Yearbook 2002 cargolux Association of European Airlines Association of European Airlines . Avenue Louise 350 B - 1050 Brussels Tel. +32 (0)2 639 89 89 Fax 639 89 99 E-mail [email protected] August 2002 ______________ Dear Reader of the AEA Yearbook, This is the 19th time that I have had the honour of presenting an AEA Yearbook. This edition will be the last under my aegis and I would like to use this opportunity to thank all members of the small Secretariat. Everybody has contributed to what is nowadays often referred to as ‘the AEA’. It is fascinating to see what the small talented team can come up with. To a certain degree the Association is mirrored by the Yearbook. If one compares earlier editions with this one, then one gets a feel for the dimension of change. It is with deep regret that my last official reporting as Secretary General is for the year 2001, which includes 11 September. However, I am convinced that life will go on and we must look to the future and help tailor a better one. K-H Neumeister Adria Airways, Aer Lingus, Air France, Air Malta, Alitalia, Austrian Airlines, British Airways,BMI British Midland, Cargolux, Croatia Airlines, CSA, Cyprus Airways, Finnair, Iberia, Icelandair, JAT, KLM, Lufthansa, Luxair, Malev, Meridiana, Olympic Airways, SAS, Spanair, SWISS, TAP Air Portugal, Tarom, Turkish Airlines. Disclaimer Any views or opinions presented in this Yearbook are solely those of the AEA and do not necessarily represent those of individual member airlines. This AEA Yearbook, as always, is the product of a team effort. Sue Lockey was the overall co-ordinator, and was responsible for the production of Section V. David Henderson wrote the text. Dario Spila produced the graphics and assisted David Lyssens in production of the statistics and supporting data. Didier Poriau was in charge of preparing the layout for the colour printing, which was done in-house by Jef Swalus. SEPTEMBER 11TH, 2001 September 11th was, first and foremost, Other industries, too, have been a human tragedy. Any effect it may extremely hard-hit. An obvious example have had on the economics of our is the insurance sector. Not only were industry, or of any other, must be massive financial losses sustained on regarded as secondary. September 11th, but the majority of these were third-party, that is, people and Yet, the airline industry can claim special buildings on the ground. Such risks in status when the events of that day, and the past were treated as incidental to the their consequences, are discussed and standard passenger and hull insurance. reviewed. It is an unfortunate fact that civilian aircraft have often been the target Now, the airlines are being asked to for acts of terrorism, but never before cover this new risk, while at the same have they become the weapons time regular premiums have increased themselves. substantially. As a consequence of the events of Unsurprisingly, security has also been September 11th, our industry has suffered massively increased. This, too, carries substantial damage – and casualties. A with it a price-tag. It also carries with it a number of airlines which were going penalty to the passenger in terms of concerns on September 10th are no more. delay and inconvenience, and in some cases, intrusiveness. They include two of the four airlines which, in 1952, founded the Air Research So, the airline industry has been hit from Bureau, the original ancestor of AEA. several sides – fewer passengers, With the disappearance of Sabena and reduced operations, inflated costs, Swissair, respectively 78 and 71 years of increased regulatory oversight, lost jobs, aviation history have been swept away. grounded aircraft, corporate crises. At these, and at the surviving airlines, It will, of course, return to a state of many thousands of jobs have been lost; normality but, like the New York skyline, in the industries which serve the airlines, the landscape will have changed. many thousands more. Some pillars of the industry are not there any more. In a volatile Many cities have lost service and many environment, the process of thousands of passengers have been redistributing the market among deprived of choice in making their travel the remaining players will plans. At the time of writing, Brussels – continue for some time to come. the Capital of Europe – has no direct service by a European airline to a non- Growth will resume. It is too European destination. early to predict whether it will resume at the pre-2001 rates of The airlines have not been the only ones increase. to suffer. The travel and tourism industry is one of the world’s biggest employers Saddest of all, September 11th and one of the world’s biggest economic probably put an end, once powerhouses. Many parts of it – hotels and for all, to the ‘romance’ of and car-hire, for example – are suffering air travel. exceptional hardship. ASSOCIATION OF EUROPEAN AIRLINES i CONTENTS September 11th, 2001 i SECTION I AEA AIRLINES IN 2001 I-1 At a Glance I-2 Consolidation and Competition I-4 Traffic Development in 2001 I-6 Air Freight I-9 Operating Result I-10 Fleet I-12 Workforce I-13 Punctuality Performance I-14 SECTION II SEPTEMBER 11TH - OTHER ASPECTS II-1 The Political Response II-2 Security II-3 Insurance II-5 Slots II-6 SECTION III REBUILDING FOR THE FUTURE III-1 AEA Chairman’s Message III-2 Strengthening the Value Chain III-4 Infrastructure Provision III-6 SECTION IV OTHER ISSUES IV-1 AEA Passenger Commitment IV-2 Satellite Navigation IV-4 Radio Frequency Spectrum IV-4 Aircraft Noise IV-5 EU/US Aviation Relations IV-6 SECTION V SPOTLIGHT ON THE AEA V-1 AEA Highlights of 2001 V-3 Mission Statement V-7 Membership Criteria V-7 The AEA Team V-8 Airline Profiles & Review of 2001 V-11 SECTION VI KEY STATISTICS VI-1 Key Statistics - Total AEA VI-2 Key Statistics - By Carrier VI-4 AEA Fast Facts VI-11 What do we mean by…? VI-12 ASSOCIATION OF EUROPEAN AIRLINES I - 1 AT A GLANCE OPERATING PROFIT/LOSS Total Scheduled Routes 2.5 billion current US$ after interest The overall operating result for AEA 2.0 airlines in 2001 is estimated at US $3.02 1.5 1.0 billion – the industry’s worst-ever loss. 0.5 Total revenue for the year was a massive 0.0 7.1% lower than in 2000. -0.5 -1.0 -1.5 -2.0 -2.5 -3.0 est. -3.5 90 91 92 93 94 95 96 97 98 99 00 01 -3.02TOT billionAL FINANCIAL US$ LOSS ON TOTAL-7.1% SCHEDULED Revenue ROUTES QUARTERLY TOTAL OPERATING RATIO 2000 2001 (est) The industry was already struggling 106 through the Summer of 2001 and 104 uncharacteristically failed to produce a 102 profit in the middle two quarters of the year. After the tragic events of 100 th September 11 , the final quarter was a 98 financial disaster with income falling short 96 of expenses by a margin of almost 10%. 94 92 90 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 After interest I - 2 ASSOCIATION OF EUROPEAN AIRLINES MONTHLY TRAFFIC 40% growth in RPKs The slump in demand which followed th 30 September 11 was dramatic. The Terrorist Attacks on the USA September 11th 2001 immediate traffic loss was comparable to 20 the aftermath of the Gulf War in 1991 but 10 the subsequent depression has been 1991 1992 2001 2002 0 much more prolonged. -10 -20 Gulf War - Allied counter offensive January 17th 1991 -30 -40 WEEKLY TRAFFIC 10% growth in RPKs 0 Geographical Europe -10 -20 Total International -30 -40 North Atlantic -50 -60 W35 W37 W39 W41 W43 W45 W47 W49 W51 -5.4%TOT TrafficAL SCHEDULED Loss RTKs TOTAL PASSENGERS CARRIED ON NORTH ATLANTIC ROUTES 30 000 passengers carried (000) The most vivid illustration of the lost traffic is in the North Atlantic market, where the downturn set the growth trend 25 000 back rather more than two years. Substantial decreases continue to be 20 000 recorded through 2002. 15 000 10 000 1991 1993 1995 1997 1999 2001 ASSOCIATION OF EUROPEAN AIRLINES I - 3 CONSOLIDATION AND COMPETITION For the first time in the almost 50 years It is, nevertheless, noteworthy that both that AEA has been in existence, a Swissair and Sabena were part of the European national airline has ceased Qualiflyer alliance, a grouping which had operations. arguably ceased to be viable when it lost its US partner, Delta. Not one, but three. In early 2001 Balkan Bulgarian Airlines stopped operating, The events of September 11th have done after a troubled transition from State nothing to change the view of many control to foreign ownership. observers that Europe’s full-service airlines will continue the consolidation Even more dramatic were the closures of process around the remaining four Global Sabena in late 2001 and Swissair in early Alliances. 2002. Outside of the mainstream of the For many years, a popular scenario industry, the so-called ‘no-frills’ carriers amongst industry observers has been a have shown substantial growth, both reduction in the number of airlines in before and after the US attacks. Europe, particularly national airlines. To some, these latest developments have The sector has also seen some been simply a part of an inevitable process. significant structural developments. British Airways divested itself of Go, It is noteworthy, however, that in the case which was then acquired, in mid-2002, by of both Belgium and Switzerland, the Easyjet. At the same time, Easyjet also demise of the national airline was purchased BA’s German daughter- followed – almost seamlessly – by the company, Deutsche BA.