lessons from the current crisis – EURACTIV.com
EU countries must learn from the global aviation crisis caused by the pandemic. An important lesson is that the emphasis on internal market rules paralyzes the competitiveness of our airlines, says Pedro Nuno Santos.
Pedro Nuno Santos is the Minister of Infrastructure and Housing of Portugal, who currently holds the rotating Presidency of the Council of the EU.
The COVID-19 crisis has had a profound and lasting impact on the aviation sector. Last year the industry activity index fell by more than 50% and we saw our airlines grounded completely for several months.
Fortunately, EU authorities and all national governments acted swiftly and in a coordinated fashion, creating a temporary framework for state aid due to the impact of COVID-19. In a few months, EU members were able to deploy several financial and economic instruments to economically support the aviation sector.
Nonetheless, several countries faced several obstacles in completing the aid program for supported airlines, many of them anchored in rules anchored in EU competition law.
This happened at the same time as other airlines, in countries outside the European Union – the example of the United States is well known – were helped by States not subject to strict competition rules.
I think there are lessons to be learned from this aviation crisis.
The first lesson is that we need to use this flexible response at an exceptional time like this for the industry to rethink competition policy and state aid rules.
If the aviation sector is strategic for each of the economies of our Member States, then its importance should give Member States more leeway to intervene in a way that does not call into question the centrality of this sector in European economies .
The other lesson is that when most of our political efforts are focused on disciplining EU members and enforcing the functioning of the internal market, we end up putting European airlines at an objective disadvantage by compared to airlines from the rest of the world.
Since the aviation market is global – and many airlines in Europe that have received state aid compete with other traditional carriers that fly to and from Europe to other continents – the fact that non-European countries use monetary and budgetary policies to support their airlines means that our internal competition rules end up harming the external competitiveness of our airlines and conceding EU market shares to non-European companies.
The aviation sector is strategic for European economies. It creates well-paying jobs, strengthens economic relations and promotes multicultural dialogue. Our airlines guarantee connectivity between Member States and the mobility of millions of workers and tourists.
These externalities are not fully taken into account in the financial balances of individual airlines and should not be regulated solely by current European competition policies. We should better discuss how we can protect the positive externalities produced by airlines, even if this leads us to rethink how some competition rules work.
If the creation of the European internal market, with its state aid competition rules, was necessary in an initial phase of the European Union, today we must focus on the competition with which the European economy is facing with the rest of the world. And for that, we need competition rules and state aid that do not hamper the growth and resilience of European businesses.