URGENT MEASURES NEEDED IN EUROPEAN AVIATION OUTLINED IN OPEN LETTER TO EU TRANSPORT MINISTERS
National aids to struggling businesses are welcome in light of COVID-19 and ERA encourages the European Commission and member states to give special consideration to airlines given the critical need for cash due to the enormous cut in passenger revenues.
COVID-19 will have a severe impact on Europe’s economy this year while also negatively impacting the financial health of Europe’s airlines. Considering that, currently, cancellation numbers are higher than new bookings, and increasing travel bans have led to massive aircraft groundings, it is already clear that the impact will be substantial – with the likelihood of a large number of EU airlines experiencing a massive, short-term financial decline.
In order to ensure the survival of airlines in Europe and to help drive the economic recovery of the industry once restrictions related to the virus are lifted, a comprehensive package of measures is urgently required, whereby European airlines call on EU governments to co-ordinate their response, preserving the European aviation single market and its benefits in the long run.
The virus has spread to most EU member states and knows no borders. As noted by the WHO, a balance must be struck between effective measures to contain the virus and limits to economic and social disruption. Most European countries have imposed flight bans or other measures restricting air connectivity in Europe. Unilateral measures directly impact the functioning of the European Single Market, which is the cornerstone of Europe’s economic activity. Any restriction, in particular within the Schengen area, must therefore be based on a careful risk assessment and be proportionate to the public health risk. Additionally, it is vital that the economic supply chain continues throughout this crisis: therefore, cargo aircraft, ships and trucks must be able to operate, with special precautions to protect crews and the general public.
European airlines urgently require clarity on the possible application of Regulation EU261/2004 in the present situation. As highlighted in this letter to EU Transport Ministers, wide-ranging cancellations are unavoidable and manifestly caused by circumstances beyond airlines’ control. An official declaration from Transport Ministers and/or National Enforcement Bodies (NEBs) should immediately advise that COVID-19 constitutes ‘extraordinary circumstances’ and hence does not give rise to compensation payments. Similarly, in light of the numerous travel restrictions and grounding of fleets, the right to re-routing should be re-considered under the current circumstances.
Furthermore, European airlines urgently need – and will continue to require for a certain time – an EU-wide alleviation on crew training requirements. In this context, we call on a co-ordinated European exemption (from EASA) in order to extend expiring licenses because of restrictions in training and/or training facilities.
The European Commission recently agreed to grant airlines a temporary waiver on the airport slots 80/20 rule until 30 June 2020. European airlines consider that the Commission’s proposal is a good first step; however, the severe impact of the crisis, which has effectively led to a collapse in the demand for air travel and will see massive aircraft groundings, will be felt beyond June. In order to provide greater legal clarity and predictability, but also to avoid seeking extensions on a rolling basis, member states should consider extending the waiver to the full length of the summer season.
It is vital that member states and the EU ensure transport, in particular aviation, can resume its normal activities as soon as the health crisis is over. At this point, many of Europe’s airlines have made the difficult decision to ground all or a substantial part of their fleet (even up to 90 per cent) for the coming weeks. Many carriers have also been forced to proceed with (temporary) staff cuts. In Europe, airlines support 2.6 million direct jobs and 12.2 million indirect jobs. It will take time, financial sacrifice and hard work for our airlines to recover from the damage caused by the COVID-19 outbreak. Considering this, ERA and A4E have called for the deferment of ATC charges and aviation taxes at EU or national level to aid in the sector’s future recovery. Further to this, any fiscal burdens should be postponed or suspended until the industry is back on a sound operational and financial footing. EU and national measures should ensure liquidity for airlines, via guarantees or credit facilities for instance, as they will be instrumental in ensuring a swift recovery of the European economy at large.