There National Federation of Aviation and its Professions (FNAM) held a press conference last week to take stock of a generally positive summer season for French air transport, and discuss the outlook for 2024 as well as main challenges of the sector.
For FNAM, the air transport industry in France is indeed facing significant economic and environmental challenges in a hitherto dynamic commercial context. However, it suffers from the absence of a stable regulatory and operational framework allowing it to calmly plan an ecological transition that is as necessary as it is costly.
Economic environment
French air transport faces a less predictable economic environment after the post-Covid rebound. While passenger air transport maintained a good performance overall, the cargo and general and business aviation sectors experienced a decline after the Covid “bubble”. Major airline costs including kerosene, taxes, specific carbon taxes, royalties, labor costs and maintenance have increased significantly. Prices, measured by the IPTAP DGAC Index, have therefore increased.
Overall, air traffic has held up well. Connections to the French Overseas Territories, like international traffic, recorded good performance even if geopolitical tensions in regions such as Ukraine, West Africa and now the Middle East call for vigilance.
Summary of summer 2023 and outlook for 2024
The summer of 2023 was marked by good operational performances (border crossing and security and baggage processing) at the airports, despite activity approaching 95% of 2019 levels for the Paris-Charles-de hub. -Gaulle. However, punctuality problems persist, notably due to the still insufficient performance of air traffic control (ATC). These challenges will persist in 2024 with the implementation of the 4-Flight system which constitutes a “necessary evil” to improve performance.
Airlines fully support efforts to increase the predictability of the impacts of social movements in air traffic control centers. The FNAM therefore hopes that the corresponding bill will be adopted quickly by Parliament.
The long-haul traffic outlook for winter 2023/2024 remains optimistic, with a return to nearly 98% of 2019 capacity in terms of seat kilometers offered and a development in particular of services to Asia. The entire sector is finally preparing for the big events to come, in particular the Olympic Games. In this context, the FNAM calls for employees’ access to airports to be guaranteed in good conditions during this period and for any flight restrictions, particularly for the opening ceremony, to be as limited as possible.
Air transport taxation
The observation is not new but the French flag continues to suffer from strong and regular erosion with a market share now below 40% (while it was above 60% around twenty years ago ).
The decarbonization of the French aviation sector is a necessity to which French airlines are committed. However, it comes with significant costs and the sector, already highly taxed, needs to be able to invest its limited profits in its own ecological transition.
Consequently, the FNAM reiterated its strong opposition to the establishment within the framework of the 2024 Finance Bill of a new tax on long-distance transport infrastructure relating in particular to the turnover of certain airports. . This unfair tax will be almost entirely borne by French airlines which operate on major Parisian or provincial platforms, while large “low-cost” foreign companies will paradoxically be spared.
Another major concern concerns the financing of the sovereign activity of airport security. FNAM is calling on the State to cover all or part of the cost of this activity during the Covid period in order to limit the forecast deficit in the security and safety tariff (T2S).
Airlines are finally paying particular attention to a possible evolution of airport regulations. They have formulated joint proposals with the Union of French Airports (UAF). They also support the recent recommendations of the Transport Regulatory Authority addressed to the government on this issue.
Ecological transition
FNAM recalls that the ecological transition of the aviation sector is based on several pillars, in particular technological progress through the renewal of fleets, the use of sustainable aeronautical fuels (CAD or SAF in English) and the optimization of flight operations. With regard to CAD, it is essential that the government guarantees, in addition to the development of a French sector, access to the necessary biomass while awaiting the development of e-fuels and puts in place mechanisms ensuring a purchase price reasonable.
A tax surcharge system to encourage the renewal of runway equipment in order to “green” them is important to promote the decarbonization of ground operations.
Continuous descents are a key element in reducing both CO2 emissions and noise (1). This should constitute, in the same way as fleet renewal, a priority in the current balanced approach studies. These are in fact essential to put into perspective the economic and social advantages provided by aviation activity in relation to the nuisances generated.
(1) The social cost of noise in France is estimated at 147.1 billion euros per year according to ADEME. 66.5% of this social cost corresponds to transport noise, mainly road noise which represents 54.8% of the total cost, followed by railway noise (7.6%) and only then air noise (4.1%).
