European Regional Growth Slows
Following in the footsteps of their American counterparts European regional growth slowed to a point not seen since 9/11, according to the European Regions Airlines Association (ERA) which convened last week for its general assembly. Passenger growth in the first half grew 3.7 percent, the lowest since 2001 when growth was only 3.4 percent. The first half growth compares to the 7.7 percent growth experienced in the year-ago period.
Revenue passenger kilometer growth also dropped from 9.7 percent for the first half of 2007 to 6.0 percent over the same period in 2008. However, with a slightly slower growth in capacity of 5.6 percent, compared to 7.5 percent in 2007, ERA airlines still reported a slight rise in average scheduled passenger load factor; 63.8 percent was reported for the first six months of 2008 compared to 63.3 percent for the same period in 2007.
Despite these small increases in growth, yields continue to decrease and airlines will find it difficult to absorb the substantial increases in fuel costs, said the organization. Fuel costs alone for the Q2 2008 have risen by 41 percent compared to the same quarter last year. Fuel costs now represent 13 percent of total costs.
“European regional airlines continue to grow at double the rate of major airlines worldwide,” said Mike Ambrose, director general of ERA. “However, this does not mean that European regulators have carte blanche to impose additional and unnecessary costs and burdens on an industry that is already crippled with high fuel prices and slowing demand.
“The industry is doing everything it can to save fuel and to undertake research into sustainable algae-based biofuels, but such advances do not occur overnight,” he continued. “Regulators should be helping us to undertake these initiatives. Instead they are continuing to pursue the imposition of additional taxes and regulatory burdens as a result of poor decision-making processes. ERA will continue to lobby for better regulation procedures until the European Commission and European Parliament recognise the need to introduce reforms to enable them to better understand the full effects of legislative initiatives.”

ERA Adds VLM to Membership
ERA welcomed Belgian carrier, VLM Airlines into membership of the association.
Established in 1993 with a scheduled non-stop service between Antwerp and London City, VLM Airlines today employs 450 people and operates a fleet of 18 Fokker 50 aircraft, primarily out of its London City hub. In 2007, the airline carried over 745,000 passengers and made a net profit of EUR 3.6 million.
"After six years of absence, VLM Airlines is delighted to rejoin ERA,” said VLM Airlines CEO Johan Vanneste. “They clearly have expertise in several important fields to offer to their members, and their lobbying power with the EU and other institutions is of great importance to all of us in these challenging times for commercial aviation."