25 Juni 2014

[250614.EN.BIZ] EU Aviation Is An Overtaxed, Poorly Regulated Mess, Says IATA Chief

EUROPEAN governments are a stumbling block for its "over-taxed, erroneously regulated" airlines, says International Air Transport Association (IATA) director general Tony Tyler, former CEO of Hong Kong Cathay Pacific Airways.

Speaking in Rome to a conference organised by the International Centre for Competitiveness Studies in the Aviation Industry, Mr Tyler, said Europe was the weakest airline sector in the developed world.

All this despite the fact its commercial airlines deliver more than a third of goods traded internationally valued at US$6.8 trillion, he said.

Mr Tyler also spoke of "chronically mismanaged air traffic management system, insufficient airport capacity and overall costs for infrastructure that are too high".

Taxation is the biggest barrier to competition in Europe accounting for nearly $40 billion for airlines and passengers, he said, double that paid in Asia-Pacific.

"European governments are using it for short-term tax receipts rather than for long-term economic value," said Mr Tyler. "Particularly notable is the UK's Air Passenger Duty which collects $4.5 billion annually."

"Italy's proposal of a regional noise tax - IRESA is a wrong move particularly as it does not comply with ICAO policies, international agreements or even EU law," he told delegates.

Regulation also impedes progress, said Mr Tyler, in that it often conflicts with existing global standards. For example the EU regulation 261 seeks to "protect" passenger rights but it conflicts with 60 other passenger rights regimes.

Called to discuss the "Italian and European Air Transport System in the Global Scenarios", conference had the backing of the Italian Ministry of Infrastructures and Transport.

Mr Tyler told the audience that a healthy aviation sector is a pre-requisite for competitiveness and growth for a region which supports 200-plus airlines, 9.2 million European jobs and $660 billion of Europe's GDP. "In other words, an economic necessity," he added.

"We are encouraging governments to work through ICAO [the UN's International Civil Aviation Organisation], a forum to support global standards in air transport, including a mandatory global carbon offsets," he said.

"We are counting on Transport Minister Maurizio Lupi to be a strong force for much-needed progress and set the stage for aviation to make an even greater contribution to European development in its next century," said Mr Tyler.

Source : HKSG.

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