Airlines Urge EU to Boost Competitiveness

BRUSSELS—The chief executives of Europe's five largest airlines on Wednesday set aside their differences and urged the European Union to promote the industry's competitiveness by lowering costs for passengers and carriers as part of the bloc's new aviation strategy being hammered out this year.

The CEOs of Air France-KLM SA, EasyJet PLC, Deutsche Lufthansa AG, Ryanair Holdings PLC and British Airways' parent, International Airlines Group SA, said they would establish a new association this fall to push the European Commission—the bloc's executive body—to remove passenger taxes, lower airport costs and adopt measures to stem damage from air-traffic control strikes.

The new strategy means that "the airlines need a unified voice because it has been somewhat disparate in recent years," said Ryanair CEO Michael O'Leary.

The EU last week completed public consultations over the new strategy, which covers issues ranging from airport security, air-traffic control to market liberalization.

A spokesman for the commission said it had received about 280 contributions and would publish a report as soon as they were assessed.

The CEOs called for reduced passenger taxes and lower costs at EU airports. High airport costs were destroying the airlines' competitiveness, they said.

In addition, the airlines said the EU should put in place measures that would mitigate the damaging effects of industrial action by air-traffic controllers, which has led to more than 3,000 flight cancellations this year.

They suggest allowing airlines to overfly airports hit by strikes or encourage arbitration with air-traffic controller representatives.

"We're not trying to outlaw strikes...but put in place some first-step measures so that strikes are not the first club in the golf bag they reach for," said Mr. O'Leary.

The executives said their joint future meetings would focus on promoting their shared views, rather than areas where they disagree, such as over the role of Middle East carriers in Europe.

"We do not agree on [the issue of] Gulf carriers, we will not deal with that here, it is something we will deal with individually," said Air France CEO Alexandre de Juniac.

Air France and Lufthansa argue that Middle East carriers have benefited from state aid that has distorted competition. Franco-Dutch and German carriers are pressing the commission to restrict the growth of those Gulf airlines in Europe.

By contrast, IAG CEO Willie Walsh has long championed greater liberalization in aviation markets even before Qatar Airways this year took a 10% stake in the European airline group, making it its largest shareholder.

"We are competitors so you shouldn't expect us to agree on every issue," Mr. Walsh said.

The five airlines, which in total fly around 420 million passengers each year, said the association would also be open to all other European carriers.

Write to Natalia Drozdiak at [e-mail]

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