Archive

Tag Archives: brexit

UK Air Routes Agreements Offer Reassurance Post-Brexit Passengers travelling to Canadian airports can continue to enjoy clear passage after Brexit, according to the UKs Transport Secretary, following an aviation agreement made between the two countries at the end of last month.

The agreement spells good news for the aviation industry, which has been surrounded by uncertainty following the UKs decision to leave the EU in 2016. The UK-Canada arrangement will replace the current EU aviation agreement, thus assuring continued access to the aviation routes the UK currently enjoys with Canada.

This follows the UK government’s announcement last month of a new Open Skies agreement with the United States, which will also mirror and replace the current EU arrangement.

The recent agreements will ensure continued access to vital air routes that carry millions of people across the Atlantic every year, will also make sure business operators will not lose out, and will pave the way for future trade deals supported by air travel.

The UK-Canada air route has been steadily growing over the past six years, and more than 3.5 million passengers were transported last year alone.

This is all good news for the aviation industry, and for global trade opportunities, which rely on the UK as a major European hub. These two latest arrangements with the US and Canada come after an announcement that another eight bilateral arrangements have already been concluded with other countries – Switzerland, Israel, Iceland, Kosovo, Montenegro, Albania, Georgia and Morocco.

UK transport secretary, Chris Grayling said after the US agreement, ‘Our transatlantic flights have helped to bring our countries even closer together, strengthening our ties and boosting our economies. This new arrangement and those concluded with 8 other countries around the world are proof that the UK will continue to be a major player on the world stage after we leave the EU.

Advertisements

Airport News | Trends in Aviation for 2019While passenger traffic numbers will continue to grow at a stable rate, some industry experts are looking at what could be trending next year, such as how many airports are looking at expansion projects all over the world, how the competitive framework will create opportunities and how disruptive the UKs departure from the EU will be.

Biometrics and integration

Intensified competition driven by passenger growth is already encouraging greater investment in airports infrastructure. This is most commonly seen in the introduction of biometrics, and the drive towards the single-token airport journey. Biometrics are creating opportunities, but are also creating disparate data, so integration is becoming the focus of airports on a global scale.

Brexit

Across Europe, traffic is increasing, and industry analysts conclude that the rise in line with GDP could spell airport revenue increases of 2-4%. The uncertainty still surrounding Brexit and the UKs access to the European Common Aviation Area (ECAA) following March 2019 is creating concern about reduced passage of passengers and freight through the UK.

Although many experts agree that the likelihood of a standstill of EU-UK traffic is slim, in the short-term, traffic could be affected, particularly when another area of uncertainty surrounds the right of movement of passengers between the two areas and whether visa arrangements will be made. Airport operators and airlines with a reliance upon EU-UK traffic may face a period of disruption which could result in revenues being affected.

Merging airports and acquisition

Airports across the world, and notably in the Asia-Pacific region are looking towards the consolidation of assets as competitive positioning increases. Opportunities for mergers and acquisitions are popping up all over Europe due to the expansion of favourable conditions such as low interest rates, for example.

This trend is likely to increase, according to industry analysts, and additional opportunities look favourable in regions such as Latin America, where in 2019, 12 airports in Brazil are being scheduled for investment and privatisation. This is expected to attract global interest.

ACI Europe concerns over Brexit and protectionism | Airport BlogACI Europe delivered an overview of its ‘burning issues’ last month in the annual New Year Reception in the European Parliament.

Although optimism remains high about traffic growth, and ACI Europe reaffirmed its support for more ‘Open Skies’, concerns remain in place about the potential impacts of Brexit and about airline protectionism.

Dr Michael Kerkloh, CEO of Munich Airport and President of ACI Europe, addressed the gathering to voice fresh warnings and concerns that also mentioned the ‘self-serving nature of [airline protectionism] the current campaign for more airport charges regulation.

Brexit concerns

Following the reception, ACI Europe’s board met with EC Task Force 50 to talk about Brexit impacts on the aviation industry across Europe. The first phase of Brexit negotiations have delivered a small sense of relief for UK and EU airports, who are glad that there appears to be some form of support of a transition period, but Dr Kerkloh remains concerned that the risk of a ‘no-deal’ scenario are still very real. He said, ‘For now, we still remain completely in the dark as to what will happen at the end of the transition. One thing is pretty clear though – the political dynamics shaping these negotiations are very much at odds with business interests.

Dr Kerkloh added that ACI Europe has repeatedly stressed, since the beginning of the Brexit negotiation process, that there is a ‘need to keep the most liberal aviation regime between the UK and the EU – to safeguard air connectivity.  Anything more restrictive than the current Single Aviation Market will come at a cost.  There is just no winning alternative.

Open Skies

ACI Europe has concerns over EU Regulation 868/2004 on unfair trading practices in European aviation. As staunch supporters of the Open Skies initiative, ACI Europe, according to Dr Kerkloh, ‘We are worried that some are trying to use the revision of Regulation 868 to advance a protectionist agenda.  Don’t get me wrong: Open Skies need to go hand in hand with fair competition and we do support the Commission proposal. But the rules must be crystal clear and specific – they should not be open to different interpretations.  Also, Regulation 868 should be triggered only when damage is demonstrated and only as a last resort – after all other applicable dispute resolution mechanisms have been exhausted.  These are essential safeguards to prevent abuses in the use of this Regulation and maintain trust with our trading partners internationally.

Airport charges

Currently, the European Commission is evaluating the EU Directive on airport charges, and Dr Kerkloh unequivocally defined what needs to be at the very heart of this evaluation. He said, ‘These new market dynamics need to be at the core of the evaluation.  That means that the evaluation must resolve the contradiction in policy approaches between airport charges and State aid.  The Commission’s own State aid rules and the European Court of Justice have already acknowledged the reality of airport competition.  So, I have a very simple question: How can we be told that airports compete when it comes to looking at State Aid, but that airports suddenly no longer compete when it comes to dealing with airport charges?

Copenhagen Airport to Upgrade Cargo Facilities | Airports NewsCopenhagen Airport has announced plans to develop a brand new, 20,000sq m cargo centre in a €40million project that is expected to take two years.

Currently, the airport handles cargo transported by passenger aircraft, known as belly cargo. It has been an important mission for the airport operators, who realise that cargo is a big part of the business model. According to Peter Krogsgaard, chief commercial officer for the airport, ‘This cargo can make up more than 10% of revenue on a route. Today, belly cargo accounts for 40% of the total tonnage at CPH and is up 7% this year.

The new cargo facility will be sited within the current cargo processing centre at the airport, which will be redeveloped over the next two years to ensure minimum disruption. Plans for the facility include implementation of the latest airport technology, supporting both manual and automated processes to increase efficiency and create a robust platform for future cargo handling.

A refrigeration area, which the airport’s pharmaceutical clients will find particularly attractive, is planned for the facility, amongst other separate areas to address safety and storage issues.

As the European region approaches major changes over the next few years with the Brexit process, the airport operators also realise that cargo handling will also change, and they want to make sure they are ready. ‘We see huge potential in developing air cargo at Copenhagen Airport. In the coming years, there will be an even greater need for good air cargo facilities for handling the growing cargo volumes to and from China and other places.’

It is not just the airport that understand the need for improvement, as noted by Claus Lonborg, CEO of Copenhagen Capacity, the official organisation for Greater Copenhagen’s investment and business potential, when he said ‘Greater Copenhagen is increasingly popular amongst international logistic companies. The new €40 million air cargo centre will not only strengthen the competitiveness of Nordic and international import and export companies, it will also create a platform for further growth.’

The airport is also working to attract new business already to the new facility, with plans to add more long-haul routes as part of a wider strategy.

passenger-processing

As the UK prepares to leave the European Union, uncertainty is still very much the biggest challenge for those speculating about the impacts of the decision.

The Brexit campaign centred on border control, and the promise that the UK would regain control of her borders, yet as the debates continue, the only certainty that remains is that the impact on border control will be determined by the UK’s position within the European Economic Area, and any decisions made on free movement of people and goods.

With little more than a year to go, the challenges that may be faced need to be addressed now, if major delays or flight cancellations are to be avoided.

Although a ‘business as usual’ approach is being discussed, it is impossible to judge the true impact until firm decisions have been made. Speculation states that the following additional measures and challenges may appear:

  • Additional clearance approval – this is likely to occur for UK citizens travelling throughout the EU
  • Visa completion – a likely addition for citizens on both sides of the border
  • Ground delays – these will be likely, as additional border control clearance processes are carried out
  • Longer queues – these are inevitable, at least during the early stages, as pressure increases on border control personnel
  • Increased security checks on cargo and goods – the removal of tariff-free trade agreements will inevitably increase the time spent on checks. Currently, paperwork checks are seamless and minimal under the EU guidelines
  • Longer waiting times for cargo trucks – an inevitable by-product of additional security and paperwork checks. Current infrastructure could struggle with additional pressure
  • Rising costs – again, inevitably, additional resources, time and regulatory approval will drive up the cost of moving goods and passengers around the UK and the EU

Although these challenges could pose major problems for the countries on either side of the UK border, the introduction of advanced technology and solutions could help to minimise the impact of additional security measures. The latest advancements and applications are designed to maintain maximum efficiency, while ensuring compliance at regulatory level.

There is little doubt that the aviation industry, travellers and manufacturers will feel the initial effects of Brexit, taking a hit to infrastructural demand. It remains to be seen whether decisions can be made quickly to enable operators to put the solutions in place in time.

Airport Owners Seek Clarity Over Concerns About Passenger Numbers After Brexit | Airports NewsFive UK owners of Stansted, Heathrow, Gatwick, Manchester and London City airports, have joined forces to put pressure on the Government in the form of a report that suggests that passenger numbers are likely to fall when the country leaves the EU in 2019, if a deal is not in place by then.

The airports commissioned EPI Economics to produce the report, following concerns about the EU treaties that are currently in place that allow British airlines to operate internationally outside the EU.

The report highlights concerns that ‘without the security of guaranteed future access to the single aviation market, the greater the negative economic consequences will be.

This backs up recent warnings from Ryanair, although other airlines have dismissed the likelihood of flights being affected.

Economists have gone further, and have issued a ‘worst-case scenario’ that suggests that the effects could be catastrophic for the aviation industry, with a drop in passenger numbers in 2019 that could total 8 million. A more conservative estimate gives a figure of 2.3 million, but the uncertainty that has surrounded the Brexit issue since the vote was cast has led to confusion and concern across all sectors of the aviation industry.

The report urges the UK Government to prepare to strike a deal with the EU by mid-2018, and suggests that passengers will wait before they make any holiday or travel plans, in case issues arise post-Brexit. As flight schedules are planned and sold up to a year in advance, the report stresses that clarity is necessary to enable airlines to plan too.

Heathrow airport remains confident that the UK Government understands the position of the aviation industry, and the contribution it makes to the country’s economy. Its plans for a third runway are still on the table, and it says that expansion will become more necessary after Brexit.