That Was The Week That Was 02-06 November
A week where State Aid took a turn for the literary and then literally tried to turn the conversation
According to Aristotle, tragedy comes not from our weaknesses, but from our strengths. Or as Eliot would have it, ‘unnatural vices are fathered by our heroism. Virtues are forced upon us by our impudent crimes.’ Somewhere in a discussion of tragedy, strengths, unnatural vices, heroism and impudent crimes we must surely get to the word ‘irony’ as well. So this week, your starter for 10 is to properly file – or merely pigeon-hole – State Aid. Is it our heroism at work, as some would have us believe – as almost all of the airline and airport industry would have us believe – or is it a virtue, forced upon us by impudent crimes? Or, if you prefer your logic Aristotelian, is it a strength or a weakness? It is market distorting; it saves jobs. It preserves the status quo ante (often more of the ante than the status quo); it stops innovation.
A companion to any discussion of heroism, impudent crimes and irony must always be timing. Timing, the essence of good comedy, can also be our undoing, or at least add bathos (and sometimes pathos) to our otherwise heroic positions. And timing is just one of those things that is very hard to control. The wheels of administration, like the will of God, grinds slow, but grinds exceedingly small. So was there anything more ironic than Monday’s announcement by the European Commission of the publication of its fitness check on the suitability of the State Aid rules? Now! State Aid is being splashed around as if by a drunken sailor. But the wheels of administration grind on, looking at State Aid against five very sober criteria: effectiveness; efficiency; relevance; coherence; and EU added value. Where to start? The report resolutely does its assessment, but notes that when it comes to effectiveness, the pandemic might mean that certain uncertainties, particularly in the area of aviation, ‘are likely to be more pronounced’. Subject to that little point, generally, the State Aid rules are fit for purpose. What State Aid rules? And what certain uncertainty? There is a real question in the study whether State Aid in aviation (which at the time the study was done, was largely to airports – but that was then and this is now) is the most efficient use of public money to promote regional development.
Not exactly the news the airports wanted as they geared up for a campaign for more public funding. Tuesday was the day of annual ECAC-EU Dialogue Meeting. These are usually networking-heavy meetings of Directors General of Civil Aviation of Europe, airline and airport lobbyists and industry associations; this year forced virtual. The DG of the ACI, Olivier Jankovec, noted the dire situation the airports find themselves in and threw himself on the mercy of the regulators. After all, he noted, the airlines had received $160 billion and the airports only $800 million. Fair’s fair… IATA, on the other hand, took a different path. Its new SVP Member and External Relations, Sebastian Mikosz, did not want to be arrogant. But no airlines, he noted, and this meeting would not be happening, not even virtually, goodbye. That is why airlines need as much money as the airlines alone think appropriate. That last bit might be a paraphrase, but you get the gist. It is not fair to say that there was no talk of structural reform or change. Mikosz least did note that IATA was not opposed to consolidation. However, the IATA approach is to channel its inner US National Rifle Association. Now is not the time to talk about changing the rules; thoughts and prayers with the victims etc. Maybe we need to add hubris to our discussion of impudent crimes and unnatural vices.
At the same time as the regulators were discussing the improvements and developments made possible by the Commission’s new Single European Sky SES2++ proposal, our old friends, the ‘fire with both barrels’ comms department at FABEC – silent for years, stung into action now it is obvious they can only resist change by accepting that in the undefined future they will have to deliver something, took us to another literary quote – this time The Leopard by Lampedusa – for everything to stay the same, everything must change. Over at ECAC, the DGCAs were not amused.
Wednesday saw the hubris move into overdrive. FABEC was at it again, this time with a fact sheet on its achievements. You be the judge. The paper was apparently from the desks of the owners of FABEC, the states, none of whom felt the need to defend the FABs at the ECAC meeting, despite the topic being very specifically mentioned. A risky strategy, highlighting as it does the question whether ANSPs are actually commercial entities at all. Instead, the paper decides that the best way to address the inescapable truths regarding achievements is to channel its inner NRA too – the middle of a pandemic is not the time to consider reform; thoughts and prayers…
If not now, when, Eurocontrol then asked, by releasing its new five year forecast. Trigger warning, it is not all that optimistic. So not optimistic that 2024 is the good number. 2029 is the pessimistic take. IATA did one of its regular updates too. Now is a good time to be in cargo, it concludes.
So yes, now is the time. Now is the time. Now is when we have to make bold changes.
IATA may be surrounding itself with NRA rhetoric but on Thursday, the airports were less subtle. ACI Europe is calling for the changing of the current non-rules about State Aid to be recast; to be reframed, not as a Temporary Framework, but a Recovery Framework. See what they did there? It tries to move the time line for continuing support to the right. It calls for what it calls connectivity restart schemes – that means State Aid – to continue to at least 2023. Suddenly, the report on the fitness for purpose of the State Aid rules and the questions around whether state aid helps regional development felt sooo Monday: is it strength to do this, despite the concerns on effectiveness; or weakness, born from hubris that everything must stay the same?
The week was rounded off on Friday with a master class from CANSO Europe’s official response to the SES 2++ package. Yet another inner-NRA channelling, sadly; yet another entry in the hubris-driven everything must stay the same stakes. Obviously, given CANSO Europe’s members’ state ownership, they support the proposals (!) but note that everything must stay the same. The response has four parts: there has to be enough flexibility to meet local needs – every ANSP is sacred; the European network must be maintained – we will only cooperate to the extent necessary; which must be based on competent decision making from all stakeholders – a lovely backhander to all the other stakeholders, but by making the tent as big as possible it becomes as unwieldy as possible; and must adequately address the financial implications of the crisis – did anyone mention State Aid? A master class, and it all turns on State Aid to make everything go back to normal. Weakness or strength? Unnatural vices, virtues or impudent crimes? Thoughts and prayers welcome.