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Ash Attack: European Commission outlines relief measures

28-Apr-2010 8:03 AM

European Commission Vice-President, Siim Kallas (transport), presented (27-Apr-2010) a preliminary assessment of the economic consequences for the air transport industry of the volcanic ash crisis. The Commission's focus is on a package of short-term and structural measures for the air transport industry, which are proposed in association with Vice-President Almunia (competition and state aid) and Commissioner Rehn (economic and monetary affairs). European Commission estimates the closure of airspace due to the volcanic eruption lead to more than 100,000 cancelled flights and more than 10 million passengers unable to travel. The Commission intends to prepare a proposal to be submitted by the EU to the ICAO General Assembly in Sep-2010. [more]

  • Coordinated application of rules on state aid: The Commission considers that Member States can rapidly implement measures in favour of the air industry which do not constitute state aid - notably loans and guarantees granted at market conditions. Certain support measures could also be envisaged as state aid from Member States to make good damage caused by natural disasters or exceptional occurrences.
  • Coordinated enforcement of air passenger rights. Air passenger rights provided by EU law remain fully applicable.
  • Short-term and temporary relief measures:
    • The Commission will recommend that slot coordinators take into account the effects of the crisis, so that airlines can retain slots which were not used during the crisis and the period immediately afterwards;
    • The Commission will not object to Member State measures to waive operational restrictions for short periods - until the return to normality of the overall network and the repatriation of all stranded passengers;
    • The Commission will recommend to Member States and to Eurocontrol to assess immediately the possibility to defer the actual payments for en-route charges for a defined period of time. This is an important measure to provide some relief to immediate cash flow problems. Member States should take all appropriate steps in relation to their air navigation service providers.
  • Medium-term structural measures:
    • Accelerating the implementation of the Single European Sky: Highest priority to accelerated implementation of the Single European Sky II package (SES II), due to come into force in 2012. Proposing to fast track many elements of the Single European Sky package already by the end of 2010. In particular, the appointment of a European network manager;
    • Pan-European crisis planning for transport - a European mobility action plan put in place for future major disruptions;
    • Establishing an aviation platform: The Commission will establish an aviation platform with all stakeholders at European level, to facilitate long-term co-ordination with the air transport sector, as well as to allow for effective short-term follow up to these crisis measures.
    • European Commission: "This crisis has put in stark relief the critical role that the air transport sector plays in the functioning of the European economy. Sometimes we do not always appreciate something until it is not there. Millions of businesses and citizens across Europe are highly dependent on a functional and competitive airline industry. It is in our interest to get the air transport sector over this crisis and back to normal operating conditions. At European level, the Commission will do everything possible to make that happen," Siim Kallas, Vice President for Transport. Source: European Commission, 27-Apr-2010.[ more - full text]

European Commission: "This crisis has put in stark relief the critical role that the air transport sector plays in the functioning of the European economy. Sometimes we do not always appreciate something until it is not there. Millions of businesses and citizens across Europe are highly dependent on a functional and competitive airline industry. It is in our interest to get the air transport sector over this crisis and back to normal operating conditions. At European level, the Commission will do everything possible to make that happen," Siim Kallas, Vice President for Transport. Source: European Commission, 27-Apr-2010. [more - full text]

European Commission estimated the loss to different stakeholders from the volcanic ash crisis is between EUR1.5 billion and EUR2.5 billion (AP, 27-Apr-2010).

IATA applauded (27-Apr-2010) the announcement by the European Commission of a comprehensive programme to provide relief to the air transport sector in the aftermath of the airspace closures resulting from the Icelandic volcano ash plume. IATA also welcomed the announcement of flexibility on slot rules, flight restrictions, and air navigation payments that will provide some short-term operational and financial relief. IATA highlighted its particular support for three longer-term elements of today’s announcement:

  • Single European Sky
  • Improved aviation risk management for volcanic activity
  • Establishing an aviation policy platform [more]

IATA: "Airlines lost revenues of USD1.7 billion in just six days, with the greatest impact on European carriers. These urgent measures will provide much needed assistance to airlines at a time when their financial resources are stretched,” Giovanni Bisignani, Director General and CEO.

ACI EUROPE called (27-Apr-2010) on European Member States to "take stock" of the European Commission’s assessment and proposed emergency measures in reaction to the ash crisis. ACI EUROPE has estimated that European airports lost over EUR250 million during the air space shutdown from 15-21-Apr-2010. [more]

ACI EUROPE: “The European Commission has come forward with proposals that could constitute a feasible European Aviation Relief Plan. We are pleased to see that their assessment takes into account the impact on the entire air transport industry, including airports and their commercial partners...The past 18 months have seen governments bailing out banks and financial institutions from a situation that is increasingly being revealed to be of their own making. Last week’s shutdown of European air space was entirely outside of our control ,” Olivier Jankovec, Director General. Source: ACI EUROPE, 27-Apr-2010.

Association of European Airlines applauded (27-Apr-2010) the decision of the European Commission to respond "decisively" to the grounding of the European air transport sector in the aftermath of the Icelandic volcanic eruption. [more]

AEA: “The Commission recognised the importance of aviation for Europe and its citizens. The Commission identified, as a consequence of the lessons learned during the past week, short term measures that are required to re-establish a functional aviation sector. But Commissioner Kallas also pointed to the structural reforms which must now be accelerated...Safety is the prerogative of national administrations, the EU institutions and certainly the airline industry. But it has become clear that the basis for taking the decisions to close airspace, as well as the process itself, is in dire need of improvement...The AEA airlines will not seek state aids as a result of this crisis. But in this case, the entire European airline sector was effectively forced to close down as a result of an airspace closure,” Ulrich Schulte-Strathaus, Secretary General. Source: AEA, 27-Apr-2010.

European Travel Retail Council (ETRC) President, Frank O’Connell, requested the European Commission include the travel-retail segment in any compensation for the aviation industry in Europe (DFNIonline, 27-Apr-2010). ETRC estimated the cost to duty-free and travel-retail is at least EUR25 million per day.

European Travel Retail Council: “While the airlines and airports are shouting very loudly about the impact this has had on them and how they need compensating by government in some way, what I am saying is the effect on retailers is proportionately just as bad. In total size it may not be anything like that suffered by the airlines, but relatively speaking it is just as bad,” Frank O’Connell, President. Source: DFNIonline, 27-Apr-2010.

Irish Minister for Transport stated the Irish Government will not provide direct compensation to the aviation industry following the closure of its airspace in reaction to the volcanic ash plumes (Irish Times, 27-Apr-2010).

Russian Deputy Prime Minister, Sergei Ivanov, stated the Russian Government is considering compensation for Russian airlines for losses suffered from terminated flights due to the Icelandic volcanic ash (Xinhua, 27-Apr-2010).