TWTWTW 13 July to 17 July
On Monday, the European Commission rubber stamped the Dutch government’s €3.4 billion Covid-19 aid package to KLM, handing financial security to the airline despite its staff beseeching Brussels to thoroughly scrutinise the employment related requirements of the bailout. The government is dictating, amongst other things, that KLM employees reduce their working conditions by “at least” 20%. Six unions, representing all categories of staff, jointly lodged a complaint with Competition Commissioner Margrethe Vestager and Council Secretary-General Jeppe Tranholm-Mikkelsen arguing that the conditions imposed by the Dutch government —and agreed by KLM and its parent Air France-KLM— “are so specific and compelling that they infringe essential labor rights as defined in the International Labour Organization’s Fundamental Principles and Rights at Work” –which, BTW, have been recognized and ratified by all 27 member states of the EU— and the EU’s Charter of Fundamental Rights and the European Social Charter. These treaties and regulations, they noted, state that social partners should be able to negotiate collective bargaining agreements freely and that the government should not interfere in the terms of employment. Their call was nixed by the Commission. “The Netherlands imposed certain conditions on the aid measure with respect to profit allocation, working conditions, and sustainability. Very good. Member states are free to design measures in line with their policy objectives and EU rules,” concluded Vestager. And that was it. Chapter closed.
You could hear the deep sigh of relief fromQatar Airwayson Tuesday when the International Court of Justice ruled that ICAO does have the competence to adjudicate in the bitter airspace dispute with Saudi Arabia, the UAE, Bahrain and Egypt. The four had called into question ICAO’s right of jurisdiction, claiming that the issues go beyond civil aviation and that only the ICJ has the authority to decide on the dispute. ICYMI: Saudi Arabia, the UAE, Bahrain and Egypt in June 2017 banned Qatari aircraft from entering their airspace as part of a broader boycott on Qatar over its alleged links to terrorist groups, a move which Qatar said violated the Chicago Convention and the International Air Services Transit Agreement. It lodged a complaint with ICAO in 2018. Now that the dispute over who can rule in the dispute is settled, the actual dispute resolution procedures can resume in Montreal. Qatar Airways welcomed the ICJ ruling and vowed it “will pursue its case for appropriate compensation of the financial injuries inflicted on Qatar Airways as a result of the illegal airspace blockade.” Don’t expect those to be awarded soon. The geopolitical tension in the region is still very much alive and the “crisis will not be resolved in ACAO [ICAO] or in any other international organization,” the UAE’s embassy in The Hague pointed out via Twitter.
On Wednesday both Michael O’ Leary and Margrethe Vestager earned a drink, albeit for different reasons. The Irish boss of Ryanair deserved a Guinness or two because his assessment four years ago of the tax dispute between the European Commission and Apple proved to be right, the Danish Competition Commissioner conversely needed a really strong Akvavit to help her digest the verdict of the EU’s General Court in the high-profile, high-value legal battle between Brussels and the US high-tech firm’s Cork-based European subsidiaries. The EU’s second-highest court annulled Vestager’s 2016 decision ordering Ireland to recover a whopping €13 billion in unpaid taxes plus interest from Apple because, she claimed, the company’s low-tax arrangement with the Irish government represented illegal state aid. O’ Leary being Irish and being his typical self, promptly gave his opinion on the matter. “Frankly the Irish Government should turn around –they shouldn’t even appeal the decision– they should just write a letter to Europe and tell them politely to f**k off. The idea that you have the state aid mob –who’ve had more court verdicts overturned than any other department in Europe in the last 20 years– come along 10 years after the fact and say, ‘no we didn’t like that, we think you should have done something else’, is frankly bizarre.” Despite the defeat (and a couple of others on the same issue), Vestager put on a brave face and insisted the “Commission will continue to look at aggressive tax planning measures under EU state aid rules to assess whether they result in illegal state aid.”
If, by Thursday, you were confused about the complexities of EU jargon and failed to comprehend how the Connecting Europe Facility (CEF), the regular CEF Transport call, the CEF Transport Blending Facility call, the Trans-European Transport Network — better known as the TEN-T— projects and the Innovation and Networks Executive Agency are interconnected or even work, then do not worry. The TWTWTW team was lost too. Anyhow, we think the gist of the messaging is that the EU is investing €2.2 billion in 140 key transport projects to jump-start the economy and to boost the EU’s Green Recovery. “A very strong emphasis is on projects reinforcing railways, including cross-border links and connections to ports and airports,” the release read. We read the Excel sheet with the details of the 140 selected projects and found … one (1) relating to air transport. A SESAR Deployment project will get €20 million. The message was clear. Rail links to airports are not about aviation, they are about replacing short-haul flights with train travel as part of the Green Deal.
If drinks were called for earlier in the week, Friday saw another set of sobering data emerge. ACI Europe’s 500 airport members handled only 16.8 millionpassengers in June, compared to 240 million in the same month last year, and the recovery of passenger throughput is proceeding “at a slower pace than we had hoped for,” conceded director general, Olivier Jankovec. The number of passengers passing through Europe’s airports in June was down 93% on a year ago, marking only a slight improvement on the 93% the year-on-year decrease suffered in May. Initial data for July indicate airports are likely to recover only 19% of last year’s traffic rather than the 30% ACI Europe had forecast. But low passenger throughput is only one troubling fact, the airports trade body said. Passenger volumes are trailing behind flight numbers because reinstated flights generally achieve low load factors and this negatively impacting airports, as their operating costs are driven by aircraft movements while the bulk of their revenues comes from passengers. “The financial situation of airports is not significantly improving – with some even making more losses now compared to their situation prior to the restart,” according to Jankovec.