ERA AIRLINES REPORT SLOWEST GROWTH SINCE 9-11
While flawed regulatory processes continue to add needless costs

9/10/2007

Member airlines of the European Regions Airline Association (ERA) have reported passenger growth of 3.7% for the period January – June 2008, the lowest increase since 2001 when passenger growth for the year reached only 3.4%. The first half 2008 figure compares with 7.7% passenger growth for the same period in 2007.

Revenue passenger kilometres growth also dropped from 9.7% for the first half of 2007 to 6.0% over the same period in 2008. However, with a slightly slower growth in capacity of 5.6%, compared to 7.5% in 2007, ERA airlines still reported a slight rise in average scheduled passenger load factor; 63.8% was reported for the first six months of 2008 compared to 63.3% for the same period in 2007.

Despite these small increases in growth, yields continue to decrease and airlines will find it difficult to absorb the substantial increases in fuel costs. Fuel costs alone for the 2nd quarter of 2008 have risen by 41% compared to the same quarter last year. Fuel costs now represent 13% of total costs.

Mike Ambrose, director general of ERA, says: “European regional airlines continue to grow at double the rate of major airlines worldwide. However, this does not mean that European regulators have Carte Blanche to impose additional and unnecessary costs and burdens on an industry that is already crippled with high fuel prices and slowing demand.

The industry is doing everything it can to save fuel and to undertake research into sustainable algae-based biofuels, but such advances do not occur overnight. Regulators should be helping us to undertake these initiatives. Instead they are continuing to pursue the imposition of additional taxes and regulatory burdens as a result of poor decision-making processes. ERA will continue to lobby for better regulation procedures until the European Commission and European Parliament recognise the need to introduce reforms to enable them to better understand the full effects of legislative initiatives.”

ENDS