TWTWTW July 20 to July 24
On Monday, the biennial Farnborough International Airshow should have opened its doors and some 80,000 aviation industry professionals from all corners of the world would have flocked to London to showcase or purchase the latest high-tech equipment. But Covid-19 claimed the aerospace industry’s biggest event and dashed all hope to surpass the 2018 Farnborough International Airshow record, which saw $192 billion in deals and orders for more than 1,400 commercial aircraft. For the team at Farnborough International however, a summer without an airshow was inconceivable. So it tailored its event to the new normal and launched a virtual FIA Connect, an airshow without aircraft on show.
With no flying display to look forward to at Farnborough, Eurocontrol director general Eamonn Brennan thought it was opportune to show that aircraft are flying in Europe’s skies. So, he turned to Twitter to announce that “last week the recovery continued, and we are now at about 40% of last year’s traffic levels.” In absolute figures, there were 14,833 flights in the European network of which intra?Europe flights accounted for 86% of the traffic flow. Ryanair was by far the airline having the highest number of flights, with 1,042 flights, followed by Turkish Airlines (590 flights), easyJet (582 flights), Wizz Air (539 flights) and Air France (475 flights). Paris CDG was the busiest airport with 676 flights (departures & arrivals), followed by Amsterdam and Frankfurt.
With most EU borders still shut for US travellers and the US barring entry of EU residents —and the lucrative transatlantic market still very much closed— the chief executives of Lufthansa Group, IAG, American Airlines and United Airlines put their heads together to sort it out. On Tuesday the foursome penned a joint letter to European commissioner for home affairs Ylva Johansson and US vice-president Mike Pence urging them to adopt a co-ordinated Covid-19 testing programme which “could be key to providing confidence to permit air services between the US and Europe to resume without quarantine requirements or other entry restrictions.” Their request, the CEOs argued, was warranted seen the “unquestioned importance of trans-Atlantic air travel to the global economy as well as to the economic recovery of our businesses.” They said they recognised that testing presents “a number of challenges, however we believe that a pilot testing programme for the transatlantic market could be an excellent opportunity for government and industry to work together.” Nobody wants to be a killjoy, but a letter to Johansson? If this pandemic has revealed one thing about the EU’s functioning, it is that the member states have largely ignored Brussels and imposed their own rules, timing and practices on border closures, travel restrictions and corridors, quarantines, and Covid-19 testing.
Who better than the head of one of Europe’s largest legacy carriers to defend the established slot rules. So, Wednesday saw A4E call on its chairman, Air France-KLM CEO Ben Smith, to reinvigorate the association’s earlier spelled out demand that airlines “urgently” need the suspension of the 80/20 use-it-or-lose-it slot rule for the entire winter season. He acknowledged airlines “have too many slots based on demand” but the reason airlines are not operating them is not of their own making. Either there is no access to markets owing to travel restrictions, or there is no demand. It would not be right if another airline would take advantage of that situation, he explained, leaving open the question of demand for that airline, but not his. Hence the request to freeze airlines’ slot holdings is “totally justifiable.” Is it? Yes, according to Smith. “99% of airlines represented by A4E and IATA in Europe are aligned on this position.” That is mob rule in respectable clothing. New entrants and airports might think differently, but this is an old discussion. Never ready to accept yes for an answer, A4E wants the winter slots waiver by the end of July and the best way to do this is by bypassing the European Parliament and the Council, and thus for the European Commission, and use a delegated act. In another sign that the much-touted cooperation between all stakeholders to survive the pandemic is fading and that the pre-Covid-19-era airline-centric ecosystem is back, A4E managing director Thomas Reynaert fired a warning shot at ANSPs and airports. The revision of the Airports Charges Directive must proceed as planned and airlines might not be able to pay the €1.1 billion deferred ATC charges, as foreseen under the deal brokered in April by Eurocontrol. The agreement requires airlines start to pay back the deferred charges between November and the end of the first quarter of 2021. “This is money the airlines don’t have unfortunately and won’t have for some time,” Reynaert asserted. Hm. Didn’t most airlines get billions of euros in government bailouts?
ICYMI: the German Presidency Aviation Summit took place on Thursday. We almost missed it because the organiser, Germany’s Federal Ministry of Transport and Digital Infrastructure, was particularly sparce with invites. But then, who wants Joe Public taking bandwidth away from a virtual debate between EU transport ministers and “leading” representatives from industry, airlines, airports and air navigation services providers on how to forge a “new” climate-friendly and crisis-proof aviation sector in Europe, how to regain passengers’ trust in aviation and how existing restrictions due to the pandemic can be efficiently integrated into logistics operations. In case you missed it, you did not miss a lot –and no worries, apparently there will be an Aviation Summit 2. However, what was missing on the European Commission’s press release with the text of the opening speech on creating a crisis-proof, innovation and climate-friendly aviation sector, was the name of the official who give the speech. We get it, it is the middle of the summer. It was the Transport Commissioner herself, by the way.
Boeing has had more bad days than good days lately, but Friday was a good day for the US aerospace company after Airbus said it had agreed with the governments of France and Spain to amend the so-called Repayable Launch Investment (RLI) contracts for its A350 in a bid to finally settle a 16-year dispute with Washington over government subsidies to its A380 and A350 widebody aircraft programs. “We have fully complied with all the WTO requirements. These additional amendments to the A350 RLIs demonstrate that Airbus has left no stone unturned to find a way towards a solution,” noted Airbus CEO Guillaume Faury. He described the company’s move as a “clear signal of support to those who are suffering from the severe impact of the tariffs imposed by the USTR [US Trade Representative], especially at a time when industries are hard hit by the consequences of the COVID-19 crisis.” The final WTO ruling of the subsidy case against Airbus gave Washington the right to impose tariffs of up to 100% on $7.5 billion of annual EU imports—including Airbus aircraft but mainly other products such as canned peaches, cheese, olive oil and clothing. Airbus’ latest commitment prompted European Commissioner for Trade Phil Hogan to urge the US to “lift these unjustified tariffs immediately.” The spat over illegal subsidies for aircraft program is not yet over though. Brussels has readied its own list of potential products to be targeted by tariffs on imports from the US in the Airbus vs Boeing case. To be continued.