European air connectivity falling behind

European hubs have lost a tenth of their market share on indirect connections out of Europe since 2004, falling behind their Gulf intercontinental rivals

Arnaud Feist, president of airports body ACI Europe and chief executive of Brussels Airport, addressed Europe’s connectivity challenge at the 24th ACI Europe annual assembly in Frankfurt and shared his views on related policy implications.

Feist outlined the main findings of the first-of-its-kind report which by measuring and analysing airport connectivity through various levels of aggregation and individual airport connectivity figures for the 461 airport strong membership of ACI Europe, provides an in-depth review of the way connectivity has performed in Europe over the past 10 years.

Feist commented: “Trade, tourism, foreign investment, increased productivity and competitiveness all tally closely to the connectedness of people and businesses. Given that aviation is a prime and unsurpassed enabler of global connectivity, airport connectivity has profound implications on the way in which economic growth is generated. As such, airport connectivity doesn’t just matter at European level, because it trickles down to national, regional and local levels – shaping the fortunes of our communities as well as the mandate of every airport.”

The ACI Europe report reveals the serious and lasting impact of the 2008/2009 crisis on connectivity – in particular for the EU. Since 2008, the connectivity of EU airports has barely increased, with direct connectivity actually falling by -7% – in sharp contrast to non-EU airports, in particular in Turkey, which saw direct connectivity increase by +34%.

The report also shows that while EU hubs have been more resilient than small and regional airports in term of direct connectivity, they are now facing significant competition from hubs located in Turkey, the Gulf and to a lesser extent, Russia.

Since 2004, EU hubs have lost 10% of their market share on indirect connections out of Europe. They have fallen behind the Gulf hubs in terms of intercontinental connectivity – ie. connections offered by hub airports between World Regions others than their own. Back in 2004, the level of intercontinental connectivity offered by the top 3 Gulf hubs (Dubai, Abu Dhabi and Doha) was well below that of the top 3 EU hubs (London-Heathrow, Frankfurt and Paris-Charles de Gaulle) and could be regarded as marginal.

Today, these same three top Gulf hubs have established a leading market position, providing twice the level of intercontinental connectivity offered by the top three EU hubs. Significantly, the intercontinental connectivity of Dubai airport alone is equivalent to the combined intercontinental connectivity of London-Heathrow, Frankfurt and Paris-Charles de Gaulle.

Feist said: “The EU’s decreasing connectivity speaks of slower and less inclusive growth. Our report shows that connectivity cannot be taken for granted, as traffic growth does not necessarily translate into connectivity gains. It also points to Europe being bypassed as an aviation hub and no longer being the significant player in providing global connectivity. These findings are alarming and they should serve as a wake-up call to our Governments and the EU institutions.”

Feist pleaded for a policy response, through the EU developing its own agenda for aviation connectivity. But he was keen to clarify that he was not talking about a defensive agenda, whereby Europe would limit traffic rights for some airlines – or even use trade instruments for rather distant and hypothetical gains: “I am talking about an affirmative agenda, where the EU and Governments would connect the dots and align all aviation related issues around the same objective: using aviation to underpin growth.”

This policy agenda for connectivity primarily requires addressing the looming airport capacity crunch. Given the essential role played by hub airports in global connectivity, the prospect of seeing more than 20 major European airports becoming fully congested by 2035 should be addressed as a priority – as part of EU & national aviation long-term strategic planning.

It also requires doing away with existing bilateral air services agreements which are acting as an artificial constraint on connectivity. Opening up market access through EU negotiated agreements with our main trading partners (BRICS, ASEAN & MINT) should be a priority.

Finally, any credible policy agenda for connectivity also requires more focus on reducing regulatory driven costs, which also end up affecting the cost of connectivity.

Feist was especially outspoken on aviation security: “Europe’s airports are collecting 4.7 billion euros each year from airlines in charges paid for the use of our facilities. Of that amount, 90% – or 4.2 billion euros– is entirely spent on meeting security regulations! And the worst is that no matter how you try to deal with these regulations, passengers still feel inconvenienced. This needs to change – we simply cannot go on like this.”

With a freshly elected European Parliament and a new European Commission taking office in the autumn, Feist considered that the time is right for a new policy direction and then concluded “Our agenda for connectivity is a compelling case for more Europe. But it is also a case for Europe to work differently. The search for prosperity means that the EU institutions need to work better with business. ACI Europe is looking forward to playing its part in addressing this challenge.”

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