Discussion of issues not covered by EU legislation

Andrew Kelly

European Regions Airline Association

The Regional view...

The airline associations have been given less than two weeks’ notice of the topic to be presented. Consequently it has not

been possible to prepare coordinated presentations

agreed by all associations. This presentation

represents the views of the European Regions Airline

Association

About ERA

67 airline members 1.8 million flights per year 73 million passengers per year 72 minute average sector time 73 seat average seating capacity 1,100 aircraft 1,300 routes 30 countries across Europe

Are airlines consumer friendly?

We need to be consumer friendly to keep our customers

But consumer friendliness takes many forms

Price Product Route network Loyalty schemes Safety ???

A deregulated market....

Within Europe the market is fully deregulated. This means

the consumer has a choice of product and price the product (and contractual rights) will vary

when things go well and when things go wrong This is what happens in a free market...

What needs to be regulated?

Don’t constrain a free market without a clear justification that regulation actually benefits the consumer

Looking at two examples where the Commission raises the possibility of regulation in its consultation

Seat pitch Cabin baggage

policy

Seat pitch

Regulate or leave the market to decide? Already regulated for safety Constrains the ability of companies to compete

through product Increases the per seat costs raising the price of air

travel For smaller aircraft operators potentially could result in

10% reductions (or greater) in seating capacity and associated operating/safety problems

Does the consumer really benefit overall?

Cabin baggage policies

Regulate or leave the market to decide? Already regulated for safety Constrains the ability of companies to compete

through product Limits the choice for the consumer How do you create a rule that takes account of

different aircraft types – for example, some regional aircraft have no cabin baggage storage space!

Impacts hold baggage policies, airport baggage capacity and security screening

Does the consumer really benefit overall?

“Buyer beware” or “Regulate”

Ensure that the passenger knows what they are buying (for example: seat pitch, baggage allowance, check in rules, additional unavoidable costs, no show policy, on line reservation policies)

Ensure the passenger knows what rights they will receive when things go wrong (for example: mishandled baggage, delays, cancellations, denied boarding, force majeure)

The compromise is better transparency - “BUYER AWARE”

Equality across modes

A key issue for regional airlines competing with high speed railIf travelling by air, EU Regulation 261/2004 provides for unlimited liability for care (meals, hotel accommodation) during “force majeure” eventsIf travelling by rail, the carrier is relieved of any liability for care by EU Regulation 1371/2007 during “force majeure” events

Safety is the 1st right

It is easy to forget that air travel is a safety critical business

A safe journey must remain the fundamental right of every air passenger and crew member

No regulation on passenger rights must ever jeopardise safety

Regulations affect real people

All consumer rights legislation affects consumers and employees

Interference in the market will potentially result in the loss of routes, mobility and jobs

The EC must respect its own rules on better regulation ensuring that the full impact of any proposal is properly assessed before it is proposed

Conclusion

Do we need more regulation? Airlines need to be consumer friendly to attract

business Consumer friendliness takes different forms

including product and price Do we want to limit the choice for consumers?

Leave the market to set the product and price but ensure that the consumer is protected by enabling them to be aware of what they are buying

Do not over-regulate as regulation, by definition, limits personal choice