The European regional airline industry has once again beaten all records, with this year's European Regions Airline Association (ERA) meeting in Hanover, Germany, reporting double digit growth in passenger traffic, re-equipment by carriers with new regional jet aircraft and reasonable profit margins.

The health of the regionals is traceable to several factors - but the liberalisation of the European air transport industry is perhaps the most significant and main contributor to the development of the hub and spoke network that so benefits the regional type of operation. New airlines have spawned as a result, and, in the fertile environment in which they have found themselves, many have prospered.

Europe, it seems, has become nearly as dynamic as the USA in its ability to create and nurture the conditions for success. But the ability to sustain such conditions for continued growth is worrying the ERA as the prospect of a recession, combined with the continued inefficiencies in European aviation and the negative impact of new environmental policies, prepare to bite. It is the impact of the latter issues rather than the recession which ERA fears most.

Part of the concern comes from the dramatic shift to regional jets bringing shorter travel times over longer ranges, in more comfort and with greater passenger appeal. The manufacturers' almost unseemly rush to propose solutions to the perceived need for 80/90-seaters is further evidence of the new and growing demand for jets. Yet, although the suppliers are doing their utmost to make the purchase and operating costs of their aircraft comparable to those of turboprops, regional jets will continue to be more expensive to buy and operate. That said, regional airline operators have little choice but to invest in them to keep up with market demand. For those in good shape, and using the aircraft on routes where load factors are high enough to justify the investment, there is little to worry about. They will be better able to survive the hazards that the ERA sees ahead. But the outlook for those regionals which are operating on leaner profit margins may be more worrying. The fact is that Europe remains the most expensive area in the world in which to operate a commercial aircraft. High airport handling and air traffic control charges, taxes and social costs are only a few of the reasons for that.

Add to these the fact that the industry is now facing its worst delay crisis since 1994 and the ERA's anxiety is understandable. The delays are the direct result of the failure by Europe's governments to fully harmonise their still disparate national air traffic control systems to create one single, efficient operating system across the continent. This problem is further compounded by the failure of Europe's airports to get their act together to implement existing recommendations on ways in which they could improve their efficiency and increase their capacity.

As if that were not enough, the European Commission is now also considering the introduction of tough new measures, including a kerosene tax, to penalise the polluters. Not surprisingly, the regional airlines are complaining bitterly that such a tax would be unfair. The long life of an aircraft, they argue, makes it impossible to reduce emissions until it is replaced - and, with the fleet renewal programme now taking place that means anything up to 20 years, during which the airlines may be penalised for operating aircraft that were the best available when they ordered them. Europe's regionals need to be aware of the dangers and to support the ERA in its largely unsuccessful efforts so far to knock on the doors of the Brussels decision-makers to get them to listen.

Given the excellent record of the industry in improving its environmental act when compared with that of motor vehicles, it has good reason to demand that it should be treated as a special case in the forthcoming round of environmental rulemaking. Easing the regionals' path in contributing to the development of a modern and efficient European air transport network should be one of the main planks of the EC's drive for an advanced, integrated transport system in Europe. Finding more ways of stunting the growth of Europe's regional airline industry and affecting its long term health should not be on the agenda.

Source: Flight International