Salzburg Summit

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Air Transport: A stronger partner for the European Economy
European Aviation Summit Salzburg, 4-5 May 2006

Mr. Wolfgang MAYRHUBER
CEO of Lufthansa and President of AEA “Enhancing European Air Transport Competitiveness”

High Level Conference, Salzburg, 4 May 2006 / Slide - 1 -

AEA MEMBRES A TRAVERS Europe’s air transport 30 members’ contribution to L’EUROPE

European airlines – a € 100 bn business 580 mio. passengers – 26% of scheduled passengers worldwide 9 mio. tons of cargo – 17% of worldwide freight, most high text exports Aviation creates jobs: More than 3 mio. jobs (500.000 direct) depend on aviation. By 2020 this number will double. GDP: Aviation contributes 8-10% to GDP. (11-13% in 2020) This should be the starting point for EU White Book “Mastering” aviation growth should not mean “contain” growth, but “foster” growth High Level Conference, Salzburg, 4 May 2006 / Slide - 2 -

Europe – a cradle of mobility

Christopher Columbus

Trains

Gottlieb Daimler

Gustav Weisskopf

Junkers

Concorde

Do we capitalize on our innovations?

High Level Conference, Salzburg, 4 May 2006 / Slide - 3 -

Air transport is a driver for mobility

1. Mobility necessary for economic prosperity. Airlines deliver.

2. Mobility increases Europe’s integration. Airlines deliver.

3. Mobility enables trade and tourism. Airlines deliver as well.

Air Transport contributes greatly to Europe’s growth, prosperity and integration. It is itself a growing industry combining hightech and services.

High Level Conference, Salzburg, 4 May 2006 / Slide - 4 -

Aviation - a highly efficient user of resources

Land Use: 3 kilometers of rail track or motorway = 3 km 3 kilometers of runway = the world Fuel Efficiency increased 20-25% since 1999 (~3 liters/100 Passenger km on an A346) Fuel prices are huge incentive to maintain trend Noise patterns have decreased drastically By channeling international routes via hubs, airlines minimize impact on environment

High Level Conference, Salzburg, 4 May 2006 / Slide - 5 -

A challenging world…

Competition becomes tougher and not necessarily fairer… US: Chapter 11 and other governmental aid (security costs, insurance) permit US carriers to reduce prices and dump capacity Far East: Rapid expansion of emerging global economic powers China and India. Increasing presence of Far East carriers in all international markets. Middle East: Governmental aid, EU and U.S. Credit Guarantees to fund massive capacity expansion of Gulf airlines (+ 142% since 2002, 19 % p.a.). Construction of world’s biggest airports in record time. Goal: To replace EU as finance, transport, logistics hub.

High Level Conference, Salzburg, 4 May 2006 / Slide - 6 -

Europe is not yet as competitive as it should be

Divergence in efficiency

Aircraft

Airport

ATM

Airlines

High Level Conference, Salzburg, 4 May 2006 / Slide - 7 -

Value Chain: Diverging efficiency trends
Aircraft... Appr. 60% reduction of fuel consumption per engine in 40 years Reduced emissions, less noise Further progress likely ATM... Safe, but unnecessarily costly: EUROCONTROL estimates that, because of different technological systems and fragmentation of airspace, European ATM has 3 bn euros of superfluous costs Traffic growth will amplify inefficiencies, bottlenecks will lead to substantial economic damages Structural and regulatory consolidation overdue Severe competitive disadvantage for EU carriers

High Level Conference, Salzburg, 4 May 2006 / Slide - 8 -

Value Chain: Diverging efficiency trends
Airports Capacity constraints at major hubs
• one European carrier alone uses 115.000 tons of kerosene p.a. to operate circuitous routes and holding patterns over hubs in Europe – the equivalent of 4000 flights Europe-New York

Insufficient infrastructure undermines punctuality, is detrimental for the environment, and cost driver. Lack of incentives for airports to reduce costs Competitive...
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