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General overview of sector

The European civil aviation sector has undergone significant expansion as a result of EU liberalisation and deregulation policies since the late 1980s. This sector accounted for 8.8% of all passenger journeys within the Union in 2007. Since 2005 it has been the second most heavily used means of transport after private cars, coming ahead of buses, coaches and railways.

In 2006 the European air transport sector was made up of 3,450 companies, generating a total turnover of around €120 billion (source: DG TREN, EU energy and transport in figures, Statistical Pocket Book 2009). The EU constitutes a significant share of the global market: 19% of all aircraft movements originated in one of the 27 EU countries in 2007. Moreover, 17 of the top 50 scheduled airlines (“full-service network carriers” – FSNC) were European. In terms of size, however, the North American airlines are bigger than their European counterparts, only three of which are ranked among the top ten global airlines (Air France - KLM, Lufthansa and British Airways). The low-cost carriers, for their part, account for 28% of the seats on offer in the EU. In 2008 there were five European airports among the world’s top twenty (as opposed to 9 in the US and 6 in Asia): London Heathrow, Paris Charles de Gaulle, Frankfurt/Main, Madrid Barajas and Amsterdam Schiphol. Between 1995 and 2007, aviation was the fastest-growing means of transport in terms of passenger numbers (+70.4% over that period, i.e. +4.5% per year on average). What is more, approximately 0.1% of domestic and intra-EU freight (in tkm) and 0.7% of EU foreign trade by weight (21.8% by value) were carried by air in 2007.

In spite of this rapid growth, the sector has had to contend with various difficulties over recent years: the terror attacks of 11 September 2001, the financial and economic crisis of 2008-2009, and the eruption of the Icelandic volcano in 2010.


  • The terror attacks of 11 September 2001 caused air traffic to plummet for about two years. The financial difficulties experienced by the sector’s main players led to a restructuring of the major traditional airlines.
  • Since 2008, civil aviation has had to cope with a sharp rise in oil prices dating from the summer of 2008, followed by the financial crisis and then the ensuing recession. The airlines have reacted by postponing investments and scaling back capacity. A steady growth since 2002 in the number of destinations served has now come to an end. The low-cost carriers have improved their market position, as have the three main global airline alliances (Star Alliance, Skyteam and Oneworld), to the detriment of unaffiliated carriers.
  • Finally, in March 2010, there came the eruption of the Icelandic volcano Eyjafjöll, which sparked a further crisis in air transport by totally closing northern Europe’s skies for several days.


Concerning employment, DG TREN reports that in 2006 there were approximately 408,000 jobs in the sector in the EU-27. Employment in the sector increased significantly in the second half of the 1990s, before contracting just after the turn of the millennium for the reasons given above. However, the jobs trend differs from one market segment to another: during the period 1997-2001 employment grew among the budget airlines and in the top five national markets, while it declined in the other EU-15 Member States and seems to have remained stable overall among the FSNC airlines, in air traffic and in airports.

Even though liberalisation seems not to have brought about any significant reduction in the overall number of jobs (ECORYS), many of the former national flag carriers have been restructured with a view to cutting costs. This is one explanation for the relatively high level of conflict in the sector in certain countries. Pressure on pay in the sector has been mounting, exacerbated by a rise in atypical employment (particularly at the budget airlines) and variable pay schemes. This situation is giving particular cause for concern in the case of ground-handling services. Over and above the issue of trade union representation at the low-cost carriers (especially Ryanair), we are currently witnessing the emergence of “multi-base airlines”: this raises important questions about the labour legislation applying to employees of these airlines and collective bargaining in the sector.

There are many issues of common concern to the civil aviation sector in Europe. Over the past 20 years the sector has undergone a radical transformation, largely attributable to completion of the single market in aviation. Until the late 1980s the air transport market was governed by national regulations, organised around national flag carriers, and state-owned airports. From 1987 onwards the Community pursued a vigorous policy of liberalising and Europeanising the sector by means of three successive legislative “packages”. The first two sets of measures, adopted in 1987 and 1990, were aimed mainly at easing national regulations on fares and capacity. The second also liberalised traffic between an airline’s country of origin and another EU country. The third package, in January 1993, introduced freedom to offer services within the European Union and, as from April 1997, “cabotage” freedom, i.e. the right of an airline based in one EU Member State to operate between two or more points in another Member State. It furthermore harmonised the conditions for issuing operating licences to EU air carriers and ensured full pricing freedom. In 2008 the texts comprising the third package of measures were simplified and updated in a single regulation.

This policy was probably one of the reasons for the rapid expansion in the air transport market over the past 20 years (new air routes up by 170% between 1993 and 2007). It also facilitated the start-up of low-cost carriers, while leading to tougher competition among “traditional” airlines. The sector has seen some high-profile mergers, the largest of all being that between Air France and KLM.

Other European issues include safety and security in Community air transport, passenger taxes, efforts to make air transport more eco-friendly, ease of access to airport services, measures connected with the Single European Sky initiative, and cooperation with third countries (e.g. the signing of an agreement with the United States in 2007 abolishing all restrictions on flights between the US and the EU). The “standardisation” of international aviation policies is likely in the long run to open up the sector to cross-border mergers, multinational companies and global competition.

ETUI and Observatoire Social Européen (2010) European Sectoral Social Dialogue Factsheets. Project coordinated by Christophe Degryse, online publication available at www.worker-participation.eu/EU-Social-Dialogue/Sectoral-ESD