The reappearance of the former committee members as a group signals the start of a concerted campaign, aimed at speeding up implementation of the 100 recommendations laid down in Expanding Horizons, the report delivered to the Commission by the Comité des Sages in January 1994.
What emerges is a near damning indictment of the lack of actual change in European aviation policy. They acknowledge the political constraints the Commission must work under and are, to some extent, encouraged by the language coming out of Brussels and the studies commissioned. But the wise men want action.
Specific areas of concern are:
1 The lack of any real support to update and integrate Europe's ageing and overstretched aviation infrastructure, particularly the failure to secure any real progress towards a single European air traffic control system;
2 The political and financial bias towards rail;
3 The rush into attempting to gain an external negotiating mandate before a truly common aviation policy is in place;
4 The seeming inconsistency in assessing state aid cases;
5 The prospect of too much intervention creating an ever-growing bureaucracy.
These comments come from five former wise men, who met in Brussels in mid-August to pave the way for a full session of what they have themselves dubbed the 'club of wise men'. The full meeting, planned for early 1996, will bring together 11 of the 12 original committee members to review the progress made by the Commission on implementing the recommendations made in their report of January 1994. René Valladon, chairman of the civil aviation council of the French union Force Ouvrière, has disassociated himself from the report's findings after disagreeing with the recommendations on groundhandling, state aid and social measures.
The interim meeting was designed to 'exercise democratic pressure on the various organs of the European Union before a thorough and critical review of all the issues raised in the report in February next year,' explains the original committee chairman and former Belgian minister of transport Professor Herman de Croo. The four other wise men present at the meeting, to which Airline Business was given exclusive access, were: Pieter Bouw, president of KLM, Joao-Maria Oliveira-Martins, former Portuguese minister of transport, Manfred Schölch, vice chairman of Frankfurt airport, and Guillermo Serrano, Iberia's vice president commercial.
The first real shot across the Commission's bows came from a mini-survey of the five at the beginning of the meeting, which asked them to rate the Commission's progress in implementing the Comité des Sages recommendations on a scale of zero to five, where zero denoted no progress at all. This produced an average grade of two, which in summary meant 'some progress in certain areas but considerable concerns remain overall.'
The five wise men acknowledged that events have conspired against the Commission pursuing a coherent policy since the publication of their report. Not only was there a change of transport commissioner in 1994, but the appointment of a new Commission in 1995 (on a five-year tenure) meant the arrival of a third European transport chief - the incumbent Neil Kinnock - in just over a year.
Furthermore, any clear political direction from member states (if 'clear' is the right modifier to use in the fog of Brussels politics) has also been lacking over the past 18 months. France and Germany, two of the countries which held the six-month rotating EU presidency during that period, both had to contend with national elections as well.
While de Croo is prepared to allow the Commission a bit of slack, he also readily admits that by appointing itself guardian of its own report, the 'club' has a major psychological barrier to overcome. 'Our friends at the Commission are not accustomed to seeing the fathers of a report looking for their child afterwards. Normally when a report is finished, they say amen, put the report on the shelf and say how happy they were with a job well done. But this group is interested in following the results and to act in a monitoring role,' he says.
There is unanimous agreement among the five that harmonising Europe's aviation infrastructure must be the Commission's main priority, if it is ever to achieve its aim of creating a truly single European aviation market. The main concern is the effect that high user charges and worsening delays are having on the global competitive position of European airlines.
Serrano points to recent figures from the Association of European Airlines which show 'we are going back to the bad old days' of congestion and delays. And with the high capital costs involved, airlines cannot be expected to meet the financial demands of harmonisation. 'The political willingness to put in place competition should have been matched by the willingness of politicians to fund infrastructure,' he adds.
'The European Union should not compromise on the objective of a single ATC system,' says Bouw, voicing one of the group's main concerns. But he believes it is the lack of political will among member states and not financing that the Commission should work on. Attracting private sector capital for such a project would be 'very, very easy as the pay-back ratio is only two to three years,' he says.
Bouw feels the creation of a single ATC system is beyond the Commission's power with national administrations blocking the way. 'I am not blaming the Commission and as long as this issue is dealt with at the minister of transport level it will not be solved, unless heads of state get involved.'
Schölch worries that the current work on ATC at Commission level will prove counterproductive. 'It is no good just talking about harmonising standards and giving a bit more power to Eurocontrol in Maastricht. I am convinced these activities are designed to defend the old systems.'
There is general agreement that, because of its monopolistic position, the governance structure of any eventual joint system should involve the users, including the airports.
Groundhandling and slot allocation, affected by the national differences in infrastructure, are not surprisingly the two micro-issues singled out by the 'club'. From an airline perspective, Bouw is highly critical of the Commission's forthcoming directive on groundhandling. 'I think the Commission has compromised on this issue too soon,' he says, referring to the need for both air and landside competition at European airports.
Schölch, on the other hand, stresses that the Commission cannot be blamed in the face of strong lobbying efforts from airlines, airports and governments on the groundhandling issue. 'They came under heavy mortar fire,' he explains. Moreover, the intervention of the European Parliament further slowed the legislative process down, while member states were unsure of what position to take on the issue. He points to the dilemma of the German government, which couldn't decide 'whether to take the airlines' or the airports' side.' But he does concede that 'we should have competition where it doesn't do too much damage.'
Schölch is, however, critical about the procedural complexities thrown up by the new groundhandling directive, expressing concern about the amount of extra bureaucracy the Commission is creating.
Serrano has a practical warning from his involvement in liberalising the groundhandling sector in Spain, which should be completed by next year. In practice the process is 'very slow', he warns, because of the wide range of activities covered by the state-run Aena groundhandling company and 'the importance of the social impact.'
With a directive in the works, at least progress has been made in this area, but the Commission gets few plaudits from the wise men.
On slot allocation, the Commission comes in for further criticism for creating controls. 'They are trying to solve the problem at the wrong end: they should focus on improving the use of existing capacity and enhancing capacity for the future. Solving the problem by throwing up a lot of red tape is wrong,' says Bouw. He further argues that pursuing criteria that give new entrants opportunities does not always improve competition, as larger carriers have the fleet mix to use airport capacity more efficiently.
Schölch backs this argument and believes the Commission should leave the 'market to decide for itself' at slot-constrained airports. De Croo suggests a peak period pricing policy for airport charges may help ease the congestion, but Serrano doubts this will be enough. 'Marketing slots along US lines would cause many problems,' he adds.
Slot allocation is undoubtedly a can of worms Brussels may do best to leave alone. But then the creation of further capacity to solve the issue is another area over which the Commission has little control.
Schölch highlights the situation in the German state of Nordrhein-Westphalen, where a red-green coalition has been in power since elections late last year. The new state legislature is pursuing a policy to curtail the growth of capacity at its airports. As a result Düsseldorf has been prevented from using its second runway and Köln/Bonn has had its movements capped near to current levels, leaving little or no room for expansion. Schölch believes Brussels should help create a better public acceptance of air transport.
Even where the Commission has the legal mandate to support air transport - the Trans European Networks programme, aimed at linking the EU's entire infrastructure for transport, telecommunications and energy, is enshrined in the Treaty on European Union - it has itself fallen victim to political expediency.
Oliveira-Martins observes that adequate funding has been granted to the transport sector under the TENs programme, but warns 'the proportion given to the air transport sector is very small.' Under TENs, the Commission has committed to building high-speed rail links throughout the European Union but, says Serrano, has failed to strike a balance in investments across the transport sector.
'There seems to be an idea that trains don't need space, don't make noise and don't use energy,' says de Croo. Schölch agrees that there is 'a strong political inclination to support rail transport' on environmental grounds but warns of the consequences.
He points to the major European hubs, like Frankfurt and Amsterdam, currently building high-speed rail terminals similar to the one that opened last year at Paris/Charles de Gaulle. He surmises that as these faster rail links 'significantly' increase the catchment area of the hub, more capacity will be needed at the airport to match demand.
In turn, secondary airports without rail links, and hence with smaller catchment areas, will become less attractive to carriers and will 'lose the few international connections they have now'. 'So if we do have a European policy in favour of rail, it must also answer the [growth] at the hub airports and give a solution to those airports that will fade out gradually,' Schölch concludes.
Serrano points out that TENs has only put money aside for the development of one European airport: Milan/Malpensa. He further questions the logic of the bias towards rail on economic grounds and highlights the cost of the planned high-speed rail link between Madrid and Barcelona: 'With the interest alone you can fly the two million annual air passengers on the route free of charge.'
Bouw, however, expresses strong support for high-speed rail, both in terms of the strengthening of the continent's economic links and providing 'a positive shift in aviation traffic flows.' But he warns the Commission 'that the investment in rail is not part of an integrated vision.' Oliveira-Martins comes out in support of this argument but worries that airlines will face unfair competition on many intra-European routes because of the subsidies to high-speed rail.
The Kinnock-inspired grab for an external negotiating mandate receives guarded support from the five 'club' members, but there is also general concern about the feasibility of the approach because of the complexities of current European bilateral negotiations.
Although the Commission is currently only pursuing negotiating rights with the US and eastern and central Europe, issues such as how to replace national designation clauses and allocate route rights among Europe's carriers will make progress difficult. The main problems the Commission faces is that member states do not actually share a common aviation policy. And as Schölch points out, the Commission can hardly negotiate with third parties on behalf of the EU without a sound internal market in place.
Serrano questions why the Commission has not taken action against the member states for not incorporating the so-called 'Community clause' - which should replace any reference to national carriers - into bilaterals agreed since the advent of European liberalisation. The involvement of European officials in bilateral negotiations (to ensure Community interests are represented) could smoothe the way towards an external negotiating mandate. But he concedes that bilaterals will become outmoded over the next 'five to 10 years' as the global industry consolidates and open skies between the US and Europe become inevitable.
Bouw believes the only way for the Commission to obtain the mandate is in pursuing the current course of taking control of open skies negotiations: 'If the liberal approach is applied we won't need complicated bilateral discussions.'
The Commission's approach to state aid cases is still a major concern for the five, but the only clear cut criticism that emerged was the Commission's inconsistent stance. Bouw, not surprisingly, still feels the Commission is 'paying lip service to the issue.' He points to the report's recommendation, which was ignored in the Air France case, to publish the independent analysis of any state aid application.
Serrano, on the other hand, currently engaged in Iberia's state aid application, is convinced 'Mr Kinnock is following our [wise men] recommendations very strictly' and assumes Bouw is 'referring to other cases that have already passed through the Commission easily.'
Schölch is sceptical that member states will stick to a commitment towards privatisation after state aid has been granted, especially as it is not enforceable by the Commission. He also believes Brussels should extend its attention to airports, where 'state aids lead to different charges between airports' and where indirect state aids (such as for local infrastructure funding) also affect finances.
The general tone of the meeting was critical of the Commission's progress so far. But all five members are driven by a strong desire to ensure the Commission stays on course to lead the EU into a truly open market by 1997, although in reality a major miracle is needed. They acknowledge the Commission suffers shortcomings because most of the power and all the political will resides with the member states. But this will not prevent them from giving a full assessment on the Commission's progress in implementing their recommendations early next year, driven by the hope that their initial efforts were not completely in vain.
The general tone of the meeting was critical of the Commission's progress so far. But all five members are driven by a strong desire to ensure the Commission stays on course to lead the EU into a truly open market by 1997, although in reality a major miracle is needed. They acknowledge the Commission suffers shortcomings because most of the power and all the political will resides with the member states. But this will not prevent them from giving a full assessment on the Commission's progress in implementing their recommendations early next year, driven by the hope that their initial efforts were not completely in vain.
Source: Airline Business
