Where are we in the aviation recovery?

Henrik Hololei

"There have been two stages to the aviation recovery in Europe: before and after February 24. We are living in a totally new reality which will stay with us for a very long time. At the moment it is not possible to evaluate all the effects, especially when the parameters are still very much undefined, and things will probably get worse before they improve."

— Henrik Hololei, Director-General of the European Commission's department for Mobility and Transport (DG MOVE)

Before February 24 the aviation sector was emerging from the effects of the Omicron variant and was meeting the forecasts of a fast recovery. But now, all predictions are much more problematic. I still believe that there is a good chance we are heading for a positive summer season; bookings have been relatively strong and people are still very keen to travel, primarily on intra European and Transatlantic routes. But the impact of the Ukrainian conflict will be particularly heavy on those network carriers with extensive operations in Asia. Recovery in this region, because of the stricter Covid restrictions, has been slower and now that overflying Siberia is not possible there will be even more challenges for them.

They are, however, strong airlines and I hope they will find a way to respond to this new reality.

The Russian market is going to be closed for a very long time and I am pleased to see that our sanctions on aviation are having a significant impact and destroying the Russian aviation industry, which is the least we can do to respond to the unlawful and unprovoked aggression towards Ukraine.

Do you sense there is a new feeling of unity within Europe?

It’s not just Europe – the way the west and all those who share the same values have come together has been remarkable. But of course I deeply regret that it is the aggression against Ukraine which has brought us together.

But it shows how strong we are if we operate in unity. For example, the incredible speed in which we agreed sanctions and policies in support of Ukraine was a positive display of European cooperation and it has definitely bound us more closely together.

If we do reach, quite soon, 2018/19 levels of traffic will we be able to accommodate this level of demand without the delays and disruptions we saw in those years?

I wish I could say “yes” and that we have all learned from the past. I don’t think anybody in the aviation industry would like to see what happened in 2018 and 2019 happen again: long delays, congestion in the air and an inability to provide the most efficient flight paths.

Now is the time to do the necessary structural changes to make sure this does not happen again. In a way, it is the perfect opportunity because capacity pressures are, for the moment, low. But I am not sure enough has been done and I think that there is a general understanding we need to do more. I’m very much encouraged that many new air navigation service provider (ANSP) chief executive officers who have been appointed lately have brought in a much more business-like attitude and really want to bring change at national and European levels.

For us, the most important objective is to reform the Single European Sky (SES) to make sure our airspace will be managed more efficiently, more effectively while reducing carbon (CO2) emissions – which will give the aviation sector the licence to grow. More efficient routes can reduce CO2 emissions by up to 10%. So enabling direct routing – rather than zig-zagging though different blocks of airspace or, even worse, having to fly at lower altitudes and burning more fuel – remains the most effective of the proposed network reforms. This is why strengthening the network approach is absolutely essential, so the network is managed in a collaborative way with all parties acting in the common interest.

"Our most important objective is to reform the Single European Sky to make sure our airspace will be managed more efficiently."

The European Sky should be more than a patchwork of national airspaces; it should be a single entity which consists of different national airspaces all working together. That will require a strong, efficient Network Manager and we do all we can to make them fulfil that role. Digitalisation can also go a long way to tackle the inflexibility we see today and offer better service quality. That is why the Single European Sky reform also aims to build a true European market for data services that will in turn support ANSPs and increase efficiency.

Is there a contradiction between improving airline connectivity and reaching the goals of zero CO₂ emissions?

I think we must do both and I think it is very important that aviation continues to take its responsibility seriously for sustainability, reducing emissions and offering the most environmentally friendly flights to customers. Sustainability is the licence to grow and without that the industry will simply not get the necessary societal acceptance. It is a challenging task and there is no magic wand, no one solution but a combination of different solutions, the so-called “basket of measures”: the development of SES, more efficient flying, market-based measures (such as the Carbon Offsetting and Reduction Scheme for International Aviation or CORSIA) – and more modern and fuel-efficient engines and aircraft designs. But the single most important measure will be the deployment of sustainable aviation fuels by 2050, which will bring about the reduction of two-thirds of all aviation emissions.

The next years are crucial to ensure we get production up and running. We are now putting a lot of pressure on fuel producers together with the uptake obligation for airlines. Industry and regulators recognise we need to deliver on sustainable aviation fuels if we are going to make a significant difference on environmental performance.

There are a number of related issues that need to be discussed – we need to make sure that we maintain a level playing field in terms of third countries, for example. But I think these are good discussions to have and through these the best solutions will be achieved.

How do you persuade ANSPs to become more digitally orientated and integrated?

I’ve visited a number of ANSPs and I’ve always been impressed by their focus on digital solutions and their work to find ways to be more efficient. This is not going to be a cheap exercise but it will allow us to reap the benefits in the medium and long term.

The SES performance and charging scheme is a very important component in the wider framework to make sure that the ANSPs adopt state-of-the-art technologies, including the modern ATM systems enabling SESAR functionalities. And the scheme itself helps to complement the SESAR programme and I’m very happy to see that SESAR 3 has been launched. When Member States adopt performance plans they need to demonstrate their investments in technology are compatible with SESAR solutions, bringing true benefits to airspace users.

In certain cases the rules allow ANSPs to recover initial costs for restructuring where the transition to new technology promises true cost reductions. In future, ATM data services and operational awareness will both improve. There will be new ATM efficiencies through effective cross-border sharing of operational data; today we are not realising the entire benefits from the added value of cross-border cooperation. The performance scheme already enables the recovery of operational costs for ANSPs who are willing to pioneer such solutions or seek cross-border synergies by outsourcing services.

The SESAR programme, faster deployment of new technologies and better cooperation will help to make a difference. We can use the performance scheme for this and better cooperation will help alongside a strong role for the Network Manager and Deployment Manager.

How do we ensure ANSPs can properly finance long-term programmes while being able to flexibly adjust to the needs of the market?

There’s always room for improvement and we should look at ways to improve the existing system.

Development and operation of ATM infrastructure is principally funded by the users of the system and that is not unique when it comes to funding monopoly transport infrastructure. I don’t think there is going to be a radical change to this.

It is important that when we face the challenges of volatility in demand for ATM services that our framework provides the necessary flexibility to respond.

SES reform will require the introduction of new capabilities for scalability, up and down. During the Covid pandemic we saw that with the dramatic drop in traffic we had a problem of being able to scale down – in the same way we had the problem of scaling up in the previous years to meet the demand.

The general legal framework within the European Union provides us with a number of options – for example, Member States can bring relief to user charges in several ways through funding, grants and equity capital injections. Almost all European ANSPs are State owned. Member States can also reduce or renounce their capital investments in ANSPs and can reduce costs by not charging for airspace user fees. These are the options already available. We are open to continue discussing the advantages and disadvantages of alternative funding structures. These discussions should not only focus on the narrow interests of airspace users but also on how alternatives can make sure that our critical ATM infrastructure continues to receive sufficient funds in a way that is scalable and adapts to changing market conditions.

But safety must be at the centre of everything we do and there must be no compromises on this. We need to understand that the world around us is very volatile and we are facing new challenges. I don’t think there is going to be a need for a fundamental overhaul but rather ensure that the system and the framework we have is fit for purpose.

Another new challenge is adapting airspace management operational and regulatory frameworks to new airspace users, such as drones, air taxis and space tourist vehicles.

It’s great to have new challenges. We are facing a big change in aviation in defining airspace management in much wider terms than before. We are going to have much more activity in both lower altitude and upper airspace areas, with the arrival of drones, eVTOLs, airships, supersonic and hypersonic platforms, trans-atmospheric and sub orbital vehicles.

Our major challenge is to ensure these operate to the maximum possible levels of safety within an agreed solid framework.

These are substantially different from traditional aircraft and operations, based on current ATM systems. But they need to function being fully integrated to the existing systems. And new entrants will operate across the boundaries of international regulations, managed by bodies such as ICAO. We always need to be one step ahead while understanding these new developments will create political and legal complexities for States which will need to be addressed ideally at speed.

The EU has already taken a proactive role in ensuring that ICAO coordinates these activities in an effective manner. We have also done a lot in Europe to cater for these new airspace users’ needs. We have created the concept of “U-Space”, a European approach to UAS traffic management (UTM) based on the fact that U-Space services, unlike classic ATM, will rely on digital services and automation of key functions designed to support safe, secure and efficient access to the U-Space for a large number of drones. It is crucial that future policies at the EU and international levels ensure coordination and cooperation between air traffic management and space traffic management services.

With U-Space we have been able to develop the most sophisticated safety framework for UAVs and drones. We have many requests from other parts of the world for organisations to learn from what we have developed here and this shows that the choices we made years ago have been the right ones. We have invested in this new technology much earlier and faster than many others.

I take a lot of pride that Europe has been here showing the way to the rest of the world. We are now working on the Drone Strategy 2.0 and the drone leaders’ group has been working very efficiently together to make ourselves ready for the challenges – or rather opportunities – of the future. Stay tuned.

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