European Regions Airline Association

Airlines Highlight the Potential Dire Impact of Slot Rule Changes, the Threat of a Badly Implemented ETS and the Risks to European Competitiveness of VAT Proposals

Three Resolutions, agreed by members of the European Regions Airline Association (ERA) at today’s AGM in Rome, raise serious concerns about the threat to regional air links, jobs, economic investment and Europe's ability to compete on a global stage should plans by Europe’s Regulators for airport slots, emissions trading and VAT on air fares go ahead.

In the First Resolution, regarding possible revisions to the EU slot allocation Regulation and the introduction of market mechanisms for the sale and purchase of slots, ERA members believe strongly that replacing smaller aircraft with larger ones will not ease congestion and increase mobility for Europe's citizens. Members express concern that the EC’s study has not taken account of the severe long-term damage to the connectivity and mobility of European citizens that such changes to the Regulation could impose.

Members call on the European Parliament and European Council to intervene to prevent the European Commission from publishing any proposal for a major revision that is based on the EC study. It is more important to address the underlying problem which is the lack of adequate capacity at Europe's larger airports.

The Second Resolution seeks to ensure that the European aviation industry is not competitively disadvantaged by the forthcoming EU Emissions Trading Scheme, following growing international unease over its implementation. Members call for the suspension of the EU ETS for all carriers in 2012 until existing disputes can be reconciled or until the International Civil Aviation Organisation (ICAO) has had time to develop a climate protection scheme that could be applied world-wide.

The Third and final Resolution, voices members' concerns on the potential application of VAT to international air services within the EU. International air services are currently exempt from national taxes in order to ensure fair competition between air carriers based in different States. Aviation already pays significant revenues to governments via direct taxes levied on the industry and VAT is already payable on many domestic air services in the EU.

In addition to contravening existing international agreements on taxation, the application of VAT on air fares would drive up the cost of air travel in Europe; distort competition between carriers as well as with other modes of transport and would decrease Europe's global competitiveness.

ERA Director General, Mike Ambrose said: “All three Resolutions share common themes, namely urgent pleas for Europe’s law-makers and policy-makers to:

• recognise intra-European air transport as an economic enabler for Europe which requires support to sustain essential growth
• undertake proper impact assessments to determine the full effects of proposed changes, and
• ensure that the competitiveness of intra-European airlines is not disadvantaged compared with non-EU airlines or other transport modes.”

Copies of all three Resolutions are available here. 

                                                                               ENDS