EU air connectivity crushed by high costs and burdensome regulations | News
The International Air Transport Association (IATA) has released data showing that European air connectivity will largely level off by 2025, with a net growth of 1% in the total number of routes connecting the continent (both internally and with other parts of the world). This is below the compound annual growth rate of 1.5% over the past ten years.
“The growth of airline route networks reflects both demand and operating environment developments. The near collapse of European Union (EU) air links by 2025 is no surprise. The regulatory burden is heavy, costs are high and the EU’s well-documented underlying competitive problems have not been seriously addressed. Consumer protection is a good example of this. The shortcomings of current regulations are well known, but attempts to correct them seem doomed to make them worse. These are the kinds of frustrations that make it more difficult for airlines to increase the connectivity that Europe depends on to drive jobs and economic growth,” said Thomas Reynaert, IATA Senior Vice President External Relations.
In 2025, 1,127 routes were canceled across the EU.
1,281 routes were added (568 of which were ‘starts’ of routes that had been operated for the past ten years but had been interrupted for at least a year).
The net profit of 154 routes is a growth of 1% of the route network which now amounts to 14,797.
The benefits of Europe’s air connections are clearly visible: more than 9.2 million jobs and a gross domestic product of €760 billion are generated by aviation and aviation-related tourism in the EU. Spending on business, social opportunities and leisure is underpinned by the growth in air travel that has united Europe and connected Europe to the world.
“Europe’s prosperity depends on extensive and efficient intra- and intercontinental connections. Every new air route creates new jobs, business and social opportunities. Fortunately, European politicians have numerous opportunities to introduce smarter regulations and help airlines compete and grow,” said Reynaert.
The priority steps that European policymakers need to take are:
Reforming passenger rights regulations in the EU261. In particular, increasing the time thresholds for compensation.
Reduce the cost of Sustainable Aviation Fuel (SAF). Introducing a book-and-claim process for purchasing SAF would allow airlines to purchase SAF where it is produced most efficiently. The e-SAF mandate in its current form should be scrapped and revenues from the Emissions Trading Scheme should be used for cheaper SAF production.
Strengthen the regulation of airport and air navigation charges to improve cost efficiency.
Provide more flexibility in releasing slots at airports during crisis periods.
Abolish national passenger taxes, following the example of Sweden.
“The most immediate opportunity lies in the EU261. Modest reforms to the compensation thresholds will help reduce the €8 billion cost of this runaway regulation. European politicians are meeting now to decide this. We urge them to look up and see what is going on. The price of jet fuel is at record levels. Infrastructure costs are rising. One simple thing – cutting the costs of the EU261 – could boost the economy of many marginal make routes more manageable for airlines, and reinvigorate the growth of air connectivity for the benefit of European citizens. They must act without delay,” said Reynaert.
