3 OCTOBER 2011

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Article from BTNews 3 OCTOBER 2011

ON TOUR: The European regionalís gather in Rome

Alison Chambers reports

“You are in Bern, you don’t need to hurry,” says Tomislav Lang, CEO of SkyWork Airlines, inviting us to test the airline’s 20-minute check in claim.  We are en route to the ERA General Assembly in Rome and Bern, in stark contrast to the chaotic Rome Fiumicino Airport on our return, is an oasis of calm. 

SkyWork, a relatively new regional airline, is one of the 65 intra-European airlines which makes up the Association.  ERA members collectively carry 70.6m passengers on 1.6m flights, flying 867 aircraft and serving 426 destinations in 61 European countries.  Together, they recorded a 7.1% passenger growth in the first half of the year, although the real value was only 4% taking into account the impact of last year's volcanic ash cloud.  Average sector distance was 390 miles and seat load factor was up .7% to 64%.  “Once again our airlines have demonstrated their resilience and shown themselves to be resourceful,” said Director General Mike Ambrose.   

However, as the industry, under the blue skies of Rome’s Marriott Park Hotel highlighted, the stability of the industry is still threatened – by bleak economic uncertainty, proposals to change the way in which airport slots are allocated, (to the detriment of regional airlines flying smaller aircraft), VAT on international air fares, preferential treatment by some airports to low cost airlines and even bankruptcy protection for consumers.

An animated industry panel session chaired by Malcolm Hart, MD of Aurigny, together with Krzysztof Kapis from the Polish Ministry, Abdul Wahab Teffaha, Secretary General of the Arab Air Carriers Organisation, Boet Kreiken from KLM Cityhopper, Vijay Poonoosamy of Etihad Airways and Matthew Baldwin, the European Commission’s Director of Air Transport prompted Jesper Rungholm, boss of Danish Air Transport, to plead to legislators “please leave aviation alone, we have enough problems coping with fluctuating oil prices,” (making aviation reduce its emissions).  Vijay Poonoosamy observed that the Middle East had seen a “paradigm shift.”  Countries in his region supported aviation, contrary to the often confrontational, punitive approach in Europe.  But Matthew Baldwin said that a major challenge in Europe was its “27 separate airspaces,” referring to the continuing air traffic control problem.

Hart, always an entertaining speaker and a newly elected addition to the ERA Board, quizzed Baldwin on how regional carriers can escape blanket legislation. “We are not in the business of making regulation for the sake of it,” he replied and called for more interaction, especially from airline CEOs.  Observer Kam Jandu, Aviation Director from Budapest Airport, opined that maybe the industry needs a completely independent ambassador – not an association or airline – to lobby hard for the air transport industry.   

High points noted Ambrose were EC commissioner Kallas's Bruges Declaration, recognising the critical importance of air transport – that such further burdens should not be placed on the industry; the need for tougher performance targets for Air Navigation Service Providers and the need of the new White Paper to lead to a better balance between transport modes.

ERA released a new independently commissioned study Air and Rail: Setting the Record Straight, which shows an imbalance in the way the two transport modes are treated by the EU and the Commission.  The study identified massive rail subsidies, 125 times higher than State funding for air transport needs.  It clearly confirms that the political bias towards rail – and high speed rail (HSR) has not resulted in successful modal substitution, despite the subsidies poured in.  We are not seeking to become the ‘preferred’ transport mode, but we just want a level playing field based on fair competition and equal treatment between competing modes.”  

The aircraft manufacturers were in bullish mood in Rome.  ATR, now in its 30th year, especially having notched up 145 orders since January.  “There has been no holiday for ATR,” quipped CEO Filippo Bagnato, noting the company will up production from 54 aircraft this year to 72 aircraft in 2012, 80 in 2013 and 85 the following year.  At ERA it signed a contract with leading regional aircraft leasing company Nordic Aviation Capital for one ATR72-500 and another -600, adding to the 10 -600s the Danish based company signed at the Paris Show. 

Sukhoi Civil Aircraft Company/SuperJet International (SJI) said launch customers Armavia and Aeroflot have collectively logged over 850 flight hours to date on the SJ100 twin-engined jet.  EASA certification is slated for December, paving the way for deliveries to European customers. It is also set to make an impact in the executive VIP market and will announce a partner, potentially a cabin design partner, at NBAA in Las Vegas this month. 

Bombardier Commercial SVP sales marketing and asset management, Chet Fuller, gave an update on the C Series and also defended the CRJ 1000, when one well known journalist suggested had that model been a mistake?  To the contrary, the aircraft is delivering a performance better than specifications – just ask Brit Air and Air Nostrum, he said, pointing out the aircraft’s service entry came at a very tough time.  Colleague Steve Aliment voiced operators’ concerns that they are very worried about the Euro and the global downturn when selecting new aircraft.  “One doesn’t even know what currency they’ll be using next year.”  He acknowledged interest in the C Series from CEE countries, Romania in particular, primed by a Romanian journalist.  Carpatair Nicolae Petrov confirmed the interest.  “This is a good aircraft – an aircraft with a mission.  All the lessons with CRJ series have been ironed out with this model,” he said, hinting it could indeed be the aircraft for Carpatair to further its London ambitions.  “C Series to London City Airport even,” he told AERBT.

Mary Kirby, Flight International Senior Editor, delivered an informative presentation about IFE and cabin connectivity, advising regional carriers that they may not need to rush to equip but they should seriously think about adding connectivity if they are feeding traffic to the big alliance carriers.  What won’t appeal to carriers with a firm eye on the bottom line is that airlines who have adopted the systems (in the USA) with GoGo aren’t making money yet.  European carriers can take advantage of Inmarsat’s SwiftBroadband (which has global coverage apart from the poles).  Its newly revised lower pricing makes it even more attractive, she noted.  On the horizon from Inmarsat is the “blazing speeds” of Ka-band, which could arrive in 2014.  Kirby said that when this comes along, “it may well be of interest to regional airlines with antennae the size of an iPad.

Air Nostrum of Spain collected this year’s ERA Airline of the Year Gold Award.  Wideroe of Norway picked up Silver and SATA Air Açores, Bronze.  The Airport Achievement Award went to Nantes Atlantique Airport.  Nicola Clark from the International Herald Tribune was the recipient of the Hank McGonagle Journalism Award, while the Director General’s Commendation for Services to the Industry was awarded to Brit Air’s Nicole Huguenot. www.eraa.org

Alison Chambers - Emerald Media
www.emeraldmedia.co.uk

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