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Siim Kallas

Vice-President and Commissioner for Transport

European aviation: challenges, cooperation and the way ahead

Aviation Leadership Summit - Raffles City Convention Centre

Singapore, 13 February 2012

Minister, ladies and gentlemen, distinguished guests,

It is a pleasure to be in Singapore and a great honour to address this distinguished gathering of the world aviation community. You have kindly asked me to speak over lunch, so I will try to be brief. Singapore is often talked about as both the testing ground and the perfect example of globalisation. The same is true of the EU, but for very different reasons. Singapore's version of globalisation is as a key Asian crossroads. Nothing illustrates this better than the aviation sector. Changi Airport is one of the best and busiest airports in the world, regularly breaking its own records for passenger traffic and aircraft movements. We also see that Singapore Airlines is doing rather well.

Singapore has successfully ridden the huge wave of change in the airline market over the last few decades. Global traffic has increased by 56% during the past eight years: Singapore has exceeded that figure, with 89% growth over the same period. This comes as no surprise. Singapore represents an attractive and safe transport gateway to southeast Asia and beyond. It is a true hub for the region. It is also clear that the continued expansion of the ASEAN market will be a key driver of future growth in global air traffic, for both passengers and cargo. So you can understand that we are following ASEAN's moves to build a single regional aviation market by 2015 with much interest.

Naturally, we are ready to share our own experience of creating what we think is the world's largest and most successful example of regional market integration and liberalisation in air transport. Europe, too, recognises the essentially global nature of the business we are in:

  • we have left behind the stagnation of our segregated national markets;

  • we have built a vibrant and competitive single market;

  • and we have a successful aviation sector that competes daily on a global scale, based on a strong home market of 500 million people. There is now far more competition: between 1992 and 2010, just as an example, the number of intra-EU routes with more than two carriers increased by 415%

But we want to go further, to consolidate and extend the benefits from our single market to a wider European common aviation area – to 50 countries and a billion people. This will be good for Europe – but also good for all carriers, including of course Asian carriers. It will drive down costs and make it easier to "do business", based on common rules and standards.

This is my first point: we should never forget that aviation is a global business. And a business that is still growing fast, despite five difficult years for the world economy. This success is largely thanks to the development of strong and competitive regional structures. Of course, airlines in Europe are going through tough times at the moment. At the European Commission, we are working hard to restore Europe's competitiveness and growth.

How are we are doing this?

By making sure that our ambitious Single European Sky project is implemented. This means sorting out Europe's fragmented and antiquated system of air traffic control. Aviation needs efficient and advanced air traffic management capable of providing fair value and seamless service to airlines. We are also acting to raise competition and quality of service at Europe's airports with our recent proposals on slots, groundhandling and noise. Air traffic is expected to double by 2030: this extra demand will weigh heavily on already stretched capacity, both in the air and on the ground. It also poses a challenge to the safety, efficiency and competitiveness of the entire air transport chain.

Ladies and gentlemen,

I hope you would agree that Europe is a strong and consistent leader in tackling three major challenges for aviation: safety, security and the environment. Some in the aviation world might tell you this is part of a move to over-regulate a vibrant sector, with the EU pretending to be the regulator of the whole world.

Firstly, this is not our intention. Secondly, these issues are not going to go away. And for good reason: our strong focus on safety, and more recently on security, has helped to stabilise public confidence in aviation after some major challenges – notably 9/11. It is encouraging to see that other countries now follow Europe's approach on safety. On the environment, it is a real challenge to protect our planet at the same time as we promote growth in aviation. We live in a world where 20% of global exports by value now move by air. So it is important to find sustainable ways of maintaining growth in aviation. As air travel becomes cheaper, emissions from world aviation are increasing fast. A passenger taking a London–New York return flight today generates roughly the same amount of emissions as the average person in the EU generates by heating their home for an entire year.

Since these are challenges faced by the entire aviation community, international cooperation is essential. Let me say one thing very clearly on the famous question of ETS: this issue must be tackled, and solved, in ICAO. Of course, Europe wants to see a multilateral solution. And we are ready to battle for that outcome.

So this is my second point, that Europe still has a lot to offer. While we have willingly struck a 'lone path' in tackling some of the difficult regulatory challenges that we will all ultimately face, we would still prefer multilateral solutions.

And my third point: as we move forward to address these and many other challenges, we have to keep markets open.

As I said at the start, aviation is a global business so certain situations should be avoided. These include:

  • national restrictions in the form of ownership and control limitations which give no security for the "protected airline" other than to cut off its access to global financial markets;

  • artificially conceived national airspaces that make no sense for traffic flows – and just add billions to air traffic control costs;

  • distortions to competition in places where there is no level-playing field and no transparency.

Ladies and gentlemen,

We have not only a difficult agenda, in terms of safeguarding aviation's prospects for sustainable growth. We also have a difficult political agenda. In Europe, we are ready for this challenge. In Singapore, I see a ready and willing partner. I am very pleased that during my visit we will be signing a memorandum of understanding on future aviation safety cooperation and a letter of intent on cooperation in air traffic management. I am very confident that these agreements will further strengthen our partnership and aviation cooperation and that more agreements will soon follow.

We should also explore the possibility of bloc-to-bloc agreements between the EU and ASEAN. And perhaps now is therefore the time to raise our aviation relationship to the next level.Let us look for further ways to strengthen the connections between our markets.

With these aims in mind, today's leadership summit is an excellent opportunity to renew old acquaintances and forge new ones. I wish you a useful and productive meeting – and enjoy your lunch.

Thank you for your attention.

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