The International Air Transport Association (IATA) said that a strategic government agenda to improve competitiveness in France’s air transport sector could generate an additional 500,000 jobs and nearly €60 billion in extra GDP for the nation’s economy by 2037.
These conclusions were reached in a new IATA report on French air transport regulatory competitiveness, which contained three key recommendations to enhance air connectivity in France and boost economic and social opportunities in the country.
“Aviation is the business of freedom, and already creates considerable benefits for France. But France’s competitive position in Europe is notably weak in infrastructure costs, air traffic management efficiency, the quality of regulation, and the costs of social charges. There are huge opportunities for more jobs and greater economic growth if these weaknesses are addressed. The Assises Nationales du Transport Aérien explored these issues but with no significant follow-up measures taken to boost competitiveness. The launch of this competitiveness report with FNAM and the BAR France provides an opportunity to strengthen the foundations of the National Strategy for Air Transportation 2025, which was announced by Minister Borne at the Assises,” said Rafael Schvartzman, IATA’s Regional Vice President for Europe.
At present, aviation generates approximately €100 billion in GDP and 1.1 million jobs in France. Maximizing the competitiveness of the aviation sector could see these numbers increase to nearly €160 billion and 1.6 million jobs, by 2037.
The report’s three key recommendations for France are:
1. Reform economic regulation, such as by strengthening the independent economic regulator, to ensure charges are cost-related and efficient.
2. Implement a French ATM strategy to maximize capacity and efficiency of air traffic management.
3. Adopt smarter regulation principles, for example, promoting offsetting rather than taxation to tackle CO2 impacts from aviation.
Robust Environmental Strategy
Adoption of these recommendations could see passenger demand in France grow from around 90 million today to 142 million under the most optimistic scenario. The successful accommodation of demand for air travel, however, must sit alongside a robust environmental strategy to ensure a sustainable future for flight.
“Aviation must earn its license to grow by demonstrating its environmental credentials. We have ambitious global targets for carbon-neutral growth from next year, and to cut net emissions to half of 2005 levels by 2050. These targets are compatible with the wider goals of the Paris Agreement. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) will generate $40 billion in finance for carbon reductions, but it needs strong support from the French government to ensure its success. Key to that is to resist calls for unilateral measures such as aviation climate taxes, which will provide no environmental benefit and could undermine the international consensus for combined action on aviation carbon emissions,” said Schvartzman.
“The French Assises du Transport Aérien did not conclude with significant measures allowing the French air transport sector to become competitive versus its competitors. The weight of taxes, specific charges related to the sector, and the social charges in France are way above the European average and constitutes a heavy handicap for the airlines based in France,” highlighted Alain Battisti, President of FNAM and Chalair Aviation.
“The capacity of the airspace and connectivity are two essential elements to the economic and tourist development of a country” said Jean Pierre Sauvage, President of BAR France.
The report on French air transport competitiveness benchmarked France against the rest of Europe across five key areas.
- Passenger facilitation: France has successfully implemented automated border control systems, but visa application processes are lengthy.
- Cargo Facilitation: Adoption of digital cargo processes such as e-Air Waybill is low, but initiatives to improve cargo movement facilitation are under way.
- Supply Chain Management: France has among the highest passenger charges and taxes in Europe, increasing the cost of traveling by air, and hampering connectivity.
- Infrastructure Management: France could improve its capacity use of existing terminals and runways, to allow costs to be reduced in the short-term, and create sufficient capacity for future longer-term growth.
- Regulatory Environment: Many regulations that apply in France are inconsistent with smarter regulation principles, particularly adopting a more systematic approach to consultation.