European Commission Vice-President Siim Kallas, responsible for transport, today presented to the College a preliminary assessment of the economic consequences for the air transport industry of the volcanic ash crisis.

European Commission Vice-President Siim Kallas, responsible for transport, today presented to the College a preliminary assessment of the economic consequences for the air transport industry of the volcanic ash crisis. In addition the Vice President presented a range of possible short-term actions and structural measures to help the air transport industry overcome this unprecedented period. Faced with this crisis, the first priority of the Commission was to intervene to facilitate the opening of airspace under strict safety conditions so that millions of stranded passengers could get home and to ensure that EU passenger rights are fully respected. Now that the situation is normalising, the focus is on a package of short-term and structural measures for the air transport industry, which are proposed in association with Vice-President Almunia (competition and state aid) and Commissioner Rehn (economic and monetary affairs).

European Commission Vice-President Siim Kallas, in charge of transport, said: “The European Union has been hit by an unprecedented crisis with the closure of airspace due to the volcanic eruption leading to more than 100,000 cancelled flights and more than 10 million passengers unable to travel. The first priority for the Commission was to facilitate the opening up of more airspace to get stranded passengers home. Since the beginning, passengers have been our first priority and my message to industry has been very clear – EU passenger rights must be fully respected. Now, as we are getting back to normal our focus can shift to relief measures for the industry. This is about practical measures to provide relief to the air transport sector so they can weather this crisis. The Commission is also proposing structural changes to ensure we do not face this situation again.”

Role of the European Union in crisis management

The European Commission took the initiative over the weekend of 17–18 April, with the Spanish Presidency and Eurocontrol, to propose a co-ordinated European approach to allow for the gradual re-opening of the European airspace while ensuring safety. The situation has been now normalised but remains under constant supervision.

The package presented by Vice-President Kallas to the College today contains possible short-term and more structural measures to respond to the crisis, including:

1. Measures where immediate co-ordination is needed to provide European solutions.

Co-ordinated European action is urgently needed to revise the existing international procedures in case of volcanic activity. The Commission will lead this process forwards, establishing an expert group, and developing a new methodology for risk management. On the basis of exchanges with other world regions, the Commission intends to prepare a proposal to be submitted by the EU to the International Civil Aviation Organisation (ICAO) General Assembly in September 2010.

Co-ordinated application of rules on state aid. The Commission considers that Member States can rapidly implement measures in favour of the air industry which do not constitute state aid – notably loans and guarantees granted at market conditions. Certain support measures could also be envisaged as state aid from Member States to make good damage caused by natural disasters or exceptional occurrences. If support from Member States takes the form of state aid measures it must be granted on the basis of uniform criteria established at European level. It cannot be used to allow unfair assistance to companies which is not directly related to the crisis. The Commission could produce a communication to establish clear and precise guidance in this regard.

Co-ordinated enforcement of air passenger rights. Air passenger rights provided by EU law remain fully applicable. There must be a level playing field so that one company does not get unfair advantage over another by failing to fully meet its obligations. The Commission will work closely with national authorities to ensure the regulations are applied in a consistent way.

2. Short-term and temporary relief measures

The closure of airspace in the EU justifies the adoption of measures to introduce, on a temporary basis, flexibility in the application of current rules and policies to ease the pressure on airlines and help with immediate cash flow problems, for example:

The Commission will recommend that slot coordinators take into account the effects of the crisis, so that airlines can keep slots which were not used during the crisis and the period immediately afterwards.

The Commission will not object to Member State measures to waive operational restrictions for short periods – e.g. flight restrictions – until the return to normality of the overall network and the repatriation of all stranded passengers.

With regard to route charges, the Commission will recommend to Member States and to Eurocontrol to assess immediately the possibility to defer the actual payments for en-route charges for a defined period of time. This is an important measure to provide some relief to immediate cash flow problems. Member States should take all appropriate steps in relation to their air navigation service providers.

3. Medium-term structural measures

Accelerating the implementation of the Single European Sky

The need for EU leadership in the event of airspace management crisis means giving the highest priority to accelerated implementation of the Single European Sky II package (SES II), due to come into force in 2012. The Single European Sky package aims at redesigning the European sky according to traffic flows rather than national borders. In particular the Single Sky package would put in place a single European system for air traffic, which would co-ordinate the work of 27 national air traffic controllers. The Commission is proposing to fast track many elements of the Single European Sky package already by the end of 2010. In particular, the appointment of a European network manager before the end of 2010 is crucial. If the network management function had been designated prior to the crisis, the situation would have been quite different. A more harmonised and co-ordinated approach to risk and flow/capacity assessment, and the ability to formulate quickly proposals for solutions are needed.

Pan-European crisis planning for transport – a European mobility action plan

The protracted closure of European airspace following the volcanic eruption in Iceland has left extremely frustrated travellers stranded in airports. The Commission wants to see pan-European mobility plans put in place for future major disruptions. In particular, the Commission would favour focusing efforts on ensuring that, if one mode of transport cannot deliver, other transport modes can quickly substitute in the interest of passengers. If there is political support from ministers on 4 May, the Commission could be given a mandate to take forward work on these issues.

Establishing an aviation platform

The Commission will establish an aviation platform, convened by Vice-President Kallas, with all stakeholders at European level, to facilitate long-term co-ordination with the air transport sector, as well as to allow for effective short-term follow up to these crisis measures.

What happens next?

Certain measures, particularly short-term and temporary relief measures can be activated immediately by the European Commission. The package of proposals presented by the Vice-President today will be discussed by transport ministers meeting at the extraordinary Council in Brussels on 4 May.