on civil aviation will be significant and global. Nobody wants that.

Ladies and gentlemen

Together, we have led the development of global aviation. That is not a small thing to say - and I believe that this transatlantic collaboration is the most fundamental of all.

We can still do more to make the most of this important partnership to our mutual benefit, and to the benefit of aviation worldwide.

Let us work together to make sure that happens.

Thank you for your attention.