European airline passenger protection rules have been branded a “confusing mess” by the head of Iata.
Admitting that EU regulation 261 was a competitive disadvantage to airlines, the aviation body’s chief executive and director general Tony Tyler claimed that it also failed to protect passengers.
“Its draconian measures penalise airlines for things beyond their control,” he argued. “It injects regulation in an area where market forces could do a better job.
“The constant widening of its application as interpreted by courts continuously makes the ‘competitive disadvantage’ worse. And, it competes – even conflicts – with some 60 other passenger rights regimes around the world. From the passenger’s perspective, all this protection is just a confusing mess.”
Calling on European governments and regulators to bolster European competitiveness with measures focusing on improved global connectivity, Tyler said: “Experience teaches that we achieve the best results on regulation when governments focus on real, not imagined, problems and take full advantage of expert advice and consultation.
“It is also important to calibrate regulation and taxation carefully to promote global connectivity and ensure that the costs imposed by regulation do not exceed its benefits. Finally, regulation should respect global standards wherever they exist.”
Addressing a European aviation summit in Vienna, Tyler said: “Among the biggest obstacles faced by European airlines are the competitive disadvantages placed in their way by Europe’s governments.
“The region’s airlines are over-taxed and onerously regulated. Moreover, they suffer from a chronically mismanaged air traffic management system, insufficient airport capacity and infrastructure costs that are simply too expensive. It’s time to do something about it.
Tyler claimed that governments in Europe will collect almost $40 billion in taxes from airlines and passengers – more than double the taxes collected in the Asia-Pacific region.
“Many governments there value aviation more for the long-term economic value that the industry makes possible, than for short-term tax receipts,” said Tyler.
“Some European governments are beginning to understand the economic damage that excessive taxation on connectivity can do. The Irish government, for example, removed a departure tax in order to stimulate the economic benefits of connectivity.”
European airlines expect to realise a post-tax net profit of $2.8 billion this year, for an average net profit margin of just 1.3% or $3.23 per passenger, according to Iata.
By comparison, North American airlines are expected to earn about $11.09 per passenger.