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Leo Van Wijk takes over chairmanship of Association of European Airlines

The Association of European Airlines (AEA<.>), representing the major European scheduled airlines, has announced that…

The Association of European Airlines (AEA<.>), representing the major European scheduled airlines, has announced that Leo van Wijk, President and CEO of KLM Royal Dutch Airlines, will head the Association in 2002. As AEA Chairman, Mr van Wijk succeeds Jean-Cyril Spinetta of Air France.



Mr van Wijk will be assisted as AEA Chairman by a Presidents` Committee composed of member airlines` Presidents/CEOs:


Mr J-C Spinetta of Air France,

Mr F. Cereti of Alitalia;

Mr R. Eddington of British Airways;

Mr X. de Irala of Iberia;

Mr J. Weber of Lufthansa and

Mr J. Lindegaard of SAS.


Leo van Wijk has spent his entire career with KLM, having joined the airline in 1971. He held a succession of senior posts in Cargo, Marketing, Commercial Services and Corporate Development before being appointed President and CEO in 1997.



He takes over the helm of AEA at a time when the European airline industry has been thrown into turmoil in the aftermath of the September 11th outrage. The AEA itself has been faced with upheaval as its membership list in 2002 will show distinct changes from 2001.



Said Mr van Wijk: No-one in the industry has ever known things to be as tough as they are now, and when the going gets tough, the instinctive reaction is to look after yourself, first and foremost.



Nevertheless, we are all facing the same challenges and we shall resolve them more effectively by acting together. More than ever, the industry needs to speak with a single voice.




The aftermath of September 11th, he said, had seen a number of commentators speculating on the future of the industry, and in particular the role of the national carriers vis-a-vis their no-frills competitors. He warned that the one should not be seen simply as a substitute for the other.



The no-frills sector occupies a niche, he said, in the same way that the charter sector occupies a niche. They are strictly point-to-point carriers; if you want to travel the same A to B that they happen to fly, they offer a viable alternative to the full-service carriers. But remember that the network carriers serve a market which is many times larger, both in volume and in geographical coverage.



Largely because of their global reach, since September 11th the network carriers, as represented by AEA, had seen massive traffic losses, while external costs had increased substantially. More than three months after the start of the crisis, traffic is still 15-20% below the level of a year ago.



Meanwhile, costs have risen relentlessly. Huge increases have been imposed by the aviation insurance sector, which in many respects operates as an unregulated cartel with corporate links to the aircraft leasing companies. Security costs, too, have increased substantially.



Another sector, Air Traffic Control, has seen many national systems responding to lower traffic projections by simply increasing their charges. In Europe`s core area, France, Germany and Switzerland are raising their rates by more than 10% in 2002, Belgium by a massive 28%.



Said Mr van Wijk: These dynamics are not new, but they are once more – and very clearly now – highlighted by the September 11th crisis. If you imagine the value chain involved in the creation of our product, so many participants are beneficiaries, but least of all the airlines. In the case of ATC, here is a part of the chain with a totally different business philosophy to that of the airlines. If we the airlines lose part of our market, we don`t recover our losses by charging more to our customers.



Most of the value we add is passed directly to our customers. This is quite normal: they provide us with our livelihood, and our job is to ensure that they are satisfied with our product from a price:service point of view.



But all along the line, from aircraft manufacturers, through airport and airspace providers, support services, to distribution media, we seem to be providing steady returns for everybody, but fail ourselves even to earn our cost of capital. The airlines are the weakest link in the chain. It is in the interest of everybody involved in the European air transportation system that we improve our position.




Mr van Wijk pointed out the crucial role of regulators and other government agencies in resolving the problem. There are many important policy issues on the table now: security, passenger rights, airport slots, insurance, the environment, airline consolidation, transatlantic economic regulation. It is the task of the AEA to work with the regulators and give coherence to these issues. The airlines can no longer afford to operate within the traditional framework of fragmented answers and isolated solutions. The costs of a fragmented approach – both in terms of financial costs and ineffective public policies – can no longer be explained to our customers, employees and shareholders.



We need a blueprint for a sustainable European air transportation system. The EU White Paper is a good starting point, addressing the importance of responsible growth in terms of airspace and airport capacity, safety and the environment. As Chairman, I will ensure that AEA provides the specifics and priorities in the context of economic sustainability and future industry dynamics.




The AEA`s work programme for 2002 will address the various upcoming issues against that background. The debate on Airport Slots continues, with the issue currently before the European Parliament. Said Mr van Wijk: Slot availability is fundamental to everything we do as hub-based network carriers.



Encouraging for the airlines is the renewed progress towards an overhaul of Europe`s patchwork Air Traffic Control system under the Single Sky initiative. Blocked throughout 2001 by issues arising from the Gibraltar situation, the topic is back on the EU agenda. Many AEA Chairmen have started their year hoping that it would be in their term of office that the breakthrough occurred. I am no exception, said Mr van Wijk. I am hoping the same thing.



Airlines recognise the need to strike a balance between growth in air transport and the environment,
he added. 2002 will see progress towards the next generation of Aircraft Noise standards, with an April deadline for implementing an EU directive that embodies the `balanced approach` formulated within ICAO in 2001. This contains several elements which tackle the problem in a pragmatic and constructive way.



Said Mr van Wijk: Most importantly, airports seeking to introduce operating restrictions will be given a framework within which to evaluate the benefits relative to the costs involved. We have moved away from the notion of a standard set of rules, towards a standard methodology, producing flexible solutions linked to local conditions.



Leo van Wijk`s chairmanship will see the realisation of a long-running project in the form of the Airline Passenger Service Commitment, which will be implemented by AEA member airlines during the course of the year. This is a real product enhancement, he said, but it also has a symbolic significance. It sends the message that, throughout these difficult times, we have not neglected our first priority, which is our duty to our customers.

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