"The air transport industry is hugely resilient and we will be able to adapt and overcome this, as long as politicians and institutions understand that aviation is a key tool in economic recovery, in the cohesion of Europe and necessary for social welfare.
Montserrat Barriga is the Director General of the European Regions Airline Association (ERA).
We are experiencing a global crisis due to the COVID-19 pandemic which is causing a socio-economic impact at all levels, but which is particularly important in air transport. What is the current situation of a sector that currently employs more than 12 million people in Europe?
The situation is very complicated. The industry is suffering a lot because we are at 90% operating levels below last year, only cargo flights are operating as well as some repatriations and little else. Many airlines have completely stopped operations. The turnaround will also be very slow, we do not expect to return to 2019 levels of flights and passengers. This aviation stoppage will obviously have a ripple effect on other tourism businesses, airports, aeronautical services, etc. Aviation is a driver of development and job creation.
The European Union's management of the coronavirus crisis is being criticised for lack of solidarity and coordination. Is it extrapolable to the aviation sector? What measures are being taken at the European level while the pandemic is still active?
Absolutely. Various general and also sector-specific measures have been adopted, such as delays in payment of taxes, air navigation charges, remission or deferral of payment of aircraft parking charges, etc. But these measures have been taken by EU member states in an unequal and uncoordinated manner. We believe that if the measures were applied across the board it would be much better, as it would not create comparative and competitive inequalities between the various airlines that, for their own business, operate on an international stage in Europe.
In such an exceptional situation as this, the work carried out by the different entities and associations in the sector, such as ERA, is fundamental. What actions have they put in place since the crisis broke out?
The associations are now playing a key role in ensuring that airlines get the support they need from their governments and from the European Union. We are working against the clock to ensure that this support materialises, as events have moved very quickly.
ERA has more than 200 members, including airlines, airports and OEMs, among other companies and suppliers to the industry. They have recently sent a letter to the European Commission, together with other associations, calling for urgent, short-term measures to ensure the viability of a critical industry. What is their proposal?
Exceptional situations call for exceptional measures, and one of the main areas of work at the moment is to get the Commission and the European Parliament to approve that airlines can offer vouchers instead of cash for passengers to make changes and refunds. Airlines have used their cash surpluses to pay for the minimum resources necessary to maintain their operating licence (employees, aircraft leases and maintenance) and to be able to resume operations and meet other payments. At this time the sacrifices are enormous and we all need to understand this and be patient until we are back in the air, including consumers.
Are regional airlines suffering the most during this crisis?
I would not say this, as those who suffer most are those who had the least cash reserves, regardless of the business model or size of the company, but I do believe that at the end of the crisis many regionals will be so severely affected that some will have to stop operating for good. I hope that this will only be the case for a few companies that already had other structural problems and not the general rule, as it would be a serious loss for connectivity in Europe and the diversity of options for the end consumer, with a direct impact on price rises and a reduction in the number of destinations and connections on offer.
What will be the main challenges for the air transport sector once this crisis is over?
Getting back to 2019 levels will take time. This is a volume and economies of scale business like any industry, with high fixed costs and high asset dependency. If there is a surplus of aircraft, it will be a challenge to restructure supply and readapt it to demand. Passenger tastes and needs will also change, and there will probably be psychological as well as economic reluctance. We have enormous challenges ahead of us. But the air transport industry is enormously resilient and we will be able to adapt and overcome them, as long as politicians and institutions understand that aviation is a key tool in economic recovery, in the cohesion of Europe and necessary for social welfare.
