Published: 20 February 2015

th Published: 20 February 2015

Introduction

Following a year of change in the European Union, with a new European Parliament elected in May and a new Commission taking office in November, the beginning of 2015 marks a useful point to take stock of European aviation policy.

This briefing aims to provide an update on the current state of play for EU aviation policy. Beginning with an overview of legislative work carried out during the Barroso Commission, the briefing will finish with a brief look at what’s on the horizon for the sector. Stakeholder responses are provided, as well as an overview of the key players.

Contents

Introduction ...... 2

1. Setting the scene ...... 3

Background ...... 3 The Rock ...... 3

2. The Juncker Commission ...... 4

First steps...... 4

Scanning the horizon ...... 5

Investing in Europe’s infrastructure ...... 5

4. Main players ...... 6

European Commission ...... 6

European Parliament ...... 6 Other Institutions ...... 7

3. Cleared to land? ...... 7

Views from the EU bubble ...... 7

Industry views ...... 7

1. Setting the scene

Background

The beginning of 2015 saw work continue on a number of legislative files first proposed in the European Commission of José Manual Barroso.

Of the ambitious Airports Package that was put forward in 2011, only one legislative proposal has thus far made it onto the books, this being the Regulation on Noise Restrictions at Community Airports. Work continues on the Slots Regulation, while the remaining element of the Package, the Groundhandling Regulation, was withdrawn in the Commission Work Programme for 2015 owing to there being no foreseeable agreement. The decision seems to largely been dictated by industry and centre-left reservations on the effect of further liberalisation of baggage and ground-handling on the sector.

Also to receive the axe in the Commission Work Programme for 2015 was the Airports Charges Directive, on which little progress had been made since 2010. Currently the Commission has not indicated whether it intends to table new proposals on the issues of security costs and shared responsibility.

The Rock

All work, including that on the Airports Package, was and continues to be delayed by the major issue afflicting Implementation of the Single European Sky EU aviation policymaking: the status of Gibraltar Airport in EU aviation legislation. The Slots Regulation

Disagreements between Spain and the United Kingdom over the application of EU law to the airport, which stands on Passenger Name Records land partially reclaimed from the Bay of Gibraltar, have delayed negotiations on a number of aviation files including the Air Passenger Rights Regulation Airports Package, the implementation of the Single European Sky (SESII+), and the revision of the Air Passenger Rights Regulation. National Emissions Ceiling Directive

The issues extending from the status of Gibraltar Airport have extended from the Barroso Commission into the Commission of Jean-Claude Juncker, with there being no end in sight in terms of a resolution between the two arguing countries.

Nonetheless, work continues: in December 2014, the Council of the European Union reached its first reading position on the Implementation of the Single European Sky (SESII+) by crucially setting aside the thorny issue of the airport on the isthmus to be decided at a later date.

With the first reading position of the Council on the proposal now known, trilogue discussions have since begun. Nevertheless, agreement and adoption of the proposal as a whole rests on Spain and the UK reaching a settlement, which seems unlikely at the current point in time.

The same applies to the Air Passenger Rights Regulation, for which trilogues restart in 2015. While both the Parliament and the Council are keen to make progress on a Regulation which has been vaunted and criticised in equal measure, it too must wait for a solution to the Gibraltar question.

In the environmental policy field, the EU ETS continues to only apply to flights within European airspace, with flights to and from non-EU countries benefiting from the decision to ‘stop the clock’ on its application until at least 2016. The timetable in this area is largely dependent upon ongoing negotiations in the ICAO on a global ETS.

Due to a variety of factors, some out of the control of the European institutions, the EU approach to aviation has largely stalled, and eyes have turned to the horizon in search of new momentum.

2. The Juncker Commission

First steps

The new Commission of Jean-Claude Juncker entered office on 1 November 2014, bringing with it a host of new faces and a number of changes to the very structure of the Commission that, at these early stages, seem positive for EU policymaking and for aviation.

The headline change was the introduction of ‘project Read more from DeHavilland EU teams’: six Vice-Presidents and the High Representative  Juncker Commission chart [see here] will now be responsible for cross-cutting major policy fields, each leading a cluster of Commissioners holding portfolios relevant to their respective field.

For aviation, the key teams are ‘Energy Union’, headed by Vice-President Maroš Šefčovič, along with ‘Jobs, Growth, and Competitiveness’, headed by Vice-President Jyrki Katainen. Each team will work on policy important to the aviation sector, such as emissions ceilings and the implementation of the vaunted €315 billion Investment Plan for Europe.

Many in the aviation sector were disappointed by the fact that transport did not receive its own dedicated project team, with some feeling that this omission reflects transport and aviation slipping down the policy priorities of the Commission. This was something compounded by the fact that President Juncker had not mentioned transport in his much-publicised ten priorities, launched as part of his campaign during the European elections.

While the proof of the effectiveness of the new project teams will only come with time, the change represents a positive step, introducing new horizontal layers into what was previously a very vertical institution. Whereas Commissioners would previously often compete over policies and legacies, the new structure should hopefully result in a more focussed and collective effort from the Commission.

Scanning the horizon

For the aviation sector, the biggest new development was the proposal of a new Aviation Package in the Commission Work Programme for 2015. The full details of the package are yet to be elaborated on by the Commission, but it is known to contain a forthcoming Communication “identifying challenges and measures for improving the competitiveness of the EU aviation sector” and a proposal for the revision of the EASA Regulation 216/2008.

While the revision of the EASA Regulation is something that has been discussed for some time now, less is known about the other elements of the Package. Whatever is put forward by the Commission is likely to reflect a focus on boosting growth and creating jobs, with Director-General of DG MOVE João Aguiar Machado having expressed a desire to work towards “more efficient markets, technological leadership and quality investment in infrastructures” and having described “competitiveness, employment, environment and safety” as core priorities for the aviation sector.

Much speculation continues on the actual date of the release of the Package. At the end of 2014, rumours circulated that it would be released in spring 2015 owing to a high level Latvian Presidency conference on aviation which was supposedly to be held in the second quarter of the year. The conference, however, has failed to materialise, and the Commission has yet to reveal its hand.

Investing in Europe’s infrastructure

The other major announcement relevant to the aviation sector was the Investment Plan for Europe. Announced quickly by President Juncker upon taking office in November, the Investment Plan aims to boost growth and jobs through investment, including ‘quality investment in infrastructures’.

The European institutions have acted quickly. The Latvian Presidency confirmed on 17 February that the Council plans to reach an agreement on legislative component, the European Fund for Strategic Investments (EFSI), in March 2015, maintaining a schedule that should enable new investments to begin as early as mid-2015.

While the potential recipient projects of the €315bn fund are still being discussed, it seems likely that infrastructure investment may benefit airports across the region. What is yet to be seen, however, is how the fallout from the ‘ghost airports’ controversy that broke at the end of 2014 – in which a Court of Auditors report highlighted wastage of taxpayer money on airports with low passenger usage – will affect funding for new infrastructure projects in the aviation sector.

Much work is still to be done, but it appears that new momentum is beginning to build around European aviation policy. The next few months will prove to be key in determining in what direction the renewed momentum will take the European aviation sector in the years to come.

4. Main players

European Commission

Violeta Bulc, Commissioner for Transport Read more from DeHavilland EU

Slovenia’s Commissioner was the final piece of the  Violeta Bulc biography [see here] Juncker Commission jigsaw as the replacement for original nominee Alenka Bratuşek, who resigned following a poor showing in her confirmation hearing. A former telecommunications entrepreneur, Ms Bulc comes to the role with little experience of either transport or of high political office, having only been in the cabinet of Slovenian Prime Minister Miro Cerar for five months prior to her nomination as Commissioner.

Joao Aguiar Machado, Director-General, DG MOVE

Director General of DG MOVE since May 2014, Mr Aguiar Machado has had a long and extensive career at the European Commission that started in 1986. Until his appointment at DG MOVE, Mr Aguiar Machado worked predominantly on trade policy.

Margus Rahuoja, Director for Aviation and International Transport Affairs, DG MOVE

Previously Head of Cabinet of for Siim Kallas, the Transport Commissioner in the Barroso II Commission, Mr Rahuoja is now Director for Aviation and International Transport Affairs in DG MOVE. Mr Rahuoja is Estonian and studied both at Tallinn University and later at the School of International Relations, University of Amsterdam.

European Parliament

Michael Cramer MEP (Greens, DE)

The newly appointed Chair of the Transport and Tourism Committee, Mr Cramer will lead MEPs in their response to new proposals on aviation.

Monika Hohlmeir MEP (EPP, DE)

As President of the Sky and Space Intergroup, Ms Hohlmeir can be expected to have many views on the forthcoming Aviation Package.

Jacqueline Foster MEP (ECR, UK)

One of the leading voices on aviation policy in the European Parliament, former British Airways employee Jacqueline Foster can be expected to continue being one of the dominant figures on EU aviation policy in the European Parliament and on the Transport & Tourism Committee.

Franck Proust MEP (EPP, FR)

Representing the South-West of France – base-of-operations for aerospace giant Airbus – Mr Proust has understandably had a lot to say on EU aviation policy. Mr Proust is additionally a Vice-President of the Sky and Space Intergroup.

Other Institutions

Patrick Ky, Executive Director, EASA

As the head of the European Aviation Safety Agency (EASA), Mr Ky will have a vital role in informing the European Commission during the revision of the EASA Basic Regulation that is set to be a part of the Aviation Package.

Anrijs Matīss, Latvian Minister for Transport

As Latvia’s Transport Minister, Mr Matiss will lead on the Latvian Presidency’s efforts in the transport and aviation sector during the first half of 2015. Mr Matiss has been Latvia's Minister for Transport since March 2013.

3. Cleared to land?

Views from the EU bubble

Vice-President of the Sky and Space Intergroup Frank Proust (EPP, FR) led MEPs in reaction to for the announcement of the Aviation Package, stating that “it is with great satisfaction that I welcome the Aviation Package proposal featured in the European Commission's 2015 Work Programme.” Mr Proust added that “aviation is one of the only sectors able to get our economy going again - the real economy.”

Industry views

Association of European Airlines (AEA)

Athar Husain Khan, CEO of AEA, welcomed the package, stating that “AEA is looking forward to the upcoming discussions with the EU Commission about the Aviation Package. A unique opportunity to address for once and for all the current competitiveness issues and to create a regulatory environment that supports the sustainable development of European aviation.”

European Regions Airline Association (ERA)

ERA has welcomed the Package as an opportunity to “define, with regulators, a clear strategy that supports regional aviation in Europe and that works for both consumers and the industry.”

Airports Council International (ACI Europe)

ACI EUROPE fully supported the renewed momentum introduced by the announcement in the Commission Work Programme, stating that “this is a promising start and we applaud Transport Commissioner Bulc. Seeing aviation amongst the new EC priorities in the context of its jobs and growth agenda is very encouraging news.”