- EU will force carriers to use 50% of slots from October
- Travel rebounded faster in Europe than in Asia
- Asian jurisdictions protect carriers with retaliatory rules
- Move could force EU carriers to travel to Asia at a loss
- Lufthansa worries about flying empty planes to keep slots
September 17 (Reuters) – Regulators at Asian hubs like Singapore and Hong Kong have threatened to fight back against European Union plans to force airlines to start using frozen take-off and landing slots during the pandemic coronavirus, a move that could force European carriers to fly empty seats for thousands of miles at a loss.
The authorities controlling slots at major Asian airports are poised to impose similar ‘use it or lose it’ conditions on European carriers serving cities in Asia – raising fears of an industry trade war over it. uneven impact of COVID-19.
After rare unity during the pandemic, when carriers were bailed out or tried to stay afloat, industry executives say the dispute has reignited fundamental differences in a fragmented industry as the world stages a multi-stakeholder recovery. speeds.
“Is this a trade war? Definitely the germ of one,” said former Australian aviation negotiator Peter Harbison, chairman emeritus of the Sydney-based CAPA Center for Aviation.
“And this will be accentuated as more and more airlines collapse and international markets remain closed, or at best, uncertain.”
Tensions have grown since July, when the EU announced plans to force airlines to use 50% of their rights or lose them to competitors from next month. The move partially restored competition rules that had been lifted as airlines struggled to survive the pandemic.
But while the EU decision reflects a well-underway traffic recovery in the predominantly short-haul European market, Asian carriers are protesting that they will be unfairly penalized because their long-haul networks will take much longer to complete. get well.
Some Asian regulators have already warned European airlines that they will have to fly at least 50% of the time, industry sources said, risking political struggles over the future of transport links that are important to global trade.
Singapore, one of many Asian jurisdictions to align previously undeclared ‘reciprocity’ rules, has included provisions to ensure fair treatment, said Daniel Ng, director of air transport at the Civil Aviation Authority from Singapore.
In Asia, long quarantines remain the norm for travelers and airlines only operated 14% of their 2019 international capacity in July, well below the 46% of 2019 levels seen in Europe and 48% in America. North, according to data from the International Air Transport Association (IATA). shows.
Cathay Pacific (0293.HK) publicly warned last month that the slower recovery in Hong Kong meant it risked losing valuable overseas airport slots and undermining the city’s hub status. Read more
Taiwan’s China Airlines (2610.TW) and Korean Air Lines (003490.KS) expressed concern over EU rules in statements to Reuters, while Singapore Airlines (SIAL.SI) declined to comment.
In Europe, Lufthansa (LHAG.DE) – the EU carrier with the most flights to Asia – said strict EU rules could ultimately hurt the climate as well as airlines, if they are forced to fly empty planes to keep slots. Air France (AIRF.PA) and KLM said their decisions to fly were not based on airport slots.
‘SHOCK PHASE’ COMPLETED
The EU has broken with a recommendation from the global industry and has tightened the rules for the winter timetable season, which runs from October to March, after heavy lobbying from low-cost airlines like Ryanair (RYA.I), with large short-haul networks, and European airports. , many of which are privatized and attempt to generate income.
“We are no longer in an immediate shock phase,” said Aidan Flanagan, head of safety and capabilities at Airports Council International Europe. “We are now in a situation where the market is stable with levels much lower than we were in 2019, but it is stable.”
The European Commission said in July that the 50% utilization rate – compared to 80% in normal times – was chosen to ensure good use of airport capacity and benefit consumers. It has also granted exceptions so airlines don’t need to hit 50% while strict measures like quarantine that make travel difficult remain in place.
The Commission did not immediately respond to a request for comment.
SIX WEEKS TO ANSWER
Once travel restrictions are lifted, Asian carriers will have to increase flights to the European Union within six weeks or risk losing slots even if demand is slow to return.
“When the demand is not there, it is unreasonable to expect people to operate,” said Lara Maughan, head of slots at IATA’s global airports. “It’s a very short window they have once the restrictions are removed to sort of recalibrate this whole operation.”
René Maysokolua, managing director of slots manager at German airport FLUKO, said his organization has been informed that some Asian countries are telling European airlines they should fly 50% of the time or risk losing their slots in retaliation to EU rules.
Singapore, Hong Kong and South Korea are among those taking a tougher line against European carriers, said an industry source who was not authorized to comment publicly on the matter.
Authorities in Singapore and Hong Kong confirmed reciprocity arrangements were in place, but declined to comment on specific cases.
The Korea Airport Schedules Office did not respond to a request for comment, but Korean Air, a member of the country’s slots working group, confirmed the arrangements.
Meanwhile, even as the potential for conflict brews between Asia and Europe, the United States on Thursday announced milder winter season rules for international carriers than the European Union. Read more
Reporting by Jamie Freed in Sydney; Editing by Kenneth Maxwell
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