Europe’s air transport competitiveness is under threat from rising costs, regulatory burdens and infrastructure inefficiencies, IATA’s Regional Vice President for Europe, Rafael Schvartzman, warned during a media briefing at the IATA AGM in New Delhi. He emphasised that the aviation industry, which supports 15 million jobs and contributes $1.2 trillion to European GDP, is being weighed down by political decisions that increase costs for airlines. With a highly price-sensitive market and limited product differentiation, even minor increases in operating costs can depress demand and make routes economically unviable.
Mr Schvartzman pointed to four main areas impacting competitiveness: outdated consumer regulations, costly sustainability mandates, excessive taxation and inefficient infrastructure. He called for reform of EU261, suggesting changes to compensation thresholds that would reduce cancellations and save costs.
On sustainability, he criticised the lack of transparency and flexibility in SAF regulations and urged harmonisation between ReFuelEU and the EU Emissions Trading Scheme. He argued that current compliance costs are stifling investment in decarbonization efforts.
Taxation was another area of concern, with many European countries increasing passenger taxes, while some, like Sweden, have chosen to scrap them in recognition of their economic drawbacks. Meanwhile, airport and air navigation service provider (ANSP) charges continue to rise, often without corresponding performance improvements. Mr Schvartzman highlighted that ANSP charges are now 25% higher than in 2019, despite fewer flights being managed, and delay targets continue to be missed year after year.
Mr Schvartzman warned that without urgent action to increase capacity and reform regulation, Europe risks falling behind faster-growing regions such as India. He stressed that many of the issues are self-inflicted and can be addressed through sensible policymaking, which would ensure that European aviation remains a driver of prosperity and connectivity in the decades to come.