1. Transport in Europe The search for mobility

2. Importance of transport in Europe 1 million transport-related enterprises Over 7million jobs Value-added of over €300 bn Almost 30% of energy consumption About 40% of public sector investment

3. Transport Supports all other economic activity An important part of business costs Facilitates trade – important to European integration and SEM Important for other policies –e.g. energy, environment, social and economic cohesion, etc One of only two sectors explicitly in Rome Treaty

4. Transport trends 1970 – personal mobility 17 km per day Late 1990s – 38 km per day 1975-2000 European car ownership levels doubled Result = congestion Congestion costs = 0.5% GDP – will double if present trends continue

5. Road = dominant transport mode –Door-to-door flexibility Rail transport long term decline in transport share – freight and passenger Rail more important in 2004 accession states 2004 enlargement – reinforces need for better transport

6. Modal performance – passengers, EU-15

7. Modal performance – freight, EU-15

8. Freight modal split, 2002

9. Evolution of the Common Transport Policy Pre-SEM – one of most heavily regulated sectors Despite Treaty, transport policy dormant → 1982EP took Council of Ministers to ECJ for failure to fulfil Treaty obligations and won SEM also highlighted need for CTP

10. Developing the CTP The case of road haulage

11. Wide range of transformative measures Market access, e.g, –Mutual recognition of qualifications –Admission to the profession –Removal of quotas –Lifting of cabotage restrictions Tax measures Safety measures –E.g. driving hours

12. Customs controls and regulations –Reduction of formalities Environmental regulations Technical harmonisation –Dimensions, weights, technical characteristics Infrastructure charging?

13. Freeing up of road haulage Facilitates emergence of holistic approach to logistics –Across borders –Across modes Emergence of pan-European distribution strategies and logistics companies Transformational effect on the spatial distribution of economic activity?

14. Developing the CTP The case of airlines

15. Pre-SEM, airline sector Large state monopolies Fares subject to state approval Access to routes tightly controlled Cabotage restrictions No competition and airlines operating at a loss and highly subsidised

16. By 1997, after 3 airline packages: –Freedom to set fares –Full cabotage rights –Any carrier with community licence could serve any international route in Europe State aids less of a problem

17. Problems remain Airport capacity not keeping pace with demand – slot allocation issues Air Traffic control International airline agreements –Since 2002, Commission has right to negotiate airline deals on behalf of EU –Many deals concluded, US proving more difficult nut to crack

18. Changes in airline sector National flag carrier idea declining: –E.g Air France and KLM –End of Sabena Purchase of small airlines as feeders Strategic alliances – international rather than European

19. Low cost carriers – a new business model Not possible without EU liberalisation Originally developed Southwest Airlines following US deregulation Based on driving all cost components down Vulnerable to energy prices, security, etc Some low cost practices spreading to traditional airlines

20. Contrasting models Low cost –Direct sales – Internet –No frills –High plane turnaround: simpler boarding, etc –Regional & secondary airports –Standardised fleet –Higher seating density –Direct flights, short haul, no transfers –Staff incentives Traditional –Multiple sales channels –Full service –Slower turnaround –International airports –Several aircraft types –Lower seating density –Long and short haul, transfers, greater complexity –High basic costs, fewer staff incentives

21. Developing the CTP The case of rail

22. Rail Long term decline in traffic share Mostly heavily subsidised state monopolies Commission sees role for rail to relieve congestion → modal shift as policy objective Prospects for modal shift - low

23. Rail Last mode to experience EU liberalisation –First rail package in force 2003 – opened international freight to competition –Second rail package in force 2004 – safety, interoperability, domestic freight, cabotage, European Rail Agency –Third rail package – proposed 2004 – to open passenger markets and measures re qualifications of drivers