ANALYSIS OF THE EU AIR TRANSPORT INDUSTRY Final Report 2006 Contract no: TREN/05/MD/S07.52077 by Cranfield University Department of Air Transport Disclaimer and copyright: This report has been carried out for the Directorate-General for Energy and Transport in the European Commission and expresses the opinion of the organisation undertaking the contract TREN/05/MD/S07.52077. These views have not been adopted or in any way approved by the European Commission and should not be relied upon as a statement of the European Commission's or the Transport and Energy DG's views. The European Commission does not guarantee the accuracy of the information given in the report, nor does it accept responsibility for any use made thereof. Copyright in this report is held by the European Communities. Persons wishing to use the contents of this report (in whole or in part) for purposes other than their personal use are invited to submit a written request to the following address: EUROPEAN COMMISSION - DG ENERGY AND TRANSPORT - LIBRARY (DM28, 0/36) - B-1049 BRUSSELS E-MAIL (HTTP://EC.EUROPA.EU/DGS/ENERGY_TRANSPORT/CONTACT/INDEX_EN.HTM) Analysis of the EU Air Transport Industry, 2006 1 CONTENTS 1 AIR TRANSPORT INDUSTRY OVERVIEW........................................................................................9 2 REGULATORY DEVELOPMENTS.....................................................................................................15 2.1 GLOBAL DEVELOPMENTS....................................................................................................................15 2.2 EU DEVELOPMENTS ............................................................................................................................16 3 CAPACITY AND TRAFFIC .................................................................................................................21 3.1 AIR SERVICES .....................................................................................................................................21 3.2 AIRLINE START-UPS AND FAILURES, 2006...........................................................................................26 3.3 LOW-COST CARRIERS..........................................................................................................................28 3.4 SCHEDULED WORLD OVERVIEW OF CAPACITY AND TRAFFIC...............................................................29 3.5 EUROPEAN PASSENGER TRAFFIC .........................................................................................................32 4 AIRLINES..............................................................................................................................................41 4.1 AIRLINE TRAFFIC ................................................................................................................................41 4.2 FINANCIAL PERFORMANCE, NETWORK AIRLINES.................................................................................51 4.3 FINANCIAL PERFORMANCE, LOW-COST CARRIERS AND CHARTER AIRLINES ........................................60 4.4 FINANCIAL PERFORMANCE, REGIONAL AIRLINES ................................................................................68 4.5 FINANCIAL PERFORMANCE, CARGO AIRLINES .....................................................................................70 4.6 FINANCIAL PERFORMANCE, OTHER MAJOR WORLD AIRLINES ..............................................................72 4.7 AVIATION FUEL...................................................................................................................................75 4.8 EUROPEAN AIRLINE FINANCING ..........................................................................................................77 4.9 EUROPEAN AIRLINE SHARE PRICES......................................................................................................78 4.10 AIRLINE COMPETITION........................................................................................................................79 4.11 AIRLINE DISTRIBUTION .......................................................................................................................85 4.12 CONSUMER ISSUES..............................................................................................................................89 5 AIRPORTS.............................................................................................................................................97 5.1 GENERAL TRAFFIC TRENDS .................................................................................................................97 5.2 TRAFFIC GROWTH AT EUROPEAN AIRPORTS........................................................................................99 5.3 DEVELOPMENTS IN AIRPORT OWNERSHIP..........................................................................................101 5.4 REGULATION AND GOVERNMENT POLICY .........................................................................................105 5.5 FINANCIAL PERFORMANCE................................................................................................................106 5.6 KEY DEVELOPMENTS EEA TOP TEN AIRPORT OPERATORS ................................................................108 6 AIR TRAFFIC MANAGEMENT ........................................................................................................113 6.1 GALILEO ...........................................................................................................................................113 6.2 SINGLE EUROPEAN SKY....................................................................................................................113 6.3 EUROCONTROL .................................................................................................................................117 7 AIR TRANSPORT AND THE ENVIRONMENT...............................................................................123 7.1 AIRCRAFT NOISE DEVELOPMENTS .....................................................................................................123 7.2 CLIMATE CHANGE.............................................................................................................................123 7.3 AIRLINE FUEL CONSUMPTION TRENDS ..............................................................................................127 7.4 AIR VERSUS RAIL ..............................................................................................................................128 8 SAFETY AND SECURITY .................................................................................................................131 8.1 ACCIDENT STATISTICS ......................................................................................................................131 8.2 THE BLACKLISTS AND EXCLUSIONS ON SAFETY GROUNDS ................................................................132 8.3 SAFETY AUDITS ................................................................................................................................132 8.4 TERRORISM PLOT INVOLVING LIQUID EXPLOSIVES............................................................................132 8.5 THE EUROPEAN STRATEGIC SAFETY INITIATIVE (ESSI) ....................................................................133 9 AIRCRAFT AND MANUFACTURERS.............................................................................................135 9.1 LARGE AIRLINERS (OVER 120 SEATS)................................................................................................135 9.2 REGIONAL AIRLINERS .......................................................................................................................136 Analysis of the EU Air Transport Industry, 2006 2 Analysis of the EU Air Transport Industry, 2006 3 Tables Table 1.1: Financial results: major European network carriers......................................................................11 Table 3.1: Changes to domestic networks between June 2005 and June 2006...............................................22 Table 3.2: New cross-border city-pairs, and abandoned routes, by state, 2005-2006 ....................................23 Table 3.3: Departing flights per week from European countries, June 2006..................................................24 Table 3.4: PSO routes imposed during 2006..................................................................................................26 Table 3.5: Passenger flows between EU states, in thousands of passengers, 2006 ........................................34 Table 3.6: Passenger traffic on domestic scheduled services, European states, 2005 - 2006.........................35 Table 3.7: Passenger traffic on international ex-EU services, EU-25, 2005 and 2006...................................36 Table 3.8: Performance of AEA members, 2006 ...........................................................................................37 Table 3.9: Scheduled passenger services of AEA members, 2006 vs 2005 ...................................................37 Table 4.1: Europe’s Passenger Charter Airlines in 2006................................................................................46 Table 4.2: Europe’s charter airlines’ demand in 2006, and change over 2005...............................................47 Table 4.3: Total revenue (USD cents) per RTK - selected European network airlines..................................52 Table 4.4: Labour costs and productivity: 12 European network airlines,