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Annex 1: News AIR TRANSPORT: QUARTERLY REPORT NO.10 1ST QUARTER 2006 (January to March)

A EU/regulatory...... 2 Rescue aid for Airways 2 European sky protected against unsafe 2 Green light given to rescue of Italian Volare Airlines SpA 2 Community licence for air traffic controllers 2 European Court of Justice backs plans for air passenger compensation 2 Parliament gives support to EU external policy 3 GALILEO: EU and the Republic of Korea seal their agreement 3 Air passengers’ rights: ECJ confirms legality of EU rules 3 GALILEO on track: successful launch of the GIOVE-A satellite 3 B Airines ...... 3 B1 Scheduled network carriers 3 Revised forecast for airline financial performance 3 seeking to buy Volare 4 SN , Virgin Express take further strides in tie-up 4 Air transport in the EU25 : Air passenger transport up 8.8% in 2004 4 B2 Low-cost carriers 4 New low-cost routes, Q1 2006 to March 26 4 LCC routes announced for next quarter 5 Sterling performance above expectations: FL Group 5 EasyJet cries foul over -Ajaccio route rights 5 Flybe offers airline failure insurance 5 EasyJet sees deeper first-half loss but retains full-year outlook 5 ELFAA complains about new PSO routes in 6 B3 Charter carriers/leisure groups 6 First Choice cuts summer capacity 6 UK sparks TUI growth 6 Libra launching carrier Ajet to succeed troubled Helios 6 Atlas Blue adds two for summer expansion 6 Thomas Cook confirms return to profit 7 Air Atlanta parent Avion initiates $160m bond issue 7 Budget carrier to feed newly-acquired LTU 7 reveals destinations for new city-shuttle strategy 7 Bulgaria's Air Via to renew fleet with A320s 7 's Avion buys Aero to start German operation 8 B4 Regional airlines 8 Growth for ’s regional airlines 8 ERA asks European Commission to revise air transport policy 8 C ...... 8 Holiday company sells UK 8 Dedicated Air terminal at CDG 8 Stronger runways required at Orly 8 German airport operator sells Portuguese ground-handling interest 9 D Air Traffic Management ...... 9 identifies safety priorities for new action plan 9 Sweden and close to agreement 9 Knives out for CEATS programme 9 NATS and Aena formalise airspace system joint venture 10 Canso pans EC’s plans for Single Sky development 10 E Safety/security ...... 10 Evacuation trial clears A380 to seat up to 853 10 EC blacklist plan tests spirit of co-operation between states 10 Safety reporting still impeded in over half of Europe 11 Industry groups call for specialist security body to advise EU 11 F Environment...... 11 EC striving for year-end proposal on emissions trading 11 Oslo opens infra-red de-icing station 12 G Aircraft manufacturers ...... 12 Boeing see bright future as backlog, parts sales grow 12 Bombardier to cancel CSeries program 12 ATR rise eclipses rivals 12 outperforms Boeing with orders for 1,055 aircraft 12 H A final note...... 12 Sir dies 12

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 1 Appendices

A EU/regulatory

Rescue aid for 22Mar06 (IP/06/352) The Commission will authorise rescue aid for Cyprus Airways. The aid consists of a €51 million loan guarantee for the next six months to allow restructuring of the airline. The Commission has examined the rescue aid for Cyprus Airways and checked that it complies with Community rules, notably: • The aid is in the form of a loan guarantee granted at market rates. • The amount of aid is limited to what is needed to manage the short term cash flow deficit, and Cyprus authorities will furnish the Commission with a restructuring plan for Cyprus Airways within six months of authorisation of payment of the aid. • The aid is also warranted on the grounds of serious social difficulties. 2400 staff members work directly for companies within the Cyprus Airways group, which is not an inconsiderable number given the size of the total Cyprus workforce. • The possibility of the aid having any adverse s effects on other Member States is limited.

European sky protected against unsafe airlines 22Mar2006 (IP/06/359) The EC adopted on the 22nd of March the first EU list of airlines which are banned in the EU. This black list of unsafe airlines will now be published on the Commission’s website. The black list has been compiled on the basis of national contributions and after an in-depth analysis with Member State experts. The list consists of 92 companies which face a complete ban and 3 companies which face operational restrictions. From now on the principle will apply that companies banned in one Member State are banned in the whole EU.

Green light given to rescue of Italian airline Volare Airlines SpA 8Mar2006 (IP/06/280) The Commission authorised on 08 March rescue aid for the Italian airline Volare Airlines SpA. This short-term aid is intended to rescue the firm from bankruptcy and allow it to take steps to continue operating. The aid consists of a €25 million guarantee from the Italian Government which the airline will be able to use to obtain credit.

Community licence for air traffic controllers 15Feb2006 (20060210IPR05178) MEPs adopted a second reading report on establishing a Community Licence. Rules on training and licensing of air traffic controllers are to be harmonised. The aims of the proposed directive are to ensure high safety standards and make it easier for air traffic controllers to work outside their home country by simplifying the mutual recognition of national licences. Given around 1,800 more air traffic controllers are needed, mobility of controllers was one of the Parliament's main concerns. MEPs back moves to ease restrictions on the free movement of air traffic controllers: from now on, under the principle of "unconditional mutual recognition", all EU Member States must recognise each others' licences and qualifications, language certificates and medical certificates for air traffic controllers.

European Court of Justice backs plans for air passenger compensation 26Jan06 (20060126STO04746) The Chairman of the European Parliament's Transport Committee, Paolo Costa, has welcomed the recent ruling by the European Court of Justice concerning compensation for passengers bumped off or faced with long delays. The Court lined up behind rules agreed by the Parliament and ministers which aim to provide better protection to passengers.

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 2 Mr Costa stated that the legislation has introduced big improvements to air passenger rights in the EU in the event of flight cancellation, denied or long delays. The rules to provide compensation to passengers were introduced in February 2005, but were challenged in the British court by the European Low Fares Airline Association (ELFAA) and the International Air Transport Association (IATA), which claimed the legislation was discriminatory and limits consumer choice. The British High Court asked the EU court to rule on whether the legislation does infringe EU rules.

Parliament gives support to EU external aviation policy 17Jan06 (P6_TA-PROV(2006)0006) The European Parliament adopted a report on EU external aviation policy which stressed that future air agreements should be balanced in terms of market access, which relates to issues including State aid, cabotage, rights of establishment, property and controls, and competition rules, on a strictly reciprocal basis. Consideration in the selection of candidates must be given to countries of special importance for the European market, notably the United States, Russia and China, as well as countries located closer to Europe. Parliament has requested that the Commission present examples of "best practice" for the safety of third country aircraft by the end of this year, and supports the extension of responsibilities of the European Agency (EASA). An amendment proposed by the Greens/EFA calling for an energy tax on aviation was rejected. Parliament also demonstrated support for Transport Commissioner’s view that negotiations with Russia must result in the abolition of charges on European airlines for overflying Siberia, before an EU-Russia air agreement can be reached. Parliament adopted the report on the Commission's request for a mandate to negotiate overall air agreements with Russia and China. The Commissioner highlighted air agreements with Australia, Ukraine, China and India as among the EU's priorities for 2006.

GALILEO: EU and the Republic of Korea seal their agreement 12Jan06 (IP/06/23) After 6 months’ negotiation, the Republic of Korea’s participation in Europe’s satellite radionavigation programme reached approval on 12 January.

Air passengers’ rights: ECJ confirms legality of EU rules 10Jan06 (IP/06/12) On 10 January the European Court of Justice confirmed the validity of EU legislation on air passengers’ rights. This legislation, which came into force on 17 February 2005, has introduced very significant improvements to the protection of air passengers’ rights in the EU.

GALILEO on track: successful launch of the GIOVE-A satellite 28Dec05 (IP/05/1712) GALILEO, Europe’s global satellite navigation system is now a concrete reality. On 28 December 2005, the 600-Kilogram GIOVE-A satellite, manufactured by the British company Surrey Satellite Technology Limited, was placed in a 23,222 kilometres orbit by a Soyuz rocket from the Baikonur cosmodrome in Kazakhstan.

B Airlines

B1 Scheduled network carriers

Revised forecast for airline financial performance 23MarO6, Webmaster IATA announced that it expects airlines globally to lose $2.2bn in 2006 and to post profits of $7.2bn in 2007. The quarterly revision is a significant improvement on the previous forecast of a $4.3bn loss in 2006 and a profit of $6.2bn in 2007.

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 3 Alitalia seeking to buy Volare 20Mar06, Webmaster On Friday the Italian government approved Alitalia's $46.3m acquisition of smaller Volare Airlines, which has valuable slots at 's Linate Airport, the industry ministry said. The acquisition, which still needs approval from anti-trust authorities, is part of Alitalia's strategy to regain domestic market share.

SN Brussels, Virgin Express take further strides in tie-up 15Mar06, ATI SN Brussels Airlines and Virgin Express next month will integrate their communications departments as part of a series of steps the two carriers have been taking to streamline their operations. Both carriers are owned by SN Airholding, following the finalisation of their merger last April, but so far they have remained separate airlines.

Air transport in the EU25 : Air passenger transport up 8.8% in 2004 26Jan06 (STAT/06/10) A report published by Eurostat on air transport in the EU, Candidate countries and Iceland, Norway and , showed that the total number of passengers transported by air in the EU25 rose by 8.8%, to 650 million in 2004. Of these, 24% were carried on national flights, 42% on intra-EU flights and 34% on extra-EU flights. Heathrow remained EU’s busiest airport in terms of passengers, handling 67 million in 2004 - about 10% of all air passengers in the EU, and up 6.2% on 2003. With just under 51 million passengers each Paris CDG (up 6.1%) and (up 5.6%) were the second and third busiest airports in the EU, followed by (42 million passengers) and (38 million). , with 9.6 million passengers, remained the top airport of the new Member States.

B2 Low-cost carriers

New low-cost routes, Q1 2006 to March 26

flights / flights / Airline Route Start Airline Route Start week week Air Düsseldorf Helsinki 03-Feb 6 Düsseldorf Paris CDG 03-Feb 13 (contd.) Nottingham Wroclaw 08-Feb 4 Nottingham Lodz 09-Feb 3 dba Paris Orly 06-Mar 12 London STN Vitoria 17-Feb 7 London STN Balaton 18-Feb 3 easyJet London LTN Lisbon 01-Mar 7 London STN Lamezia Terme 18-Feb 4 Paris CDG Lisbon 01-Mar 7 London Luton Brest 21-Feb 3 Basel Amsterdam 10-Mar 7 Shannon 22-Feb 3 Paris CDG Milan MXP 10-Mar 7 Shannon 22-Feb 3 Basel Lisbon 10-Mar 7 Shannon Wroclaw 22-Feb 3 Basel Prague 10-Mar 5 Seville 22-Feb 4 Milan MXP 10-Mar 7 Paris Beauvais Oporto 22-Feb 7 Milan MXP Malaga 10-Mar 7 PIK Reus 23-Feb 3 Frankfurt Hahn Bari 23-Feb 3 Flybe Belfast City Manchester 09-Jan 25 Shannon Rome CIA 23-Feb 3 Exeter Manchester 16-Feb 12 Liverpool Oporto 23-Feb 3 Norwich 16-Mar 7 Glasgow PIK 24-Feb 3

Flyglobespan Glasgow Amsterdam 10-Feb 7 Smartwings Prague Las Palmas 14-Jan 1 hlx Milan MXP 09-Jan 5 Sterling 14-Jan 1 Stockholm Faro 17-Feb 1 Monarch Birmingham Murcia 10-Feb 2 Stockholm 03-Mar 2 Oslo Amsterdam 20-Mar 11 MyAir Milan Bergamo Reggio Calabria 23-Feb 3 Vueling Madrid Amsterdam 20-Feb 7 Norwegian Oslo 07-Jan 2 Madrid Lisbon 20-Feb 7 Bergen Salzburg 07-Jan 1 Madrid Milan MXP 20-Feb 7

Ryanair Dublin Riga 09-Jan 7 Windjet Venice Oslo 02-Mar 2 Stansted 11-Jan 7 Palermo 03-Mar 3 Liverpool Bergerac 01-Feb 3 Forli Moscow DME 08-Mar 2 Liverpool Carcassone 01-Feb 3 Liverpool Derry 01-Feb 7 Wizz Air Wroclaw Dortmund 01-Mar 5 Nottingham Limoges 07-Feb 4 Gdansk Liverpool 02-Mar 3 Nottingham Bergerac 08-Feb 3 Gdansk Hamburg Lubeck 03-Mar 4

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 4 LCC routes announced for next quarter Stansted to Belfast easyJet 21 new routes across mainly from Glasgow, Bristol, Liverpool, Milan, and Malaga. Flybe three routes, two from Norwich and one from Southampton. Flyglobespan two new Greek destinations from Glasgow. Long haul services to Orlando from Glasgow and from Manchester as it takes delivery of a . FlyMe Gothenburg – Barcelona. two new routes to Russia Hapag Lloyd Express Cologne to Birmingham. Zurich-based Helvetic two Italian destinations but leaving (competition from Swiss). Jet2 Newcastle to Bergen. Norwegian two new routes. Ryanair five new aircraft based at Dublin, adding 18 new routes from the Irish capital. Two new routes from Doncaster and one from Bournemouth. It has threatened to axe service to Vasteras airport (Stockholm) and halve its frequencies to Malmo if the Swedish government implements a proposed SEK94 (€10) environmental tax for departing passengers. SkyEurope seven new routes from Prague. Vueling four new routes, most from Madrid. Wizz ten new routes further opening up eastern European destinations.

Sterling performance above expectations: FL Group 13Mar06, ATI Danish budget carrier Sterling has turned in a strong start to the year, despite adverse market conditions, says new Icelandic owner FL Group. parent FL Group signed an agreement to acquire Sterling in 2005, completing the deal earlier this year. Sterling is undergoing a turnaround plan following its acquisition of Maersk Air.

EasyJet cries foul over Paris-Ajaccio route rights 6Mar06, Air Transport Intelligence news EasyJet has been forced to abandon plans to serve Ajaccio in Corsica from Paris Orly, after failing to secure route rights from French DGAC. The route is served by SkyTeam carrier and CCM. Easyjet accuses the French government of agreeing to a monopoly between Air France and CCM. EasyJet claims that the route is the 12th-strongest domestic connection in France, accounting for 450,000 passengers in 2003. The airline adds that it is astonished that such a popular route would qualify for public service obligation (PSO) status and claims that it would offer more competitive pricing, without PSO guarantees.

Flybe offers airline failure insurance 6Mar06, ABTN FLYBE is claiming to be the first low-cost airline to offer Scheduled Airline Failure Insurance, following a promise to the government to protect passengers. The airline is understood to have made the pledge when debate was being held over whether a £1 levy should be introduced to build up a pot to help stranded customers. The three-year deal with insurance firm AIG includes , sickness and cancellation, as well as failure.

EasyJet sees deeper first-half loss but retains full-year outlook 2Feb06, Air Transport Intelligence news EasyJet is predicting a deeper pre-tax loss of about £45 million for the first half of the financial year but its outlook for the full year remains unchanged. EasyJet, which reported a first-half seasonal pre-tax loss, before goodwill, of £22 million last year, attributes the forecast losses to a later Easter holiday period and an additional charge of £55 million from rising fuel costs.

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 5 The airline predicts a slight reduction in total revenue per seat. Capacity will increase by 15% and cost per seat, excluding fuel, will be cut by 3-5%. The reduction of other expenditure and increased ancillary revenues will help offset higher fuel bills and lower passenger revenues.

ELFAA complains about new PSO routes in Italy 6th Jan 2006, ABTN The European Low Fares Airline Association (ELFAA) is calling upon the EC to take a hard line against what it calls the latest abuse by Italian authorities of the Public Service Obligation (PSO) system, routes that are kept open for social reasons and are not usually viable. ELFAA says that the Italian government has imposed PSOs on several routes between Sardinia and mainland Italy which are considered to be commercially practical and given them to Alitalia. “It’s a backhanded way of subsidising the airline from more efficient competition and provides Alitalia with even more state aid,” says the organisation.

B3 Charter carriers/leisure groups

First Choice cuts summer capacity 23Mar06, TravelMole First Choice cut early summer capacity by 5%: mainstream package bookings are down by the same level. First Choice said negative external factors, including the outbreak of bird flu in Turkey hit demand during the January peak booking period. Revenues for summer 06 are 3% higher than last year, while margins are ahead of last year. First Choice disclosed that 68% of bookings are now coming via in-house channels, a rise of eight percentage points year-on-year. A breakdown of the figures for summer shows shorthaul holiday passengers down by 7%, medium haul down 11% but long haul up 23%. Capacity has been taken out of the specialist holidays sector, where summer bookings are down 14%. The activity holidays sector has seen revenues ahead by 8% for summer and 12% for winter 2005-06.

UK sparks TUI growth 22Mar06, Travelmole TUI chief executive said he was "basically satisfied" with the group's 2005 performance which saw turnover climb 5.8% to £9.7 billion. Earnings climbed 2% to £248 million, with Northern Europe, which includes the UK, Ireland and , contributing £109 million, up more than 40% from 2004. Turnover in the region increased 2.9% to £3.3 billion. In the UK, passenger numbers rose 9.5% to 5.38 million, which includes seat-only sales, with 73% of its tour operating product sold through Thomson's own distribution network. Western Europe suffered however, losing almost £7 million, largely in the French market.

Libra launching carrier Ajet to succeed troubled Helios 14Mar06, ATI Tour operator Libra Holidays Group has confirmed it is establishing a new charter carrier, Ajet Airways, to take over flight operations from its Cypriot carrier Helios Airways. Libra says the new carrier will use the aircraft and resources of Helios and will operate charter flights only – unlike Helios which also operates scheduled routes. The move follows the high-profile crash of a Helios -300 on 14 August last year, in which the aircraft ran out of fuel after suffering a pressurisation problem. All 121 passengers and crew were killed in the accident. Ajet was registered on 20 January and is wholly-owned by Libra Holidays.

Atlas Blue adds two aircraft for summer expansion 10Mar06, ATI Moroccan LCC Atlas Blue is to open three French routes this summer and a pair of winter destinations. Atlas Blue, a fully-owned subsidiary of , began operations in July 2004 and performs charter and scheduled services from its base at Marrakech and from . Currently operating six Boeing 737-400s, Atlas Blue is planning to add a former Royal Air Maroc Airbus A321 this month and a Boeing 737-800 in June. This is in line with its

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 6 plan to add two aircraft each year over its first six years of operations. This additional capacity will be used to boost frequencies and to open new daily scheduled services to Marseille, a thrice-weekly Nantes link and a twice-weekly service this summer. All of these are presently operated by Atlas Blue as charter routes.

Thomas Cook confirms return to profit 06Mar06, ATI German tour operator Thomas Cook continued its improved financial performance in 2004/05 after boosting operating profits to €193.2 million ($232.7 million) and returning to the black at both a pre-tax and net level. Thomas Cook increased sales to €7.66 billion for the 12 months ending 31 October 2005, from €7.48 billion in the previous year. This included a more than €100 million improvement in UK sales to €2.5 billion. At the same time, the company continued to reduce overheads, trimming personnel expenses 2% and cutting all other operating expenses 8.4%. The increased sales and reduced overhead costs helped the company’s operating profit jump to €193.2 million for 2004/05 compared to €22.1 million in the previous period. A pre-tax loss of nearly €150 million in 2003/04, was turned into a profit of €140 million. Thomas Cook posted a net profit of €105.4 million for the year, compared to a €176.4 million loss in the corresponding period.

Air Atlanta parent Avion initiates $160m bond issue 02Mar06, ATI Icelandic transport specialist Avion Group has issued $160 million in bonds, which it will use to fund its acquisition strategy. Avion Group has been pursuing a prolific acquisition strategy, with recent targets including France’s Star Airlines and the assets of collapsed German charter carrier Aero Flight. Recently floated on the Icelandic stock exchange, Avion’s portfolio includes UK charter carrier Excel Airways as well as wet-lease specialist , plus a number of other aviation-related subsidiaries.

Budget carrier dba to feed newly-acquired LTU 17Feb06 ATI German budget carrier dba will become a feeder operator for LTU, following investment group Intro’s acquisition of a 60% share in the charter airline. The two carriers could elect to use their fleets in order to extract maximum potential from particular routes within their networks. Intro, the investment firm which acquired dba three years ago, has agreed to take the dormant 49.9% stake in LTU formerly belonging to Group as well as a 10.1% share held by German company CKA. This will give Intro a controlling stake in the Dusseldorf- based charter airline. company Rewe, which has been seeking a strategic partner for LTU, will retain its 40% shareholding in the carrier.

Condor reveals destinations for new city-shuttle strategy 01Feb06 ATI German charter operator Condor is to launch its new strategy of serving the city-to-city market with ten routes from Munich, six of which will be to Italian destinations. The carrier will begin flights to the Italian cities of Venice, Turin, Rome, Naples, Pisa and as well as Brussels, Prague, and Marseille. Condor is seeking supplementary business to offset seasonal variations in the traditional holiday market, and indicated that it wanted to parallel the city-to-city approach adopted by German rival Air Berlin. Condor will use its Airbus A320 aircraft and plans to extend the present fleet by at least one aircraft.

Bulgaria's Air Via to renew fleet with A320s 01Feb06 ATI Bulgarian charter carrier Air Via (established in 1990) is acquiring three Airbus A320 aircraft, the first Western-built type to be used by the privately-owned -based airline. Air Via presently uses a fleet of five Tupolev Tu-154 aircraft and had been considering the Tupolev Tu-214 for a renewal programme. Air Via will use the aircraft for its holiday services between and the Bulgarian Black Sea resorts of Varna and Burgas. The Bulgarian carrier conducts charters for several tour operators including TUI and Thomas Cook.

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 7 Iceland's Avion buys Aero Flight to start German operation 24Jan06 ATI Iceland’s Avion Group has agreed to acquire the assets of collapsed German charter carrier Aero Flight and is in discussions to obtain an air operator’s certificate (AOC) from German regulators. Under the plan Avion will use a pair of Airbus A320 aircraft to begin services in summer this year to destinations in southern and eastern Europe, as well as the Middle East. Aero Flight filed for insolvency in November last year after the German authority refused to renew its AOC. The company had been the successor to charter carrier , which itself suspended operations in October 2003.

B4 Regional airlines

Growth for Europe’s regional airlines 22Mar06, ERAA Europe’s regional airlines are enjoying a period of long-term traffic growth, according to the latest statistics produced by the European Regions Airline Association (ERA). ERA carriers reported average growth of 6.3% for scheduled passenger traffic in 2005 compared to 2004. The average scheduled passenger load factor among ERA airlines for 2005 was 61.5%. This is the highest year-end scheduled passenger load factor figure since ERA began collecting data in 1987. The peak month figure of 67.3% scheduled passenger load factor was achieved in July. ERA believes that the rising load factors are probably caused by the continued prudence among operators in increasing capacity.

ERA asks European Commission to revise air transport policy 10Jan2006, ERAA ERA has asked the EC to undertake a major revision of the section on air transport in its White Paper on European transport policy. ERA believes the revision must include: • recognition of the economic and social benefits of air transport to the European Union’s citizens and businesses, • confirmation of air transport’s role in achieving the employment, productivity and competitiveness for all European citizens and businesses, • a clearly defined role for air transport within an integrated European transport policy, and • strategies to ensure global competitiveness of Europe’s air transport industry.

C Airports

Holiday company sells UK airport Mar06, ATI Holiday company TUI sold its interest in to a joint venture called CAFCO Coventry which includes Howard Holdings and Covergence AFCO. TUI owns the main airline customer at the airport, Thomsonfly. The airline intends to expand its operations at the airport despite the sale of its sister airport company.

Dedicated Air France terminal at CDG Mar06, ATI Air France is to have its own dedicated terminal at Paris CDG for regional services. The new facility will be financed by Air France but managed by Aéroports de Paris.

Stronger runways required at Orly Mar06, ATI Aéroports de Paris announced that is was investing €33 million to strengthen the at Paris Orly to prepare for the arrival of Air France’s Boeing 777-300.

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 8 German airport operator sells Portuguese ground-handling interest Mar06, ATI Fraport completed the sale of its 40% stake in the Portuguese Handling company Portway to the Portuguese airport company ANA.

D Air Traffic Management

Eurocontrol identifies safety priorities for new action plan 07Mar06, Flight International Eurocontrol has initiated an air traffic management safety programme that aims to focus on five high-priority areas and build on the organisation’s earlier strategic safety action plan. The programme will concentrate on enhancing safety in areas that will benefit most by the end of 2008. These areas include safety legislation, incident reporting, day-to-day operational risk mitigation, system safety defences, and overall safety management. The new initiative follows on from the Eurocontrol Strategic Safety Action Plan, unveiled two years ago, which aimed to instil a strong safety culture across the ECAC states. Eurocontrol says that this earlier plan has had a substantial and measurable impact on safety. Particular attention will be paid to incident reporting under the new programme. Eurocontrol’s Performance Review Commission said it remained concerned about the quality and consistency of safety incident reporting across Europe due to cultural impediments. It said that 15 states, representing 71% of traffic, can be considered as having mature reporting of airspace events such as infringements. Another six states report with low data quality. Nine report irregularly, while four others have not reported at all since 2001. The review commission described the situation as most unsatisfactory.

Sweden and Denmark close to airspace agreement 28Feb06, Flight International Scandinavian authorities are expecting to complete definition work on a revised plan to unify airspace across Denmark and Sweden by the middle of this year. Their efforts are aimed at defining an organisation that will provide air traffic management services across the whole of Danish and Swedish airspace, with the exception of control. Three possible scenarios for a joint enterprise between Danish air traffic control service Naviair and its Swedish counterpart have been put forward. One proposal is to merge the two organisations into a single company operating three control centres at Stockholm, Copenhagen and Malmo. Other options include retaining the original NUAC and Skaane concepts or creating a close co-operation venture with certain common interests.

Knives out for CEATS programme 21Feb06, Flight International Central European airspace authorities intend to completely overhaul the troubled programme to create a unified air traffic centre for the region. Three of the eight air navigation agencies involved in the Central European Air Traffic Services (CEATS) programme, , the Czech Republic and Slovenia, are effectively mounting an effort to scrap the project and win support for a different concept. CEATS would have unified the upper airspace of eight participating states under the control of a single centre located near Vienna. But the programme has struggled to overcome political barriers and airlines have become increasingly sceptical. By the time the 2006 Maastricht conference opened, €40 million had been spent on CEATS over the past seven years with no results. Both IATA and ERA have withdrawn all support for CEATS, heavily criticising the expenditure and insisting that the project be terminated. However, the Czech Republic believe that the principle of a functional airspace block within the Central European region made a lot of sense and, together with Austria and Slovenia, is planning to host a meeting between all eight air navigation providers from the CEATS states to discuss possible options for achieving this in a cost-effective manner.

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 9 Austria, Slovenia and the Czech Republic have already declared an intention to harmonise the replacement of their airspace management equipment between 2007-2012 through a joint initiative known as ‘One ATM System’.

NATS and Aena formalise airspace system joint venture 15Feb06, ATC Maastricht Conference UK and Spanish air navigation service providers have formalised their co-operation to develop a new airspace management system through the creation of a joint-venture company. National Air Traffic Services (NATS) of the UK and 's Aena will jointly own the new company, known as SACTA ATM after the Spanish air traffic control system. The two service providers have already co-operated closely over the past three years to explore the potential for using SACTA - Sistema Automatizado de Control Transito Aereo - as a platform for UK airspace control. The original SACTA system emerged in the early 1990s in Madrid and Palma before being extended to Seville, Barcelona and other Spanish locations. SACTA's latest iteration will be implemented initially in Gran Canaria next year and subsequently be adopted by NATS at its Scottish area centre in Prestwick. NATS will then also introduce SACTA to the southern UK's en-route centre at Swanwick.

Canso pans EC’s plans for Single Sky development 10Jan06, Flight International Doubts have surfaced over the EC’s approach to developing the technology for its much- vaunted (SES) programme following strong criticism from the Civil Air Navigation Services Organisation (Canso). Canso, representing air traffic management (ATM) service providers worldwide, has accused the Commission of following a “government- led” approach to developing the SES which would result in excessive costs and possible delays to the programme. Canso’s comments result from the Commission’s November communication on the SES industrial and technology programme, SESAR, which has replaced Eurocontrol’s SESAME, the original SES definition and implementation programme. The communication promises €2.1 billion of investment into SESAR over seven years, but Canso says it is disappointed to see that it fails to take into account the consultation with industry preceding publication. The Commission insists, however, that SESAR is very much an industry-led project. The foreseen governance structure meets the requirements that industry should play an important role in the SESAR management and decision making process.

E Safety/security

E1 Safety

Evacuation trial clears A380 to seat up to 853 29Mar06, ATI European and US regulators have formally approved a maximum seating capacity of 853 passengers for the Airbus A380-800, following the first full-scale evacuation trial performed for the type. During the trial in Hamburg on 26 March, 853 passengers, 18 cabin crew members and two pilots left the aircraft within 78 seconds. Clearance by the European Aviation Safety Agency and US FAA marks a major milestone on the path to type certification for the A380. Evacuation certification requirements state that all passengers must be able to leave an aircraft, through half the normally-available exits, within 90sec.

EC blacklist plan tests spirit of co-operation between states 22Mar06, Flight International The first EU-wide list of unsafe carriers has tested the co-operation between the aviation authorities of the 25 member states, some of which jealously guard their traditional autonomy. Differences of opinion emerged over Hewa Bora, an operator from the Democratic Republic of Congo. While the UK CAA had banned any Congolese carrier from flying to the UK due to fears that its aviation authority was inadequate, Hewa Bora continued to enter EU airspace on

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 10 its sole European route to Belgian capital Brussels and then on to Paris, as the Belgian CAA considered that Hewa Bora was “marginally acceptable” in safety terms. In the meantime, Hewa Bora will only be permitted to use a specific Lockheed L-1011 for European operations. Other restrictions apply to Ariana Afghan Airlines, which can only operate a specific within EU airspace, while Libya’s Buraq Air’s access to European airports is limited. Air Mauritania can continue flying to Europe for a two-month evaluation period.

Safety reporting still impeded in over half of Europe 16Feb06, ATI, Maastricht ATC Conference Initial findings of a Eurocontrol study of obstacles to air traffic control incident reporting indicate that cultural impediments still exist in about 20 of the organisation’s 35 member states. The report from the Eurocontrol Performance Review Commission, remains concerned about the quality and consistency of safety incident reporting across Europe. It says that 15 states, representing 71% of traffic, can be considered as having mature reporting of airspace events such as separation infringements. Another six states report with low data quality. But nine report irregularly while four others have not reported at all since 2001. The review commission describes the situation as “most unsatisfactory” and has previously pointed out that Europe lacks reliable performance indicators for air traffic management safety and that there is no European-wide analysis of safety-related incidents. Eurocontrol’s study into incident reporting across its membership, commissioned last year, focused on potential legal and cultural impediments in each state which might hinder the process. Legal impediments include provisions within national regulations for judicial authorities to take over technical safety investigations, unrestricted access to occurrence data, or punishment for individuals involved. But cultural impediments remain in more than half of Eurocontrol’s member states where poor management decisions can be evidenced in the fact that only a minority of air navigation service providers appear to have mature safety- management processes, with well-functioning safety reporting and analysis, systematic feedback and follow-up remedial actions. Furthermore, a non-reporting ethos was apparent in the attitude of some [air traffic controllers] whom had difficulty in acknowledging that honest mistakes can be made and that they are not necessarily a sign of personal failure.

E2 Security

Industry groups call for specialist security body to advise EU 17Jan06, ATI Six air transport associations, AEA, ERA, ACI, IACA and the European Cockpit Association (ECA), are pressing for a formal security advisory group to be set up to guide European governments and EC regulators on security matters affecting airlines and airports. EU member states should implement a comprehensive policy for financing security measures, with more stringent measures for aviation funded from national governments’ budgets. The associations point out that additional measures introduced by individual states beyond those laid out in the European regulatory framework could contradict the harmonisation effort. This could potentially obstruct the introduction of ‘one-stop security’, which would eliminate the need for repeated security checks during transfer at EU airports. The associations say additional psecurity measures should be deliberated in full consultation with industry.

F Environment

EC striving for year-end proposal on emissions trading 24Mar 06, ATI (modified by the Commission) The EC acknowledged that the length of the legislative process made it unlikely that aviation could enter the EU ETS in time for the second phase of the scheme at the start of 2008. But it also indicated that aviation would not necessarily have to wait for the start of the third stage in 2013. The EC has also not closed the door on other options, including ending aviation’s exemption from fuel taxation. The EC’s September 2005 Communication on reducing

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 11 aviation’s impact on climate change stressed the need to continue to reform existing bilateral air service agreements so as to remove legal obstacles to taxation of aircraft fuel.

Oslo opens infra-red de-icing station 24Jan06, ATI Oslo Gardermoen airport has opened an infra-red de-icing station, the first to become operational in Europe. Run by SAS Ground Services, the station reduces the need for glycol- based de-icing chemicals by using infra-red heat energy to thaw build-up on aircraft. Resembling a taxi-through hangar, the station is designed typically to accommodate Boeing 737 and Airbus A320 aircraft, although it can handle larger types. Infra-red de-icing, in use at a handful of airports in the USA, is expected to cut glycol run-off by about 70%..

G Aircraft manufacturers

Boeing see bright future as backlog, parts sales grow 01Feb06, ATI Boeing expects to add almost $10 billion to its bottom line within the next two years as it continues to benefit from a boom in commercial aircraft sales and an ongoing productivity drive. The forecast comes as the US manufacturer reports a 37% year-on-year rise in 2005’s net income to $2.57 billion on a 7.6% revenue growth to $22.65 billion.

Bombardier to cancel CSeries program 31Jan 06, ATI Bombardier is to announce the effective end of its CSeries, a program that could have launched the manufacturer into the larger regional jet market.

ATR rise eclipses rivals 24 Jan06 - ATI The resurgence of the market last year has vaulted ATR to the head of the order rankings, with demand for small regional jets collapsing. In overall terms, the regional manufacturers suffered declines in deliveries and orders last year, but the turboprop revival has partially masked the jet decline.

Airbus outperforms Boeing with orders for 1,055 aircraft 17Jan06, ATI European manufacturer Airbus secured net orders for 1,055 aircraft in 2005, outstripping the 1,002 net orders secured by rival Boeing during the year. The European airframer is claiming a 57% share of deliveries during the year. It delivered 378 aircraft, valued at $34.4 billion, against Boeing’s 290 during 2005.

H A final note

Sir Freddie Laker dies Feb/Mar06, DVB Air news summary Sir Freddie Laker, a pioneer of modern day , died in Miami, 09 February, at the age of 83. Sir Freddie began his aviation career after World War II, flying supplies into Berlin in 1948. He started in 1966, initially operating charter flights. He applied to offer low-cost flights from UK to the USA in the early 1970s, and “Skytrain” took off in 1977. Severe financial difficulties led to the demise of Laker Airways in 1982. Peter Morris, Airclaims chief economist, says: “The market example Sir Freddie Laker set for us back then is one of the reasons we can travel transatlantic today for under £250. Consumers have a lot to thank him for.”

Cranfield University: Quarterly Report Q1/2006 ANNEX 1: News 12