Subscribe to our free, weekly email newsletter!

Air cargo concerns surface in the EU

By Patrick Burnson, Executive Editor
October 10, 2011

Amid the many other worries troubling the Eurozone, comes news that states are falling behind in their commitments to improve the region’s notoriously inefficient air traffic management.

The International Air Transport Association (IATA) has alerted its members to the latest independent Performance Review Body (PRB) report and the draft recommendations from the European Commission, which notes that states are falling behind in their legislated commitments to deliver improvements in operational, financial and environmental operations.

“Everybody agrees that high costs, delays, environmental waste and circuitous routings are not acceptable. But the problems are not going to fix themselves. Airlines have invested in aircraft and technology to operate at the highest levels of efficiency—often times ahead of what ANSPs are capable of. And we are ready to help drive efficiencies further. But it is the responsibility of states to ensure that their air navigation service providers are delivering what is needed,” said Tony Tyler, IATA’s Director General and CEO.

Last year, states committed to improve the cost efficiency of air navigation services by 3.5 percent annually for 2012-2104. At the request of individual states this was reduced from the Performance Review Body’s proposed target of a 4.5 percent annual gain in cost efficiency. “Watering down the targets to 3.5 percent is costing the competitiveness of Europe’s connectivity EUR 1 billion a year. Now because of inaction we are facing a further hit of EUR 256 million. When targets are agreed, state leadership must ensure that they are met. This is not the time for complacency,” said Tyler.

The PRB report shows that 21 of 29 European states failed to make adequate contributions to the cost-efficiency target. According to the PRB report, the 10 air navigation service providers (ANSPs) who are contributing least to the cost reduction targets are: Malta, Cyprus, Estonia, Hungary, Slovakia, Germany, Spain (continental), United Kingdom, Czech Republic and Finland.?The total shortfall is 2.4 percent according to the PRB, which will equate to a total cost of EUR 256 million of unrealized savings for 2012-2014.

“The real story is with the ‘Big Five’ ANSPs – Germany, UK, France, Italy and Spain. Being responsible for 54 percent of the costs of air navigation services in Europe, the success of the performance scheme is dependant on these states meeting their share of the required cost reductions with no shortfall,” said Tyler.

The performance improvement targets are an integral part of the Single European Sky Package II (SES II) approved by the European Union’s Transport Council in March 2009. “The SES cost-efficiency objective is a 50 percent reduction in air traffic management costs by 2020. The latest reports indicate that the ANSPs are hardly achieving cost containment, let alone the needed reductions,” said Tyler. Alongside improving cost efficiency, SES aims to increase airspace capacity by over 70 percent, improve the safety record by a factor of 10 and reduce the effects of air transport on the environment by 10 percent.

The PRB’s report further noted that that six performance plans (Austria, Greece, Poland, Spain, United Kingdom, and FABEC—covering Germany, Belgium, France, Luxembourg, the Netherlands and Switzerland,) do not make adequate contributions to meeting the EU-wide capacity target.

“If the European ANSPs cannot meet modest short-term goals, then there is no chance of meeting the significantly more ambitious but necessary targets that are required for the second phase of the Performance Scheme (2015-19). States and ANSPs need to close the gap and return to course,” said Tyler.

About the Author

Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

While many auto executives expect more industry recalls in 2015 and 2016, just 8 percent use advanced predictive analytics to help prevent, prepare for, and manage recalls, according to a recent online poll from Deloitte.

Purolator white paper highlights common Canadian shipping mistakes. From failing to appreciate the complexity of the customs clearance process to not realizing that Canada recognizes both French and English as its official languages, U.S. businesses frequently misjudge the complexity of shipping to the Canadian market. This often results in mistakes - mistakes that can come with hefty penalties and border clearance delays, and that can result in lingering negative perceptions among Canadian consumers.

At a certain point, it seems like the ongoing truck driver shortage cannot get any worse, right? Well, think again, because of myriad reasons we could well be in the very early innings of a game that is, and continues, to be hard to watch. That was made clear in a report issued by the American Trucking Associations (ATA), entitled “Truck Driver Analysis 2015.”

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.

The average price per gallon for diesel gasoline increased 1.6 cents to $2.492 per gallon, according to data issued by the Department of Energy’s Energy Information Administration (EIA) this week.

Article Topics

Blogs · Air Cargo · Global Logistics · Global · All topics


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA