International aviation conference 2010
Contents
Gunther Sollinger                                                     Finding the adequate strategy for Northern ...
International aviation conference 2010




                    Günther Sollinger is a Senior Vice President in Air Baltic,...
Keynote speech                               International aviation conference 2010




                                Da...
International aviation conference 2010




                                  Date of Birth                                ...
Anrijs Matiss / Presentation                        International aviation conference 2010




                           ...
Anrijs Matiss / Presentation                        International aviation conference 2010




From the ministry’s point o...
Anrijs Matiss / Presentation                      International aviation conference 2010




CHALLENGES
Economic uncertain...
Anrijs Matiss / Presentation   International aviation conference 2010




Environmental issues; emission trading
The emiss...
Global trends in the aviation industry   International aviation conference 2010




                              Andrew G...
Andrew Gordon / Presentation                       International aviation conference 2010




                            ...
Andrew Gordon / Presentation                                 International aviation conference 2010




Agenda            ...
Andrew Gordon / Presentation        International aviation conference 2010




Recovery tracking                          ...
Andrew Gordon / Presentation             International aviation conference 2010




                                      ...
Andrew Gordon / Presentation                                                  International aviation conference 2010




R...
Andrew Gordon / Presentation                                       International aviation conference 2010




    Air trav...
Andrew Gordon / Presentation                    International aviation conference 2010




Agenda                         ...
Andrew Gordon / Presentation                                                                                              ...
Andrew Gordon / Presentation                          International aviation conference 2010




Large potential to increa...
Andrew Gordon / Presentation                                                 International aviation conference 2010




  ...
Andrew Gordon / Presentation                                              International aviation conference 2010




  Gre...
Andrew Gordon / Presentation                                   International aviation conference 2010




Single Aisles ge...
Andrew Gordon / Presentation                                              International aviation conference 2010




A net...
Andrew Gordon / Presentation                                                    International aviation conference 2010



...
Andrew Gordon / Presentation                             International aviation conference 2010




The main drivers of to...
Andrew Gordon / Presentation                            International aviation conference 2010




Asia to lead in world t...
Andrew Gordon / Presentation                                     International aviation conference 2010




Agenda        ...
Andrew Gordon / Presentation                        International aviation conference 2010




  Expanding international n...
Andrew Gordon / Presentation   International aviation conference 2010




  No coincidence airBaltic has grown its presenc...
Extending EU`s aviation frontiers   International aviation conference 2010




                                           ...
Mark Nicklas / Presentation                               International aviation conference 2010




                    ...
Mark Nicklas / Presentation                International aviation conference 2010




                                    ...
Mark Nicklas / Presentation                          International aviation conference 2010




   Unprecedented Challeng...
Mark Nicklas / Presentation                         International aviation conference 2010




     Going Beyond Europe: ...
Mark Nicklas / Presentation               International aviation conference 2010




   Pillar I: “Community Designation”...
Mark Nicklas / Presentation                                                International aviation conference 2010




   ...
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  • presentation with indepth knowledge about the hub-functions in the Baltics and usefull forward looking statements.
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North Hub Riga 2010

  1. 1. International aviation conference 2010
  2. 2. Contents Gunther Sollinger Finding the adequate strategy for Northern airlines Senior Vice President of airBaltic Max Nilov Freelancer, Aviation Consulting Services Welcome speech Nils Ušakovs Challenges of Survival & Prospects for the Future Chairman of the Riga City Council Guenter Seibt General Representative of Air Berlin Anrijs Matīss State Secretary of Ministry of Transport of Republic of Latvia Engine of Growth in the Baltics Bertolt Flick Global Market Forecast 2009 – 2028 President and CEO of airBaltic, Engine of Growth in the Baltics Andrew Gordon Forecast Market Analysis, AIRBUS ¸ ¸.) HAVAS (Havaalanları Yer Hizmetleri A.S Müjdat Yücel Extending EU`s aviation frontiers General Manager of HAVAS ¸ Mark Nicklas Air Transport Agreements & Internal Market of EU Commission BBI-Adapting to customer needs Marjan Schoeke Lithuanian Aviation Sector Head of Airline Marketing of Berlin Airports Agnė Katkutė Civil Aviation Department of Ministry of Transport of Republic of Supporting customers’ success Lithuania Jānis Baļķens CEO of North Hub Services Engine and Environmental Challenges Stephane Auter International Airport Riga Director of International Aero Engines AG, Engine and Environmental Krišjānis Peters Challenges Chairman of the Board of International Airport Riga Challenges facing aviation in the CIS airBaltic in social media Boris Rybak Tero Taskila General Director of Infomost CCO of airBaltic
  3. 3. International aviation conference 2010 Günther Sollinger is a Senior Vice President in Air Baltic, responsible for external affairs. For several years he worked for a major European airline, both in central head office and line functions, covering areas as diverse as network, sales and marketing, project management, station handling and partnership & alliances. He was Area Director responsible for Central- East Europe, as well as country manager for Russia based in Moscow. During the mid-1990 he was directly involved in the start-up of Air Baltic. In 2002 he returned to the airline as Commercial Director, advancing to his present position in 2006. Günther graduated from Uppsala University in Sweden, complementing his education with studies in the USA and in Great Britain. He was a lecturer in government at Stockholm University and the University of Uppsala. Günther has published a number of studies relating to the early history of aviation in both Sweden and in Russia. He is a member of the Historical Society for Science Günther Sollinger Moderator and Technology, Russian Academy of Sciences, and a Corresponding Member of the Academy of Sciences, Aviation and Aeronautics, in Moscow.
  4. 4. Keynote speech International aviation conference 2010 Date of birth: March 2004 – November 2005 08.06.1976 Editor of the News Service of the First Baltic Channel, prepared news releases of Lithuania, Latvia and Estonia; Education: from January 2005 — Editor of the evening news for In 1999 acquired Bachelor’s Degree in Economics at the Lithuania and Estonia. Faculty of Economics and Management of the University of Latvia. Specialization – analytical economics (the In 2004 received the Ciceron Award established by the studies took place within the frames of the Eirofakultāte Latvian Union of Journalists and the University of Latvia (Euro faculty) program). In 2002 acquired the Cand. for the input in journalism. Member of the Board of the oecon degree (M.Sc. in Anglo-Saxon system) at the public organisation «Baltic Forum» Economics Department of the Social Sciences Faculty of the Southern Denmark University. Specialization – In summer 2005 entered into the National Harmony European Integration Issues. Party. In November 2005 he was unanimously elected to the post of the Chairman of the Political Union «Harmony Work Experience: Centre». On 27th November Nils Ušakovs was repeatedly 1998 – 1999 elected to the post of the Chairman of the Board of the Producer, Baltic Division of the Russian TV channel NTV Political Union «Harmony Centre» for two years. He is a naturalised citizen of Latvia. Nils Ušakovs 1999 – 2000 Chairman of Riga City Council Correspondent of LTV News, Latvian Public Television In October 2006 elected to the 9th Saeima (Parliament of Latvia). April 2000 – September 2001 Editor, News and Politics Department, newspaper On 1st July 2009 elected to the post of the Chairman of «Respubļika»; after that till July 2002 — Editor, News and Riga City Council. Politics Department newspaper «Teļegraf» Languages: 2001 – 2004 Russian — native, Host and Editor of the weekly program «Nedēļas tēma» Latvian and English — fluent, (Theme of the week), television channel TV5. Co-producer, German and Danish — basic, Editor and Host of the pre-election show «Krievu Swedish — learning. jautājums» (Russian Question), television channel TV5. «Krievu jautājums» was the first extensive pre-election Hobbies: debate in the Russian language in the history of Latvia. sports — running and cycling.
  5. 5. International aviation conference 2010 Date of Birth March 2004 - March 2006 September 13, 1973, Riga (Latvia) Non-profit organization The Norway – Latvia Business Development Fund Ltd., Holder of the state capital share EDUCATIoN representative 1994 -1996 Riga Technical University, Master of Engineering scince october 2003 – December 2004 Special economics region of Rezekne, Councilor 1991 -1994 Riga Technical University, Bachelor of Engineering scince 1999 -2003 Ministry of Economics of Republic of Latvia, Director of Quality 1991 structural policy and intern market department Riga State Grammar school No.1, secondary education 1999 -2002 4. PERIPHERAL TRAINING CoURSES Non – profit organization Latvian National metrology centre 1993 Standardizations course, Deutsches Institut für Normung Ltd., Authorized Person of Government DIN 1997 - 1999 1995 Ministry of Economics of Republic of Latvia, Deputy director of Quality management, audit course, Det Norske Veritas Quality structural policy and intern market department DNV 1994 -1997 1999 Ministry of Economics of Republic of Latvia, Head of Quality Quality management and internal audit courses, Deutsches structural policy and intern market unit Anrijs Matīss Gesellschaft für Qualitat (DGQ) 1993 -1994 State Secretary of Ministry of 5. WorK exPerience Ministry of Economics of Republic of Latvia, Chief specialist at Transport of Republic of Latvia December 2009 – at present Standardization and Certification department Ministry of Transport of Republic of Latvia, State Secretary 1989 (2 months); 1999 (2 months) January 2008 – December 2009 The Institute of Polymer Mechanics of Latvian Academy of Ministry of Economics of Republic of Latvia, State Sciences, technician Secretary 6. PERIPHERAL INFoRMATIoN June 2003– January 2008 2008 – December 14, 2009 Ministry of Economics of Republic of Latvia, Vice secretary JSC Rīgas Siltums, JSC Latvijas gāze, Holder of the state of state responsible for industrial, business and internal capital shares market questions 2008 - April, 2009 August 2006 – January 2008 Latvijas Standarts Ltd., Latvian National metrology centre Ltd., Latvian National metrology centre Ltd., Member of the Agency of Latvian Guarantee Ltd., Holder of the state capital Board share March 2006 - April 2006 2009 Investment and Development Agency of Latvia, Acting Award from Minister of Economics for the contribution in the Director development of the Ministry
  6. 6. Anrijs Matiss / Presentation International aviation conference 2010 We realized from the very beginning that in such country as Latvia, Excellencies, colleagues, Ladies and Gentlemen! which is located relatively far from the centre of Europe, with no It is an honour and pleasure for me to welcome you in Riga on the railway link to European railway system, to provide connectivity to second North HubRiga conference to discuss issues which are the customers and to ensure economic needs, a rapid development important for the future of the air transport. of aviation was the necessary precondition. It included building up and reconstruction of a new infrastructure and establishing and It is a great opportunity to share views and experience with the then supporting an effective air carrier. key persons and real experts in the air transport field, and I hope it would benefit to all of us and would also allow us to find answers Since 2004, when Latvia became a member of EU and got access to questions which emerge every day with no answers in the to common free air transport market, we have been seeing textbooks. continuous growth of traffic carried by our national airline Airbaltic, and also uninterrupted growth of passenger numbers for Riga The recent natural disaster in Iceland resulted in air traffic chaos airport from mere 700 thousand in 2004, to more than 4 million in Europe and showed explicitly that there is no substitute for air in 2009. Even now, in the period of deep crises in the national transportation in the modern society. economy, a stable performance of Airbaltic and effective use of transit opportunities allows to keep traffic growing.
  7. 7. Anrijs Matiss / Presentation International aviation conference 2010 From the ministry’s point of view it is utmost important to facilitate Results development setting and introducing the right air policy principles. More than 90 direct destinations to/from Riga. That includes helping to set the right strategy goals for the national carrier, ensuring that the infrastructure, and first of all, the More than 4 million passengers in 2009. airport capacity meets the growing traffic demand, the necessary regulations are introduced timely, airport and air navigation Uninterrupted growth of the Riga airport and the Airbaltic traffic up tariffs are just and do not put the excessive burden on carriers, to this day including period of crisis. and bilateral air services agreements with the third countries concerned are concluded. Effective east – west and north - south link .
  8. 8. Anrijs Matiss / Presentation International aviation conference 2010 CHALLENGES Economic uncertainty in Europe, recession in the national economy Action Lack of airport capacity Action Airline attracts more transit traffic including from the non EU countries to compensate shrinking of the domestic market. Building of a new terminal; Government decides to support Riga Ministry facilitates the intergovernmental bilateral negotiations on International Airport and Airbaltic’s common decision to participate air services agreements to support such policy. in a new terminal project. (Recently agreements concluded: with Armenia, Tajikistan, Uzbekistan, Kirgizstan, Turkmenistan, Jordan, Lebanon Bahrain; ongoing negotiations with Iran etc.)
  9. 9. Anrijs Matiss / Presentation International aviation conference 2010 Environmental issues; emission trading The emission trading scheme which is accepted at EU level and supposes to mitigate pollution created by air transport does not create equal conditions for large EU carriers, established long time ago, and the new rapidly growing carriers from the new EU member states. This is particularly important in countries where there is no alternative mode for the air transport. There should be a global decision on limitation of aviation emissions. Regulatory environment supporting development Effective participation in the decision taking in the air transport field in the EU.
  10. 10. Global trends in the aviation industry International aviation conference 2010 Andrew Gordon became Director Market Analysis at Airbus in 2001. In this role he is responsible for facilitating the production of the Airbus Global Market Forecast, which details future demand for all civil aircraft of 50 seats or more. Andy is also accountable for analysis and forecasting of products as diverse as business jets, regional aircraft and military derivatives. Prior to this appointment Andrew worked for a ten- year period for British Aerospace Airbus as part of the Forecasting & Market Evaluation Team, where he was involved in providing analysis for many of the market and product related decisions including the A380 project. In 2001, at the creation of Airbus as a single entity, Andrew moved to Toulouse, to work directly for Airbus in the Market Forecasting & Research Group, now part of the Strategy and Co-operation team. Andrew Gordon Forecast Director of AirBus Andrew Gordon began his career with BAE/Airbus in 1991 and prior to this he worked for one of the UK’s largest banks. Andrew has a Masters Degree in Marketing from the University of the West England. He is married and lives near Toulouse. In his free time he enjoys rambling, golf and is also playing cricket for Toulouse Cricket Club, where he is the Club Secretary.
  11. 11. Andrew Gordon / Presentation International aviation conference 2010 Premium ticket volume and revenue growth Premium Premium revenues volumes Premium revenues (left scale) June 9th 2010, North Hub Riga, International Aviation Conference Andrew Gordon Director Market Analysis Premium volumes (right scale) Source: extract from IATA
  12. 12. Andrew Gordon / Presentation International aviation conference 2010 Agenda The aviation cycle, several cycles impacting in series The last Cycle (s) The recovery Global Market Outlook The Baltic Market Outlook Source: Global Insight, ICAO & IATA
  13. 13. Andrew Gordon / Presentation International aviation conference 2010 Recovery tracking Recovery and the volcano… WORLD ECONOMY WORLD TRADE World real GDP year-over-year quarterly evolution (%) World trade year-over-year quarterly evolution (%) History Forecast History Forecast We are We are here h here h 2007 2008 2009 2010 2007 2008 2009 2010 May WORLD PASSENGER TRAFFIC passenger WORLD FREIGHT TRAFFIC World ASKs year-over-year monthly evolution (%) traffic up World FTKs year-over-year monthly evolution (%) 5.6% April freight traffic t ffi up 24% 2007 2008 2009 2010 2007 2008 2009 2010 Source: Global Insight, OAG, IATA, ATA, AEA, Airbus
  14. 14. Andrew Gordon / Presentation International aviation conference 2010 Passenger traffic above pre-crisis level Could we live without flying? since Oct-2009 ASKs (billion) Ash cloud grounds U.S. produce, fish and parts Source: OAG, Airbus
  15. 15. Andrew Gordon / Presentation International aviation conference 2010 Recovery tracking Traffic recovery anticipated for 2010 US AIRLINES WESTERN EUROPEAN AIRLINES ASKs year-over-year monthly evolution (%) ASKs year-over-year monthly evolution (%) May May passenger traffic down p passengerg traffic up World air traffic growth (%RPKs) 1.7% 1.3% Best case 2007 2008 2009 2010 2007 2008 2009 2010 EMERGING ECONOMIES* AIRLINES REST OF WORLD AIRLINES ASKs year-over-year monthly evolution (%) ASKs year-over-year monthly evolution (%) May May passenger passenger traffic up traffic up 1.2% Worst case 15.3% 15 3% 2007 2008 2009 2010 2011 Estimate (Forecast) (Forecast) 2007 2008 2009 2010 2007 2008 2009 2010 Source: OAG, * 54 emerging economies, Airbus Source: ICAO, Airbus Market Research and Forecasts
  16. 16. Andrew Gordon / Presentation International aviation conference 2010 Air travel has proved to be resilient to external shocks… Air travel remains a growth market 20-year World annual traffic (RPKs - world annual ld l World annual traffic (RPKs - trillions) trillions) traffic growth +38%* 4.7% +36% +36%* ICAO Airbus total traffic GMF 2009 2009 * since 2000 E Source: ICAO, Airbus Source: ICAO, Airbus
  17. 17. Andrew Gordon / Presentation International aviation conference 2010 Agenda The Airbus Global Market Forecast (GMF) 2009 The recovery 20 year aircraft demand f i ft d d forecast, aircraft >19 seats t i ft 19 t Traffic forecast modeling 156 distinct traffic flows Global Market Outlook Detailed study of network evolution including new routes, markets and deregulation hot spots Model the impact of evolving airline models e.g. Low cost carriers The Baltic Market Outlook Fleet build-ups covering >750 passenger airlines, 190 freight carriers Available as a book, interactive pdf and on the web. , p
  18. 18. Andrew Gordon / Presentation International aviation conference 2010 Taking into account key industry drivers Large potential to increase propensity to travel Economics Demographics Networks 10 Seychelles Bahamas • Growth • Population growth • Global cities Cyprus • Emerging markets Barbados Malta Macao UAE Ireland New Zealand • Hubs Maldives • Age profiles Singapore • Cycles St Lucia Bahrain Spain Hong Kong Australia • Disposable income • New routes j Fiji Trinidad Puerto Rico Greece Kuwait Canada UK Qatar USA Sweden Denmark Switzerland Mauritius • Urbanisation • Deregulation France 1 Trips* per capit - 2008 Finland Cape Verde Malaysia Latvia Saudi Arabia Portugal Brunei Italy Germany Belgium South Korea Japan Netherlands Panama Taiwan Samoa Suriname Croatia Estonia Israel Jordan Mexico Czech Rep. 2 trips Hungary per Turkey Slovenia Slovakia capita ta BrazilRussia Poland Equatorial Guinea China 0,1 Algeria Botswana Bosnia India Belarus World average Angola 0.11 trip Nigeria per Bangladesh Lesotho capita Afghanistan 0.05 trip 0,01 per Passengers Airlines Aircraft Iraq Chad capita Niger • Ticket price • Fuel • Seats Speed, utilisation Seats, Speed • Comfort • Range • Frequency, load factor • Origin and destination • Fleet mix • Range 0,001 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 55 000 • Connectivity • Business models • Replacement • Environment • Legislation/taxation • Fleet mix Passengers originating from a particular country 2008 Real GDP per Capita • Environment • Environment Note: GDP in 2005 US$ Source: IATA PaxIS, Global Insight, Airbus
  19. 19. Andrew Gordon / Presentation International aviation conference 2010 Large potential to increase propensity to travel Air transport is still emerging for 85% of the world 10 China Seychelles Bahamas India Barbados Malta Cyprus Macao UAE Ireland Maldives New Zealand Singapore 5.7 Australia Middle East St Lucia Bahrain Spain Hong Kong Canada Qatar UK Switzerland j Fiji Trinidad Greece Sweden Denmark Puerto Rico Kuwait Asia* billion Mauritius France 1 Trips* per capit - 2008 Finland Cape Verde Malaysia Latvia Saudi Arabia Portugal Brunei Italy Germany Belgium South Korea Japan Netherlands Panama Taiwan Samoa Africa people Suriname Croatia Estonia Israel Jordan Mexico Czech Rep. CIS Hungary 2008 Turkey Slovenia Slovakia ta BrazilRussia Poland 0,1 China Algeria Equatorial Guinea Botswana Latvia Latin America India Bosnia Belarus World average Eastern Europe Angola Nigeria Bangladesh Lesotho Afghanistan 0,01 Iraq Chad Niger Western Europe 1 billion 0,001 North America people 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 55 000 Japan p 2008 Passengers originating from a particular country 2008 Real GDP per Capita Note: GDP in 2005 US$ Source: IATA PaxIS, Global Insight, Airbus * Asia excludes India, China and Japan
  20. 20. Andrew Gordon / Presentation International aviation conference 2010 Low Cost Airlines have continued to grow More larger aircraft will be needed as LCC routes grow Worldwide LCCs market share (% seats offered) Number of airline routes 41% of the LCC capacity LCC Routes* > 500 daily seats. 21% of seats now 19% offered by of the LCC LCCs capacity 2006 2007 2008 2009 History Estimates *Airport pairs operated by a specific airline Source: OAG, Airbus Source: Airbus, OAG. Number of LCC routes* > 500 daily seats.
  21. 21. Andrew Gordon / Presentation International aviation conference 2010 Great potential for growth for LCCs in Asia Pacific Aircraft size increased in all regions over the last 35 years Intra Asia Pacific LCC market share (% seats offered) Average aircraft capacity (number of seats) per flight Aircraft +41% 41% getting +34% bigger +31% 12% of seats +28% now offered by LCCs in +21% Asia/Pacific A i /P ifi +16% 2006 2007 2008 2009 Aircraft >90 seats only Source: OAG, Airbus Source: OAG, January 2009
  22. 22. Andrew Gordon / Presentation International aviation conference 2010 Single Aisles getting bigger Emerging markets driving World urbanisation 2% Population (billions) 13% Urban Population 48% Today T d 46% 5% Rural Population 29% 45% Source: UN,Airbus 12% Source: Ascend January 2008 Western Pax only
  23. 23. Andrew Gordon / Presentation International aviation conference 2010 A network of cities : 92% of the long haul The number of mega-cities will more than double traffic is from and/or to 37 “mega-cities” 37 “mega cities” in terms of mega-cities 82 bi cities where long-haul passengers big iti h l h l international air traffic demand will want to fly between in 20 years More Mega-cities Mega cities A A B A Destinations with more than 10 000 daily long haul pax Destinations with more than 10 000 daily long haul pax
  24. 24. Andrew Gordon / Presentation International aviation conference 2010 Growth in the size and number of mega-cities The A380 network keeps growing 30 A380s delighting passengers around the world Main long haul VLA routes by 2028 long-haul London Manchester Frankfurt Toronto Paris Zurich Beijing Tokyo New York Seoul Los Angeles A Dubai A B Jeddah Hong Kong A Bangkok Singapore Airlines g p Emirates Singapore Qantas Air France Lufthansa Sydney Additional airline-announced Johannesburg J h b routes for 2010 shown dotted Auckland Melbourne Over 138,000 revenue flight hours in over 15,000 revenue flights (as f J ( of June 3rd, 2010) d Destinations with more than 10 000 daily long haul pax More than 5.4 million passengers have already enjoyed the A380 experience
  25. 25. Andrew Gordon / Presentation International aviation conference 2010 The main drivers of tomorrow’s traffic growth Airbus Global Market Forecast highlights World fleet forecast 2008 2028 Change Growing Middle East passenger and cargo hubs RPKs (trillion) 4.58 4 58 11.58 11 58 +153% In Asia, more people able and wanting to fly everyday Passenger aircraft 14,016 28,111 +100% LCCs in Asia growing in number and traffic share New passenger aircraft deliveries - 24,097 - More potential through deregulation, particularly in Asia and Africa Dedicated freighters 1,731 3,865 +123% Growing urbanisation and a resulting increased New freighters deliveries - 854 - demand between major cities Total new deliveries - 24,951 - Passenger aircraft >= 100 seats
  26. 26. Andrew Gordon / Presentation International aviation conference 2010 Asia to lead in world traffic by 2028 New aircraft demand will average 1,248 per year 20-year world annual traffic growth Number of new aircraft 4.7% RPKs (billions) % of 2008 Traffic by airline domicile % of 2028 20-year World World growth RPKs RPKs 26% 2008 traffic 2009-2028 growth 6% 33% 28% 4.3% 26% 31% 2.4% 20% 5% 6.9% 8% 4% 5.8% 6% 3% 5.9% 4% 3% 5.2% 3% % units: 68% 17% 8% 7% % value: 39% 27% 15% 19% Passenger and freighter aircraft
  27. 27. Andrew Gordon / Presentation International aviation conference 2010 Agenda Baltic region’s traffic more than quadrupled since 2000 ASK development, 2009 vs. 2000 The Recovery North America Global Market Outlook Intra No nonstop regional CIS traffic in 2000 +257% +446% The Baltic Market Outlook Western Central C t l Europe Europe +643% +322% Intra I t regional traffic i l t ffi +257% Middle East and International traffic +361% North Africa Overall traffic +358% +544% Source: OAG (September traffic), Airbus
  28. 28. Andrew Gordon / Presentation International aviation conference 2010 Expanding international network from Baltic countries Traffic to Central and Western Europe dominating Traffic (million ASK) North America Baltic region 2000 Africa and Middle East Central and West Europe CIS 45 International 2009 nonstop routes* routes 121 International nonstop routes* * International routes: Routes from airports in Estonia, Latvia and Lithuania to airports outside these countries Source: OAG (September traffic), Airbus Source: OAG (September traffic), Airbus
  29. 29. Andrew Gordon / Presentation International aviation conference 2010 No coincidence airBaltic has grown its presence too Traffic (million ASK) Traffic share (on ASK) 1,000 50% 800 40% North America Baltic region Africa and Middle East Central and West Europe CIS 600 30% 400 20% 200 10% 0 0% 1995 1997 1999 2001 2003 2005 2007 2009 Source: OAG (September traffic), Airbus
  30. 30. Extending EU`s aviation frontiers International aviation conference 2010 Mark Nicklas joined the European Commission’s Air Transport Directorate in 2003. He has been a key member of the EU team in the EU-US air transport negotiations. As policy officer in the European Commission’s unit for air transport agreements and internal market, he has been involved in EU air transport negotiations with various third countries (e.g. US, Australia, New Zealand, Latin America, Mediterranean). In addition, he has dealt with the implementation of the internal aviation market in the EU. Since June 2010, he is assisting the European Commission’s Director for Air Transport in the coordination of the EU air transport policy. Prior to joining the European Commission, he worked as a manager in the telecommunications industry in Germany (Deutsche Telekom; T-Mobile International). Mark Nicklas Air Transport Agreements & Internal Market He studied economics and business administration at of EU Commission Hohenheim University (Germany). He holds a Ph.D. in economics.
  31. 31. Mark Nicklas / Presentation International aviation conference 2010   Extra-EU traffic flows Extra-EU passenger traffic is 35% of total EU traffic Extending EU’s Aviation Frontiers Mark Nicklas Internal Market, Air Transport Agreements & Multilateral Relations European Commission North Hub Riga Aviation Conference Riga, 9 June 2010 1 2
  32. 32. Mark Nicklas / Presentation International aviation conference 2010 From 27 National Air Transport Markets  International Air Services Agreements  to 1 Single European Market  Air traffic between two states is traditionally governed by restrictive bilateral air services agreements (ASAs)  Before 1992: national markets within the EU were protected and fragmented through  Restrictions on: restrictive bilateral air service agreements  How many and which carriers may fly? between EU Member States  How many weekly flights (frequencies)?  After 1992: One Single market without  To which cities / airports?  Pricing restrictions on market access and pricing  “Open Skies” agreements - opened market  2004/2007: Enlargement to 27 Member States access, but based on national ownership  Common EU rules in all areas of aviation  EU aviation policy – aiming at market opening,  The world’s largest and most successful ownership normalisation and regulatory convergence example of regional market integration and 3 liberalisation in air transport. 4
  33. 33. Mark Nicklas / Presentation International aviation conference 2010  Unprecedented Challenges Key Objective: Ensuring Sustainability of the Sector’s Growth 1. Global economic downturn Means: 2. Volatile fuel prices 1. Continue to lead towards highest safety and security standards – a pre-condition for growth 3. Increasing environmental pressure 2. Ensure environmental sustainability  Comprehensive approach 4. Security measures 1. Tackling the capacity crunch 5. Increasing costs from congestion – on land and  Avoid/reduce bottlenecks on the ground and in the air in the air 1. Competitiveness of the industry  Cost reductions, efficiency and consolidation 6. Most recently: volcanic ash in Europe  No bail-out – but accelerating structural reform  Removal of out-dated ownership and control restrictions 1. Extend benefits of market opening 5 6
  34. 34. Mark Nicklas / Presentation International aviation conference 2010  Going Beyond Europe: The Three  Guiding Principles in EU External Pillars of the External Dimension Aviation Relations I. Bringing existing bilateral agreements into  Relations must be based on agreements that line with Community law respect Community law. If not: II. The creation of a “Common Aviation Area”  Agreements vulnerable to legal challenge with neighbouring countries  Uncertainty for commercial operators  Parallel process of market opening and  Level playing field allowing all airlines to compete adoption of EU legislation on a fair and equal basis I. Conclusion of ambitious global agreements  Regulatory convergence with key partners (US, Canada, Australia,  No «one fits-all» approach: Agreements depend on New Zealand, India, China, Russia, Brazil…). relations to third country 7 8
  35. 35. Mark Nicklas / Presentation International aviation conference 2010  Pillar I: “Community Designation”  Progress on the EC designation Requirement of the EU internal market  104 non-EU states have accepted Community  Objective: designation  To allow EU carriers to benefit from the right of establishment within the EU,  Nearly 900 Bilateral ASAs (around half) have including non-discriminatory access to air been brought into conformity with Community routes to third countries. law (representing 70% of extra-EU traffic)  New clause:  Any EU Member State can designate any  41 “Horizontal” Agreements covering nearly licensed EU carrier with an establishment 700 ASAs in its territory  No changes in traffic rights granted in bilateral agreements 9 10
  36. 36. Mark Nicklas / Presentation International aviation conference 2010  Pillar II: A Wider Common Aviation Area  Common Aviation Area with Neighbouring Countries by 2010 – progress  Southern and Eastern neighbouring countries  Pre-accession context: Western Balkans (ECAA)  ECAA Agreement signed in June 2006  New candidate: Moldova  Morocco (Euro-Mediterranean agreement)  EU-Morocco Agreement signed in December 2006  Negotiations concluded with Georgia and Jordan in 2010  Ongoing negotiations with Ukraine, Israel, Lebanon Negotiation mandates for Tunisia, Algeria  Open to other countries, including from Central Asia  Ambition: “Towards a single market of more than 50 states and 1 billion inhabitants” 58 States – Approx. 1 Billion inhabitants 11 12

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