European airline industry must consolidate to survive – Breen

May 21st, 2010 - Pat Breen

dsc_83691aEurope’s airline industry will have to consolidate, drive down costs and form new alliances between companies in order to face off new challenges, according to Fine Gael Deputy Foreign Affairs Spokesman Pat Breen TD.

Deputy Breen has today (Friday) published a report on the future of the European aviation industry for the Council of Europe, where he is the Rapporteur for the Economic Affairs & Development Committee. The report has received unanimous support from the Bureau of the Parliamentary Assembly of the Council of Europe.

Speaking at the publication, Deputy Breen said: ‘The future of Europe’s air transport industry depends on companies being willing to form alliances or mergers, and to drive down overall costs. At the same time the European regulatory framework should be extended beyond the European Union’.

“The European industry is already having to deal with the ongoing recession and the disruption from the Icelandic volcano. It also faces increased disruption from growing hubs in the Middle East, US airlines, rising fuel costs and safety and security concerns.

“In fact, European airlines were the worst hit by the 2009 economic crisis, suffering losses of €3.8 billion out of a global total of €9.4 billion.”

The report makes a number of other recommendations, including looser competition rules to allow airlines to secure their futures. It also warns that airlines in the EU are at a disadvantage to airlines based in the US, which imposes much stricter limits on when and where non-US airlines can operate.

“The EU must immediately step up its efforts to equalise conditions between the EU and the US. European airlines should have the same access to the US as American airlines have in Europe. This would benefit both airlines, and of course passengers based in Ireland and the EU.”