Thursday 29 September 2016

'Ineffective' EC needs overhaul as Walsh and O'Leary seek airport cuts

Published 21/01/2016 | 02:30

Willie Walsh, chief executive officer of International Consolidated Airlines Group (IAG), gestures as he delivers a keynote speech at the Airline Economics Dublin 2016 event this week. Photo: Aidan Crawley/Bloomberg
Willie Walsh, chief executive officer of International Consolidated Airlines Group (IAG), gestures as he delivers a keynote speech at the Airline Economics Dublin 2016 event this week. Photo: Aidan Crawley/Bloomberg
Ryanair CEO Michael O'Leary. Photo: AFP/Getty Images

IAG boss Willie Walsh and Ryanair chief executive Michael O'Leary have called for European airport passenger charges to be slashed.

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IAG and Ryanair are part of the newly-formed Airlines for Europe association that was formally launched in Amsterdam yesterday. The other members include Lufthansa, Air France-KLM and EasyJet.

Mr Walsh also called for the EU to be transformed and said that the European Commission's concern about the continuing rise of Gulf carriers is a "complete nonsense".

The European Commission's recently launched aviation strategy cited tackling the rise of Gulf carriers such as Etihad, Emirates and Qatar Airways as a priority. Qatar Airways owns a 10pc stake in IAG, which in turn owns Aer Lingus, British Airways, Iberia and Vueling.

But Mr Walsh insisted that the Gulf carriers aren't a problem and that the EU should be concentrating on other issues.

"The Commission doesn't need to worry about the Gulf carriers," he told the Irish Independent. "What the Commission needs to worry about are issues it controls. It controls things like Single European Sky - we have a very inefficient air traffic environment in Europe.

"It's estimated that we burn about 12pc more fuel than we need to because of the air traffic control (ATC) infrastructure in Europe. That's where Europe needs to focus on."

He added: "Forget about the Middle East carriers. We'll compete with them and we do compete with them. This idea that Europe needs to worry about them is a complete nonsense."

Mr Walsh insisted that the EC needs to be transformed.

"I'm pro-EU, but my experience with the Commission is that they love talking about issues that they can't control," he said. "And when it comes to talking about issues they do control, they're very uncomfortable because it's not an effective organisation."

Mr Walsh said the members of the new airline group don't have a common position on the Middle Eastern carriers.

"We're not going to try to get to a common position. We're going to stand in front of the Commission and say, 'you can sort out ATC, so sort it out'."

The new airline organisation said that in the last 10 years, charges rose 90pc at the 10 largest European airports, while airline fares dropped 20pc over the same period.

It urged the EU to act on legislation to effectively regulate monopoly airports.

In Spain, the new group said airport charges rose 255pc in the past decade, while they climbed 141pc in Italy and 120pc in the UK.

The UK charges the highest passengers charges, at €44, while in Switzerland they're €38 and €35 in Germany. Additionally, airlines collect government taxes, which aren't included in those passenger charges.

In 2014,Ireland's Commission for Aviation Regulation set passenger charge limits for the period 2015-2019.

The commission had initially planned to cut the maximum passenger charge that could be levied by the DAA at Dublin Airport by 22pc, or 4.8pc a year.

But on foot of a Ministerial directive, the annual cut to the maximum possible charge was reduced to 4.2pc.

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