1. European Low Fares Airlines Association European Low Fares Airline Association EU Regulations: a threat for regional airports and low fares airlines? John Hanlon - Secretary General, ELFAA Assembly of European Regions Conference Poznan, 11-12 September 2007

2. European Low Fares Airlines Association About ELFAA Airport Charges Directive Emissions Trading Scheme Over-regulation by Member States Social benefits of low fare growth OUTLINE

3. European Low Fares Airlines Association ELFAA today 10 airline members and several associate members (manufacturers, airports, etc.) Over 106 million passengers between July 2006 and June 2007 Almost 500 state-of-the-art environmentally friendly aircraft Representing members in key industry bodies at the EU level and active involvement in all matters affecting low fares airline sector

4. European Low Fares Airlines Association Origin of Low Fares Airlines (LFAs) Born of EU liberalisation of air transport market Window created by previously very high fares in Europe by traditional carriers Business model eliminated complexity Strong pressure by LFAs on internal costs enabled significant fare reductions As result, LFAs now account for c. 30% of scheduled intra-European traffic

5. European Low Fares Airlines Association Overview of LFA Business Model Operate mainly from secondary / regional airports Fast turnarounds Direct point-to-point flights Standardised fleet High seating density aircraft Direct bookings via web or call centres Lower airport charges Less air traffic control-related delays Better fleet utilisation Lower complexity Higher capacity utilisation Simpler integration of flight and maintenance staff Lower maintenance and training costs High capacity utilisation Low distribution costs

6. European Low Fares Airlines Association Source: Analystenreports, Unternehmensinformationen, Monitor Group Analysis; 2005-2006 – ELFAA analysis Growth of LFAs

7. European Low Fares Airlines Association Benefits to regions brought about by LFAs Direct services that were previously non-existent Further expansion of regional airports Creation / further development of tourism areas and regions Increased investment Creation of local employment

8. European Low Fares Airlines Association Airport Charges Directive –ELFAA supports the EC’s proposal for an airport charges directive, in order to prevent certain monopoly airports from imposing excessive charges on airlines and passengers. –ELFAA disagrees with the EC’s proposal to include over 160 airports to be regulated (those airports which carry over 1 million passengers per year). –The focus should only be on a limited number of monopoly airports, where regulation is actually needed. –Where possible, Competition, not regulation, should determine the future of Europe’s airports. –ELFAA suggests that a market test should be used, in order to determine whether a particular airport should be regulated or not.

9. European Low Fares Airlines Association Aviation currently contributes just 2% of total EU CO2 emissions ELFAA members: –Use fuel efficient quiet aircraft –Have a low average fleet age –Have the highest seat configuration and high load factors, therefore giving lowest fuel burn per passenger. –Eliminate millions of road miles by operating from regional airports ELFAA is still supportive of the EU ETS, provided that it is properly designed. Emissions Trading Scheme (1/2)

10. European Low Fares Airlines Association A properly designed ETS should: –Incentivise the most environmentally efficient aircraft –Allow for the economic impact to be affordable –Not discriminate between sectors ELFAA calling for the ETS design to include: –The widest possible scope –A single commencement date –CO2 emissions only –Benchmarking to be used to allocate allowances –Allocation of allowances and administration at EU level Emissions Trading Scheme (2/2)

11. European Low Fares Airlines Association Italian Aviation Authority ENAC working towards restricting growth at Ciampino Airport, with possible objective of transferring all operations to Fiumicino. Italian Administration prefers to restrict international travel to/from Italy to Milan Malpensa and Roma Fiumicino only. Whilst such action will be helpful towards the inefficient, terminally-ill national carrier Alitalia, the Italian regions and secondary airports will be severely harmed. Contrary to the Lisbon Agenda Contrary to EU liberalisation of air travel market Over-regulation by Member States

12. European Low Fares Airlines Association Social Benefits of low fare growth (1/2) Contention that employment conditions deteriorated since liberalisation Wrongly attributed to increased competition EU conducting a study with ECORYS to evaluate employment trends and conditions since liberalisation ELFAA feels this study is insufficiently focused on the regions

13. European Low Fares Airlines Association Social Benefits of low fare growth (2/2) ELFAA considering commissioning its own study, focusing specifically on regions Areas of focus: –Employment including concessions, catering, etc –Direct / induced –Benefits to regional airports –Benefits to regions ELFAA invites participation in and support for this study by FARE and AER.

14. European Low Fares Airlines Association ELFAA At the forefront of lobbying to safeguard interests of regions and regional airports in the aviation regulation ELFAA would welcome regional airports and regions as Associate members of ELFAA To further demonstrate to regulators our cohesion on behalf of regions Low fare Associate membership Please help us defend the interests of the regions

15. European Low Fares Airlines Association Thank you! Please visit: www.elfaa.com and subscribe to our mailing list