CONNECTIVITY & Aviation Competitiveness EESC Hearing – Integrated Aviation Policy

2 July 2015, Brussels

Why AIR CONNECTIVITY matters?

AVIATION

= prime & unsurpassed enabler of Global connectivity

GLOBAL ECONOMIC SHIFT

> Emerging markets: 50% of World GDP

> Europe = dependence on external trade

AVIATION & ECONOMIC POLICY

> Strategic relevance for Growth & Jobs

> Integrated aviation strategy

Evolving CONNECTIVITY

NEW DEMAND PATTERNS

Evolving CONNECTIVITY (2)

GLOBAL TRANSPORTATION SYSTEMS = reconfigured

Serving the Airport Industry

AIR CONNECTIVITY at a Glance

… But incomplete EU recovery

EUR, NA, LAC lagging behind

Regional connectivity risks

TRAFFIC CONCENTRATION (Summer 2015)

> LCCs moving up market = 0% route growth

> FSC retrenching = -7% route growth

REGIONAL AIRPORTS

> Connectivity level below 2008 for 32% of regional airports

> More dependent on indirect connectivity

> LCC bases = -13% (2015 vs. 2014)

HUB RESILIENCE…

… But Global position WEAKENING

TOTAL Hub Connectivity (since 2008)

> IST: + 400%

> Top 3 Gulf: + 340%

> Top 3 EU: + 14,4%

INTERCONTINENTAL Hub Connectivity (since 2008)

CONNECTIVITY & airports’ agenda

CONNECTIVITY

> = airports’ business & social mandate

> Network development & airline marketing

CONNECTIVITY & airports’ agenda (2)

BOOST COMPETITIVE POSITION

> Cost cutting (since 2008 – per pax & real terms)

- Staff costs: -17,5% / Maintenance: - 51,5% / Energy & Waste: -9,1%

- But external costs: capital costs & security

> Competitive charges

- Charges 2015: -0,8% / 2014: - 1,14%

- Additional rebates & incentives: - 18,7%

> Subsidising airlines

- Charges = 46% of total costs

- +€3 billion unrecovered costs

AVIATION PACKAGE

CONNECTIVITY = Jobs, Growth & Investment agenda

> + 10% air connectivity = +0,5% GDP (per capita)

> 2-way relationship

> The EU economy needs:

- Improved direct connectivity & Strong global HUB positioning

- Complemented by diversified indirect connectivity

CONSUMER-centric integrated policy

> Resist protectionism

- Open Skies

- Airport charges & financing

> Airline interest is NOT consumer interest

AVIATION PACKAGE (2)

KEY MESSAGES & ISSUES

1. License to grow Reconciling aviation growth with our environmental objectives

- Global MBM & industry commitments/achievements

- Airport capacity crunch & financing

2. Global competitiveness Redress competitive gap with leading & emerging aviation powers

- Aviation taxes

- Single European Sky

- Regulatory driven costs: Security & Safety

3. Global & inclusive accessibility

- Open Skies with EU’s main trading partners

- Visa policy

- Airport capacity crunch & small regional airports sustainability

- Intermodality

> 2-way relationship

> Strategic relevance for economic policy (global shift)

From AIRLINE-centric to CONSUMER-centric

> Resist protectionism

- Open Skies

- Airport charges

> Airline interest is NOT consumer interest

THANK YOU

www.aci-europe.org

www.airportcarbonaccreditation.org