Is There a Shift in German Aviation Policy?

There are cautious indications Berlin’s Grand Coalition of Conservatives and Social Democrats might be more open to the concerns the country’s aviation sector has been plagued by in recent times. But so far, changes for improving the operational, financial and infrastructural conditions have to be searched for with a magnifying glass. Meanwhile, the industry has to do their homework to turn things to the better and bring the general public’s attention to its case.

BDL panelists: U. Tillmann, VCI  / M. Otto, EAT  /  A. Giesen, Fraport  / M. Garvens, CGN  /  M. v. Randow, BDL  /  P. Gerber, LH Cargo  /  M. Kopp, MDA Holding  /  K. Lindemann, VCI  -  source: J. Schulzki
BDL panelists: U. Tillmann, VCI / M. Otto, EAT / A. Giesen, Fraport / M. Garvens, CGN / M. v. Randow, BDL / P. Gerber, LH Cargo / M. Kopp, MDA Holding / K. Lindemann, VCI - source: J. Schulzki

Operational restrictions, night flight bans, failed airport enlargement projects, air passenger taxes to be paid on all departures from any domestic airport – the German aviation industry didn’t have much to laugh about in the last couple of years. However, there are initial indications that the politically much bashed sector is gaining the attention it deserves, given the economic significance of this industry.
How essential smoothly functioning supply chains are for the economic well-being of the entire nation was exemplified by prominent managers at the German Aviation Association’s (BDL) forum held at Cologne/Bonn Airport last Friday.

Pharma needs air freight…
During the event, attended by about 80 representatives, Managing Director Utz Tillmann of the national Association of the Chemical Industry delivered some thought-provoking figures. According to Herr Tillmann the local chemical and pharmaceutical companies generate an annual turnover of €190bn. While the export quota of chemical products stands at 60 percent, it is an impressive 80 percent which is reached by pharmaceutical and medical goods. “An uninterrupted cold chain from door to door, is depending on reliable, safe and fast air transports,” emphasized Tillmann. “Carrying those goods by sea is no alternative for us,” he stated, by pointing out that night flight restrictions at a hub like Rhine-Main severely hamper his member firm’s biz.

… so does automotive
A similar plea for improved infrastructural and operational conditions was delivered by MD Kay Lindemann of the influential Association of the Automotive Industry. German car makers produce 15 million vehicles per year, of which 40 percent are put together by domestic plants and 60 percent stemming from factories located abroad, mainly in China, the U.S., Mexico and Brazil. “Generally, cars are not flown by plane from the producer’s plant to any foreign market, but air freight is nonetheless indispensable for us to fast bridge continents for forwarding components, ad-hoc shipments and other items from one production site to the next.”

Trusting the political framework  
Lufthansa Cargo’s new CEO Peter Gerber added to this by pointing out that all goods that are of high value and urgently needed by consignees are normally airlifted according to highest security standards.” “Trusting that the framework conditions will be improved for our industry we at Lufthansa Cargo decided to invest more than €2bn in new freighter aircraft, a state-of-the-art warehouse at our home-base Frankfurt, a new IT platform and some other areas,” Peter stated. “We are an essential part of the logistics infrastructure the German economy is depending upon,” he reasoned.

In his contribution BDL’s MD Matthias von Randow strongly supported long-missed political initiatives that strengthen the competitiveness of the entire German cargo industry. This sector has lost its leading role in recent years by home-made legislative interventions, its negative public reputation, but also by being increasingly challenged by aggressive and sometimes state supported competitors mainly from the Gulf region but also Turkish carriers.
Anke Giesen, Executive Director Operations at airport operator Fraport AG, pointed out that about 50 percent of all German exports brought out by air are handled at Rhine-Main. “By investing into future projects, taking into account the legitimate concerns of our neighbors, we intend to become best-in-class cargo hub in Europe.”

Job motor LEJ
MD Markus Kopp of Leipzig/Halle Airport added to the debate by asking why in recent year car producers like Porsche or BMW together with pharmaceutical firms and IT providers have chosen the vicinity of Leipzig Airport to set up their business. “Because they all need an airport that guarantees 24/7 ops and hence the fast flow of goods.” So far, this resulted in 6,000 new jobs created at LEJ Airport within the last couple of years, of which 3,500 are offered by DHL Express.
Having convincingly presented the needs of the aviation industry the ball was in the court of the politicians.  Social Democrat Andreas Rimkus who attended the BDL meeting on behalf of other MP’s of the German Bundestag acknowledged that there is a better understanding of the many challenges the German aviation industry is increasingly facing. “This accounts at least for the politicians involved in the transport sector, but we still have to convince the financial experts sitting on the other side of the table,” Rimkus said. He indicated however, that there are tendencies within the Coalition to channel the revenues gained from the Berlin imposed ticket to research and development activities to the sole benefit of the aviation industry. Today, the millions of euros levied by the state flow into the general budget, mainly to cover social expenses.

Hopefully this will not be the fate of the German cargo industry  /  source: private
Hopefully this will not be the fate of the German cargo industry / source: private

Pax taxes might flow from pot A into pot B – a first sign of hope?
The re-channeling of passenger taxes from one pot into another is not really hailed by the aviation industry that remains in fierce opposition to the entire issue. Positively seen, this can, however, be interpreted as a small chink of hope among other incentives to improve the conditions of this vital economic sector.
Wrapping the meeting up Lufthansa Cargo’s Peter Gerber said: “Recently, our industry had to shoulder many burdens. In the meantime, however, there are cautious voices indicating a greater sensitivity to our needs by politicians.” 

The industry must do its homework
And what is the industry doing itself for quitting its defensive position? Political petitions won’t be enough. Therefore, CargoForwarder Global addressed the association representatives Utz Tillmann and Kay Lindemann, by asking them which support their clubs and member firms can give to end the cargo industry’s time of suffering. “The fact that we are sitting here up front at this event presenting the concerns of our individual businesses is proof that we decided to become more involved,” answered Tillmann.

Give cargo a sex appeal
It further must be asked what is to do that cargo related topics get more attention by the media, particularly since air transports are not seen by the general public as being really sexy. It was Peter Gerber who answered this question, admitting that the industry must intensify the efforts for broader coverage to gain more public understanding and recognition. To wait for the outbreak of an Icelandic volcano causing a standstill in aviation and leading to supply bottlenecks is by far not enough.
In his closing remarks Herr von Randow announced that the next BDL cargo forum, will take place in Leipzig in 2015.

All well and good!
Its good to see that the industry and politicians get together from time to time on this very pressing issue.
However, politicians around the world are not known for their true commitment to such issues and tend to dance around the subject and basically only pay lip service.
What will be achieved by the time the follow up meeting is held in Leipzig?
Probably not much.
We feel that the shipping industry and the airlines management have to present a forceful case to the government, one which they have to act on pretty fast now.
The media should also play an important and positive role in public awareness in this respect.

Heiner Siegmund  /  John Mc Donagh

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