Loyola de Palacio arrived in Brussels with a formidable reputation as an effective and determined politician. After less than six months as Europe's new Transport Commissioner she has yet to disappoint. Her frank and occasionally formidable style has made an impression. More importantly, so has the speed with which she has put aviation policy back on track.
Equally impressive is that Palacio has done so while combining the transport and energy briefs, and also acting as European Commission (EC) vice-president. As the uninitiated are quickly advised, there is no such thing as a long meeting with Palacio. Appointments are, characteristically, short and to the point.
She scarcely looks up from signing off policy papers from a previous encounter, before launching into her agenda for air transport, or rather, as she points out, not her personal view but that of the Commission. Questions of her own background are dealt with brusquely. She rattles off details of a political career in Spain which led from heading her party's youth movement in the late 1970s, to a seat in the senate in the 1980s and on to become agriculture minister in 1996.
The meeting ends as abruptly as it began with Palacio starting her next appointment. Most in aviation reckon that it may be no bad thing that she is busy. The transport directorate of old, they argue, tackled too many issues and resolved too few. Palacio has laid out her agenda more sparingly.
To the unbounded delight of Europe's air transport industry, the issue which tops her list is that of the delays caused by the region's creaking air traffic control (ATC) system. "We have a huge problem in air transport and we cannot sit back and do nothing, without trying to resolve it," she says. More to the point, her intuition is clearly to tackle underlying causes rather than treat symptoms. Within weeks of her arrival in Brussels, transport issued its European single skies initiative, stating baldly that the root cause of delays lay in the inefficiency of Europe's fragmented patchwork of national ATC regions. Therefore, the region's airspace must be brought under a "collective" management structure. Europe's airlines and airports could hardly have put it more bluntly themselves.
It is a theme to which Palacio readily warms. She sees it as a straight question of completing European integration - a single airspace to go alongside a single market. If much of the last decade was spent breaking down barriers between the European Union (EU) member states on the ground, then why should barriers still persist in the air? She agrees that demolishing such barriers will indeed take a major shift in attitude on the part of member states, not least among their military forces. But she believes that the debate is ripe for the picking and points out that Europe has tackled larger integration projects - the single currency for one.
Similar themes run through the other issues on the air transport agenda, such as the creation of a single European safety agency as an EU body. The environmental issue, too, is being prompted by concerns over fragmentation as airports across the EU bring in their own brand of local restrictions. The night curfew at Brussels is a reminder close to home. It was the need to impose some order, she argues, that led the EC to adopt its position on aircraft noise a year ago, including the controversial hushkit ban. "Airports are taking up unilateral positions and we were trying to avoid that. We need a common position, but to do that, we need to strengthen standards," she says.
Transatlantic single skies
Another major strand of policy centres on the thorny issue of transatlantic bilateral negotiations. Neil Kinnock, her immediate predecessor at transport, had fought a pitched battle to hold US talks on behalf of the EU. This, he argued, was a natural extension of the single European aviation market. He never achieved more than a token mandate.
Palacio has instead picked up and pushed forward the more radical concept of a Transatlantic Common Aviation Area (TCAA). The policy is not entirely hers but emerged from the Association of European Airlines (AEA), the region's club of major carriers. Instead of a traditional exchange of bilateral rights or even open skies, the concept is to create a single market across the Atlantic, run under a joint EU-US framework. Kees Veenstra, the AEA's deputy secretary general and a veteran of Brussels aviation policy, muses that the concept could usefully borrow from the model of Europe's own single aviation market, and perhaps even provide a blueprint for a new approach to world trade in general.
This big policy idea, with its integrated framework, seems to suit Palacio well. It neatly sidesteps the old debate about negotiating rights. "We believe that we already have a mandate to explore such an issue with the USA," she says. And it has also allowed Europe to regain some of the initiative on liberalisation, which had resided firmly with Washington. Palacio was able to give a powerful performance when the US Department of Transportation held its "Beyond open skies"ministerial in Chicago last December. The onus for a response is now back with Washington. "First, we need to know if the USA is ready to sit down and discuss serious issues such as ownership, foreign investment or competition," she says. "We have to resolve a lot of issues," she adds, running off a list that includes everything from aircraft leasing and passenger rights, through to air safety. She agrees with Washington that it makes sense to start with an EU-USexperiment, but anticipates that other deals would follow quickly.
There are a handful of other issues posted on Palacio's agenda. The enlargement of the EU beyond the current 15 is one theme. "To participate in this commission is a huge opportunity, when we're being confronted with a turning point in the union,"she says, adding that an EUwith more than 30 members means a qualitative as well as a quantitative change. Then there is the paper on airline passenger rights now out for consultation. And she is prompted by her aide to mention Galileo, Europe's answer to the US global positioning satellite system. But the issues on which her success is likely to be judged are those of ATC, external policy, the environment and a safety agency. The directorate's air transport arm has already been reorganised into four units broadly focused along those lines.
Battles ahead
So, does Palacio really expect to succeed in these initiatives? The EC's track record to date has not been bright. She gives a rare smile and quotes an old Spanish proverb: "The only battle that you are certain to lose is the one that you do not fight."
There are a few good reasons why she might just be in a better position to win this time. To start, there is her own reputation as a stubborn negotiator. There are tales of EC officials emerging ashen-faced from exchanges with her when she sat on the other side of the table as Spain's agriculture minister.
Then there are the changes in Brussels itself since the ignominious collapse of the previous regime - the event which effectively brought Palacio and her colleagues into the EC. Carping about petty corruption, favouritism and general inefficiency had plagued the the Commission for some time. But a year ago, armed with a damning investigative report, the European Parliament finally lost patience and demanded that some of the offenders went. The commissioners resigned en masse.
Under new president Romano Prodi, a fresh team was sworn in at the end of September. A few familiar faces have returned, including Kinnock, who has taken on an internal affairs brief to ensure that the new EC behaves better than the last. But most are part of the new wave, including Palacio, who, as vice-president, will handle relations with the European Parliament.
Critics still have their doubts over the real depth of the reform. Yet some details have already changed for the better. The new commissioners have been given smaller private cabinet offices, each with appointments from a range of nationalities to avoid old jibes about national cliques and women account for 40% of the new intake. Commissioners are now together with their staff, giving them a closer oversight of policy and implementation. The directorate generals (DGs) have even lost their anonymous numbers - so that DGVII re-emerges as DG Transport. It may not be much, but it is a small sign of a new mood of openness and transparency in place of the insider cliques and internal politics of old.
Whether or not change does eventually go deeper, the new Commission at least has the advantage of a fresh start. If it does well, the change could prove to be a platform from which to build relations with national governments and perhaps ultimately convince them that Brussels has the ability and authority to act wisely.
Change at the top has certainly allowed the transport directorate to jettison some unhelpful baggage from the past. The aviation agenda for much of the 1990s centred firmly on the grand project of completing a single aviation market. Along the way that almost inevitably meant confrontation with national governments and carriers. When Kinnock arrived at Transport in the early 1990s, he immediately inherited a storm of controversy over airline state-aid and protectionism.
Meanwhile, the USA was busy offering open-skies deals in return for alliance anti-trust immunity. That not only left Europe scrambling to regain the initiative, but brought competition issues into the equation. Karel Van Miert, then Competition Commissioner and keen to underline the EC's standing in the world, took the lead in imposing punishing conditions on alliances, while Kinnock was left to take legal action against member states which had signed for open skies.
In short, it was not the best of environments in which to ask member states to agree new powers or to seek a consensus with industry. The AEA admits that it had little faith in the EC's willingness to hear the industry message or fight its corner. As one official complains, there was a time when air transport interests appeared to be losing out in every battle. Not only, it seemed, were EC competition and environmental policies taking precedence, but, within the transport directorate itself, aviation was coming a poor third to road and rail. The right noises issued forth from Brussels on the shameful state of ATC delays, moans the AEA, but nothing changed.
Now there is finally a scent of something new in the air. Not only has the EC put aviation back on the agenda, but it appears ready to listen to and even adopt industry policy. "We're still waiting for the bubble to burst," admits one AEA official. Iberia chairman Xavier de Irala, opening his year as AEA president, could not help noting that relations with the EC are at an historic high. As an added bonus, Irala is a fellow Spaniard and knows Palacio from politics back home.
For its part, since Palacio's arrival, the transport directorate has been at pains to build bridges with the industry. It been carefully even-handed on everything from alliances to air fares. Even when presenting the recent proposals on passenger rights proposals, a potential sore point with the major carriers, Palacio manages to express "some sympathy" with the hard-pressed carriers in her introductory remarks. For their part, the airlines are attempting to reciprocate the goodwill. They admit privately that, a short while ago, they would have been tempted to fight passenger-rights proposals clause by clause. Today they hope to be constructive.
Palacio does not seem inclined to dwell on past mistrust. She makes it clear that her predecessor did "an excellent job", although she acknowledges that a new appointment inevitably brings "a new approach and their own way of dealing with the subject".
Making progress
So what of progress has been made to date? The single-skies initiative appears to have built a head of steam. Palacio notes that even President Prodi included the issue of flight delays in his opening speech to the new Commission last year.
The opening gambit was the forthright position paper on the single skies initiative. It pointed out in no uncertain terms that the present position cannot continue, with delays reckoned to cost industry e5 billion ($4.92 billion) annually and that what could be achieved within the present structure. "There is no global approach to how we deal with airspace, no global management," says Palacio, arguing for the flexibility and efficiency that collective airspace management should bring. "All of this has huge consequences for a lack of competitiveness in Europe," she adds, pointing out that the US system handles 48,000 air traffic movements a day to Europe's 26,000. She recognises that the US system faces its own "huge problems", but points out that it is starting from a base with nearly twice the number of movements.
The preferred option is to use the existing structure of Eurocontrol, the body already charged with integration and harmonisation of ATC services across Europe. But Palacio is clear that co-operation, on its own, "is not enough" and issues a firm warning to member states that they may have to face more radical options, "implying a political commitment at the highest level". The real implication is that states will have to consider losing the reins on their national ATC services in favour of some form of European authority, whether it is Eurocontrol or otherwise. That is a step and a half further than most have so far shown signs.
"I'm aware that this means a major change for the governments and there is a risk that I'll fail, but I'm going to try," she says. Her aim is to bring together all those involved in the debate - governments, airline users, airports and aviation authorities alike. She quickly set up a "high level group", chaired by herself, which assembles aviation representatives from member states. She stresses that this includes representatives from the military - another source of airspace fragmentation. Eurocontrol has also been invited to become involved in the initiative, alongside the 15 EU states, as have Switzerland and Norway. The first couple of meetings have taken place, with a pledge to have some conclusions ready by the time that the current Portuguese presidency of the EU concludes in mid-year.
There is still some way to travel before it becomes clear whether Palacio has won this particular battle. Airlines and airports are waiting nervously to see whether the clique of national aviation agencies will attempt to trump the initiative with the safety card, or governments will baulk at encroachment on their sovereignty. Some voice fears that the high-level group is, as ever, populated by the national "safety cars" keen to protect their patch.
However, Palacio believes it is a debate whose time has come. Airlines and airports could not agree more. Veenstra at AEA points out that there has been a "lot of water under the bridge" over the past few years. And, as the EU as a whole moves towards ever deeper integration - he quotes the single market and single currency - so the task for aviation too should become easier.
Another example could be the long-running saga over the creation of a single European Aviation Safety Agency (EASA) to take on the mantle of the Joint Aviation Authorities. That had become mired in debate about how to fit such a body within the rigid decision-making structure of the EC. In the end, a compromise was struck with the EASA to be an international body with the EC as a member.
Upon her arrival in Brussels, Palacio quickly questioned the compromise, preferring to see a full EU agency allied to the EC. That could yet require some innovation, given that the EU's treaty does not exactly allow for such a semi-detached decision-taking body. Yet even here it is possible that the next amendment to the EU treaty could help provide for one.
Such a new style of body is likely to be a necessary condition for a common aviation area is to take shape across the Atlantic. A flexible international body with a decision-taking role looks much more promising than the prospect of using the cumbersome dispute-resolution machinery of Brussels or Washington.
There is still much that could derail Palacio's promising start, including Europe's mercurial national politics. But if she sticks to her agenda with the determination and energy shown so far, then there may just be a chance that the current momentum will be enough to carry her initiatives through.
En route to Europe
Loyola de Palacio del Valle-Lersundi was appointed to the European Commission (EC)last September after a career built in Spanish politics. She not only took over as Commissioner for both the transport and energy directorates, but is EC vice-president, responsible, among other tasks, for the administration's relations with the European Parliament, the elected body within the European Union(EU).
Palacio was born in Madrid in 1950.and went on to take a law degree there at the Spanish capital's Complutense University. Her political career started in earnest in 1977, when, aged 27, she headed Nuevas Generaciones, a youth organisation on the centre-right of Spanish politics. She went on to work as the Technical Secretary General for the Federation of Press Associations By 1986 she had become a Senator in Spain's upper house and also vice-president of the Popular Party group. In 1989 she joined the Party's national executive committee. In 1989 Palacio was elected to the Chamber of Deputies and became vice-president for her parliamentary party. After the party came into power, she was appointed as Minister of Agriculture, Fisheries and Food. Her arrival in Brussels was as part of a new team headed by EC President Romano Prodi. The previous regime had stood down after charges of sleaze and incompetence levelled at some Commissioners by the European Parliament. The new appointments were cleared in mid-September 1999 and hold mandates through to January 2005.Source: Airline Business
