Europe’s Aviation Challenge – Speech by Pat Breen T.D. given at European Civil Aviation Conference in Strasbourg

July 7th, 2009 - Pat Breen

p1020188 Summary Position
The aviation business in Europe must meet the challenges it faces with a mindset that is characterised by both realism and positivity. The current global downturn is affecting all industries at all levels and aviation is not immune to this financial crisis. However, with imagination and a proactive plan, the European aviation industry can survive and re-emerge as the force it needs to be across the continent once the planned for up-turn comes. I have acquired an insight into the aviation industry from my involvement in issues surrounding Shannon Airport. Shannon stands as a unique gateway between the U.S and Europe and is one example of what is possible even in an economic downturn. I hope to use this insight in reporting on the European Aviation Industry.
I am grateful to this 31st Plenary Session of the European Civil Aviation Conference for providing me with this early opportunity of introducing myself to your constituent bodies and conference delegates.

My appointment last week as Rapporteur to the report into the European Civil Aviation Industry will bring me into close contact with every element of the aviation sector over the next twelve months. For that appointment I am indebted to the Parliamentary Assembly of the Council of Europe for the honour and trust my fellow members have bestowed on me. As a very recent appointment I am a new name and a new face to the membership of the European Civil Aviation Conference. I am no way new to aviation.

My life like that of my countrymen and women on the west coast of Ireland has been shaped by aviation. I was fortunate to be born near Shannon Airport in County Clare which is a place of is a place of outstanding beauty and scenic grandeur.

My country recognised aviation as a phenomenon that would change the world and the fortunes of its peoples. Air transport and access were changed for all time by the unprecedented advances in aviation technologies that took place during World War II. In 1939 passengers were crossing the Atlantic by flying boat and in stages stretching over 24 hours. But by war’s end in 1945, land planes were taking over.

That could have spelled the end for civil aviation in my part of the world. But instead, Ireland and my corner of the country became the air crossroads of the world when Shannon Airport became an essential re-fuelling stop on the emerging North Atlantic aviation routes.

In 1947 it was announced that the new Shannon Airport was by government decree to be a Duty Free Airport and this designation was important in that it put Shannon and Ireland on the World Aviation charts. The First Duty Free at Shannon Airport was followed by a series of other innovations which included another first when Ireland opened up to a overseas industrial investment with the Shannon Free Zone and the first new town in Ireland was developed which has grown up to what is now the mature town of Shannon.

From the outset Aviation was seen as the Great Opportunity. But it was also recognised as an opportunity that would pass because it would only be a matter of time before aircraft would come along that would bypass the Shannon re-fuelling stop.

My generation grew up with the sounds and high level sights of Civil Aviation. Fifty years later the impact of Civil Aviation is seen and felt in every facet of our lives. Back in the 1950s, Shannon Airport stood out as a beacon in an impoverished Ireland because the airport supported 1,000 jobs where Ireland was also in an economic crisis. Today there are 10,000 jobs in the Shannon complex alone and tens of thousands more that have been prompted by Shannon Airport and Aviation.

What Civil Aviation brought to Ireland through Shannon Airport was CHANGE and the ability to recognise the inevitability of Change and the imperative of changing and adjusting to new developments and new circumstances. Most of all in opening us up to New Ideas and to Change, the combination of Aviation and Shannon Airport also meant that Change brought Opportunity. And this is the Shannon message that I want to bring to this conference and to the commission from the Council of Europe to report on how civil aviation is going to face up to the enormous changes that are already taking place in our world.

I would contend that there are few places or regions in the world have come through the dramatic changes in the fortunes of its people than the area around Shannon Airport. The innovation and enterprise initiatives which were characteristic of the Shannon approach from the start has continued right up to the present day. In its strategic location between the Old World of Europe and the New World of North America, Shannon looks both East and West. Shannon was a trail blazer in unique partnerships with Aeroflot which led to the opening up of Duty Free outlets not only in Russia but in many other locations across the globe. Shannon was also unique as the setting for the first American Immigration pre-inspection and clearance point in Europe which opened in the mid-1980s. That partnership milestone has just now advanced to new trail blazing status with the opening at the end of this month (July) of the first US Customs and Border Protection pre-inspection station outside the borders of the United States.

The great lesson from Shannon is that adversity can be turned to advantage and that upheaval, like the plough, opens up fertile new ground for new growth. Time after time Shannon has shown that opportunity comes in many guises and is often disguised. Having opened up Ireland to new thinking and welcoming partnership and know-how, Shannon has endured and grown through Innovation, a spirit of enterprise and initiative – but most of all through Confidence in facing the future and the will to build on strengths.

Aviation brought revolutionary change to the world and the only aspect that has been permanent is change itself. Change and adapting to change has become an everyday feature of aviation and of decision making in the boardrooms of the aviation sector. We have witnessed and taken advantage of the revolution brought on by the low cost carriers led from Ireland by Ryanair and the domino effect on airlines and fares that followed here in Europe just as it did in the USA in the jet stream of South West Airlines. In June of this year the number of passengers carried by Ryanair grew by 13% to 5.8 million passengers while they carried 60.5 million passengers in 2008 the largest annual increase in their history.

Lowering the cost of flying for the consumer has come at a cost to the industry. Even before the slump in demand and the ascent in costs, aviation here and elsewhere has been caught in a whirlwind. The troubles that British Airways is grappling with have been in the headlines for the past few weeks but the storm has been gathering for some time.

We have seen big name airlines having to merge to survive and many airlines enter strategic alliances e.g. Air France/KLM Alliance; demand for business class comforts on short haul flights is falling back in line with cost cutting. Aviation patterns right across Europe are changing; last week a high ranking member of the British Government flew into Ireland on a regular airline. Thousands of British Airways Staff have volunteered pay cuts to help the Airline save money in recent weeks and they are not alone in introducing cost reduction measures. Its great rivals at Virgin Atlantic are also on the route and cost cutting path. The uncertainty does not end there and no airline is predicting that the current round of cost cutting is going to going to be of decisive effect. There is every possibility of further turbulence and a shake out that may well change aviation out of all recognition.

Many Airlines are now adapting and introducing new fuel efficient technologies in their efforts to address concerns about the environment impact of Air Travel. In March of this year when the IATA met in Geneva they announced a plan to change the way commercial planes land in order to reduce emissions of carbon dioxide. By 2013 some 100 European airports will allow planes to descend all the way from cruising altitude to the runway in one smooth glide, saving up to 450 kilograms of CO2 per landing.

The development of new generation aircraft has been marred by difficulties. The first test flight for the new Boeing 787 Dreamliner was originally scheduled for 2007 and it now has now been postponed five times.

It was originally due to be operational by 2010 and it is very unlikely that this target will now be achieved. Airbus faced similar problems developing the A380 superjumbo. The next generation of fleet of Boeing 787-900 and 777-300 ER aircraft on long haul routes were to see the gulf grow between business and economy travel with Air New Zealand already flagging the idea of ditching economy seats in favour of sleeping pods. However, that was before the worst of this global economic recession was biting. What will the future hold now for the A380 on long haul routes and will Airport Authorities be willing to invest in restructuring their facilities now to accommodate these aircraft.

In looking forward with great relish to my new task of blending together the combined intelligence, knowhow and experience of the European sector and allied field of activity, I would not presume to anticipate what will emerge over the next twelve months of our deliberations and study.

But two things are clear at the present time. Firstly, the economic recession that has beset the entire developed world is unprecedented in its extent. Secondly, in the recovery that must certainly come, we will not be returning to the position of strength that we previously occupied. We are moving to a new era. In doing so, we need to take the utmost care. In essence, we are on the threshold of a new era of Change. On the basis of my Shannon experience, I look forward to the challenge and to the inputs from all sectors in formulating the strategy of meeting that change.