Local view for "http://purl.org/linkedpolitics/eu/plenary/2001-11-15-Speech-4-011"
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Madam President, ladies and gentlemen, the American Airlines plane crash in New York on Monday 12 November has, of course, reminded everyone of the difficult and dreadful plight of the air transport sector. There is a risk that this latest accident will worsen still further the economic and social crisis that the sector has been facing since 11 September. However, this should not make us forget the roots of this crisis, which is the result, not only of the combination of economic problems directly linked to the attacks on 11 September, but also of previous structural difficulties which were revealed and aggravated by the events of 11 September.
As regards the cost of additional security measures, Member States have agreed to take these on board initially, without this being regarded as state aid. However, they have emphasised the need for users and operators to contribute towards this cost in the long term, when the situation has become more normal again.
As for the four-day closure of airspace, the Council requested and obtained from the Commission a certain amount of flexibility to enable limited aid to be granted beyond that period, on the basis of objective criteria of course, to airlines which were the victims of the closure of airspace and its consequences. Both the Member States and the Commission believe that this support must respect the major elements of the Community acquis regarding the containment of state aid to the air transport sector, and must not under any circumstances cause distortions in competition. We do not accept the idea that American companies should use state aid in order to smash prices. Our companies are suffering from the unfair competition practised by the American airlines. We must not allow such a situation to continue within the European Union. This is why the Presidency supports the Commission’s proposal to adopt a code of conduct together with the United States, precisely in order to prevent or remove such distortions in competition. In addition, the Council has taken into account the request by certain airlines for more flexibility in applying the procedures for allocating time slots.
Moreover, one of the key factors in the rapid recovery of air transport is the winning back of passengers’ confidence. With this in mind, the Presidency and the Commission have worked very hard, with the support of the other Member States, in order to define and implement, as rapidly as possible, measures intended to reinforce security at airports and on board aircraft. This will be a two-stage operation: the first stage, which is a matter of priority, will be to apply, on a Community-wide basis, the recommendations of the European Civil Aviation Conference on passenger and baggage checks at airports, which are the result of many years’ experience. The earlier these checks are carried out, the more effective they are. As you know, the Council has invested a great deal of time and energy, particularly through the Council-Commission joint experts group, in order to achieve a policy agreement among Member States as of the forthcoming Council meeting on 7 December.
In a spirit of close coordination with the European Parliament, I believe that it is very important to achieve our aims as quickly as possible. The Council of 16 October also expressed the hope that the European Parliament should be in a position to give its opinion on this subject as quickly as possible. In other words, I believe that the public would find it hard to understand if the Council or Parliament were to drag its feet on such a crucial issue.
The Presidency is at the disposal of the European Parliament in order to facilitate a close dialogue between the two institutions, and to enable the Members of the European Parliament to benefit from the expertise of its specialists, with a view to the rapid adoption of measures.
At a second stage we shall be studying the advisability of additional security measures on the basis of the final report of the joint Presidency-Commission
group, which will be submitted on 7 December. Some of these measures will perhaps require legislative initiatives supplementing the first stage, represented by the ‘Security’ regulation currently being examined.
The Council on 16 October thus made it possible to react coherently to the crisis in the air transport sector, but we should now be seeking to reconstruct a solid and sound foundation in this sector, even though we know that the current crisis may continue for several months.
As my contribution to today’s debate, I propose to share with you my personal analysis of the prospects that exist for this sector and the measures that should be taken. This debate, which the Council has not yet embarked upon, is all the more necessary within this House, because there is no doubt that in the months to come Parliament will be involved in it.
In structural terms, therefore, we must ensure that the sector is allowed to restructure itself, by reorganising the skies over Europe around a number of major alliances.
One way of enabling the airline companies to restore their real viability is to improve the way in which the pressure of competition is channelled in this sector, in particular by having recourse to some form of consolidation. Without going so far as to recommend mergers or shareholdings which would require a full-scale remodelling of the system regulating competition, the creation of alliances or commercial alignments would be enough to enable a start to be made on the relieving of some problems. For example, it would make it possible to limit the over-capacity which is such a burden on the sector’s performance, and to reduce the effects of excessive competition on certain routes.
As President of the Council of Transport Ministers and a Belgian Federal Minister, I am particularly concerned about this situation. It seems to me more than ever vital to implement structural, economic and social reforms so as to enable the sector to overcome the current crisis, to give it a boost in the form of social measures, and to lay the foundations of sustainable development in this sector in the long term. In order to do this, we must understand the real roots of the problem and identify the obstacles that must be removed, and I should like to make a start on that here and now, with you and with Mrs Diamantopoulou.
It is a question of allowing economies of scale and of network, which are particularly highly developed in this sector, to operate properly.
Together with the Commission, we must also think about adopting a strategy which will enable us to cope with similar situations. In particular we must study the adjustments to the European competition rules that will be required, at the same time overcoming, if possible, the current legal obstacles.
This raises the sensitive issue of how the companies concerned can be controlled, and it means that we need to think more about the role of the European Community in relation to third countries, and in particular the United States. In effect, we must allow the major European airlines, around which future air travel will be organised, to be better armed to face their major North American rivals. With this in mind, I personally support the eventual granting of a clear mandate to the Commission, to negotiate with our international discussion partners, particularly in America. It is important for the future of civil aviation that the European Union should speak with a single voice.
However, I believe that the preliminary and essential stage in this step forward is to establish a regulatory framework for the air transport sector which will be more coherent and complete. This ‘internal’ framework should lay a healthy foundation for the redeployment of the sector and enable us to avoid any distortions in competition. Out of the wasteland we have at the moment, we need to create a clear and binding regulatory corpus.
This movement needs to cover all areas of aviation, whether safety, security, the fight against noise pollution or more general environmental protection.
With this in mind, the Commission’s proposals for a ‘single European sky’ should be examined without delay. This project is the point of departure for a whole range of regulatory measures and should be as detailed as possible in order to build up a strong and united European market. The European Union must in time become an equal partner in international negotiations, particularly with its American discussion partners.
I hope that I and my fellow members of the Council of Transport Ministers will have an opportunity to come back to the question of the Community’s competency in international negotiations on matters concerning air transport. We shall have to give some thought to the conditions governing such a mandate, and the guarantees that will be given to Member States regarding the transparency of negotiations conducted in the name of the Community.
In-depth action must also be taken to deal with the social aspects of the crisis. The bankruptcy of Sabena and the redundancies announced draw attention to the importance of and the urgent need for this. The collapse of an airline causes job losses not only within that company itself, but also among its subcontractors. Sabena was the key client of many businesses, not only Brussels-National Airport itself, but also the various providers of airport services. We cannot rethink the civil aviation sector without rethinking the whole of our social policy in the context of liberalisation.
The Belgian Presidency therefore believes that it is vital that it is able to intervene to support social plans and retrain employees, while at the same time respecting the principle that public money should not be used to subsidise companies.
It is also vital that there should be a more far-reaching analysis of the social and environmental impact of the liberalisation of air transport, with a view to creating the conditions for greater harmonisation in this area.
The main cause of the fragility endemic in the European air transport sector is its over-fragmentation, along with a lack of both consolidation at Community level and strategic alliances. Up to now, the Community structure has been based on the desire to create a single market in which optimum conditions for competition are guaranteed. The extreme competition that results from this, in a sector where marginal costs are relatively low, gives rise to problems of over-capacity and at the same time prices that are too low in relation to the average costs borne by the airlines. This particularly fierce competition has therefore helped to make the airlines more fragile, and so they are vulnerable to any economic upset because their margins are so small.
Finally, it will be necessary to develop more specifically targeted measures by the European Social Fund. In effect this means that the programming documents drawn up by the Commission and the Member States will have to be adjustable so as to cater for crises in any sector. This will allow prompt reaction to any increase in the number of people seeking jobs, so that they can be retrained as soon as possible and their knowledge and skills brought up to the necessary levels rapidly and appropriately. The problem lies in encouraging people to be adaptable.
Among the other vital requirements I will also mention the need to implement an information monitoring system at Community level, with regard to redundancy decisions, the need to increase consultation with social partners, and finally the need to introduce crisis-forecasting management into the European Change Observatory set up on 23 October in Dublin.
In this respect, it is important that the ‘Employment and Social Policy’ Council meeting on 3 December should study the Commission’s communication on the restructuring of undertakings, which the Commission announced at the time of the Marks [amp] Spencer crisis last summer. It will be a question of having to consider the concept of the social responsibility of undertakings in the context of restructuring measures. The December ‘Employment’ Council will certainly enable an agreement to be reached on the directive on informing and consulting workers, which also represents a definite step in the right direction in the form of the consultation of representative bodies in times of crisis.
Finally, looking at the long-term prospects, the challenge we are facing also includes the task of ensuring that civil aviation becomes a sustainable activity. Security and safety, economic stability and respect for the environment are the essential components of sustainable development in this sector, which leads me to my last point: the need to make progress in the environmental aspect of the sector.
The responses to economic and social difficulties that are needed in the short term, like the measures on security standards that are needed in the medium term, must in no way prejudice the task of continuing and expanding the efforts being made in this area. Environmentally responsible growth in this sector will, in the long term, be the vital condition for the survival of this form of transport.
We made considerable progress at the ICAO General Assembly in Montreal in September. We must take advantage of what the European Union obtained on that occasion – and believe me it was not a foregone conclusion – in other words that consideration should be given to local, national and regional differences when defining these public policies, in order to adopt European regulations which effectively guarantee a high level of environmental protection.
We must put into practice the progress that has been made in policy, in particular by rapidly adopting adequate anti-noise measures, but also by adopting measures to reduce greenhouse effect gases, in the context of the undertaking that we gave in Kyoto and confirmed in Bonn and Marrakesh.
The American air transport industry has for a long time been much more concentrated than its European counterpart, which together with other factors has helped it to cope, for better or worse, with the crisis which is affecting the United States in particular. Although the difficulties in the air transport sector were caused not by the attacks of 11 September but by structural considerations, the events of that day imposed new constraints on what was already a difficult situation, and it was those constraints which precipitated the current crisis, and which have been made worse by the present context of an economic recession.
I shall list the major constraints, in chronological order. Firstly, US airspace remained closed for four days, then passenger confidence was reduced and there was a considerable fall in the amount of air traffic operating – 20% fewer holiday flights compared with the year 2000, particularly on transatlantic routes where there was a drop of 30% – and to top it all there was the tragic accident two days ago, which will no doubt make the situation even worse. Then there is the fact that insurance companies have decided to raise insurance premiums for both passengers and aeroplanes in the case of accidents due to a state of war or to acts of terrorism. They have also decided to limit the airlines’ coverage for third-party damages in the same circumstances to USD 50 million. What is more, additional security measures of necessity mean additional costs for airports and airlines. Last but not least, American aid, consisting of USD 15 billion in immediate aid and Federal credits to companies in addition to USD 120 million for suppliers of services, have now caused distortions in competition in relation to the European industry, in particular because they have made possible predatory practices on the part of certain companies on the transatlantic routes.
The economic and social consequences for Europe of this combination of structural and economic factors are well known: airlines are experiencing serious difficulties, some of them even going into liquidation, investment is at a standstill and the whole air transport sector is experiencing a terrible crisis.
What has been the Council’s response to all this so far?
At their meetings on 14 September and 16 October, the Transport Ministers had already discussed the consequences for this sector of the attacks on 11 September, as had the European Council of Economic Affairs and Finance Ministers at its meeting on 21 September, with a view to issuing a rapid and coordinated response from all Member States which would make it possible to support the restructuring of the sector while at the same time trying to retain the basis for healthy competition. The meeting of the Council of Transport Ministers on 16 October in particular examined the proposals contained in the European Commission’s Communication of 10 October on the economic situation of the air transport sector, with a view to implementing a certain number of its proposals.
First of all the Council very rapidly coordinated Member States’ measures to deal with the insurance situation. It decided that state aid provided to airlines and suppliers of services in order to make up for insufficient or non-existent cover for risks resulting from war would be extended until 31 December. Such schemes have to be declared to the Commission and examined by it on a monthly basis."@en1
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