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Transport in Europe

Transport in Europe. The search for mobility. Transport. Supports all other economic activity An important factor in costs and competitiveness Facilitates trade – important to European integration and SEM Important for other policies

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Transport in Europe

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  1. Transport in Europe The search for mobility

  2. Transport • Supports all other economic activity • An important factor in costs and competitiveness • Facilitates trade – important to European integration and SEM • Important for other policies • e.g. energy, environment, social and economic cohesion, etc. • One of only two sectors explicitly in Rome Treaty

  3. Importance of transport and transport services in Europe • Over 1 million transport-related enterprises • 10.5million jobs • Value-added of over €458 bn • 32% of energy consumption • 40% of public sector investment

  4. Transport trends • 1970: Personal mobility 17 km per day → 38 km per day by late 1990s some stabilisation • 1975 – 2000: European car ownership levels doubled but 2004 enlargements kept car ownership levels down – range from 224 per 1,000 of the population in Romania to 621 in Italy • Congestion and resulting costs are a problem

  5. Transport modes • Road = dominant passenger transport mode – door-to-door flexibility • Rail transport long term decline in transport share – freight and passenger • Rail relatively more important in 2004 accession states • Renewed emphasis given to transport – TENs

  6. EU-28 passenger transport by mode, % bn passenger km Note: Air and sea refer to domestic and intra-EU journeys only Source: Eurostat, EU Transport Policy in Figures: Statistical Pocketbook, 2014

  7. EU-28 freight transport by mode,% bn tonne km Note: Sea refers to domestic and intra-EU journeys only Source: Eurostat, EU Transport Policy in Figures: Statistical Pocketbook, 2014

  8. Evolution of the Common Transport Policy • Pre-SEM – one of most heavily regulated sectors • Despite Treaty of Rome, transport policy dormant • 1982: EP took Council of Ministers to ECJ for failure to fulfil Treaty obligations and won • SEM also highlighted need for CTP

  9. 2011 Transport White Paper sets out long term priorities • Pre-SEM – one of most heavily regulated sectors • Despite Treaty of Rome, transport policy dormant → • 1982 EP took Council of Ministers to ECJ for failure to fulfil Treaty obligations and won • SEM also highlighted need for CTP

  10. Developing the CTP The case of road haulage

  11. Wide range of transformative measures • Market access, e.g. • Mutual recognition of qualifications • Admission to the profession • Removal of quotas • Lifting of cabotage restrictions • Tax measures • Safety measures • e.g. driving hours

  12. Customs controls and regulations • Reduction of formalities • Environmental regulations • Technical harmonisation • Dimensions, weights, technical characteristics • Infrastructure charging?

  13. Review of road haulage changes • Relatively little third country involvement in cross-border trade • Cabotage movements remain low – mostly in France and Germany • Current policy – simplify cabotage rules to remove differences in interpretation and implementations that restrict cabotage movements

  14. Freeing up of road haulage • Facilitates emergence of holistic approach to logistics • across borders • across modes • Emergence of pan-European distribution strategies and logistics companies • Transformational effect on the spatial distribution of economic activity?

  15. Developing the CTP The case of airlines

  16. Pre-SEM airline sector • Large state monopolies • Fares subject to state approval • Access to routes tightly controlled • Cabotage restrictions • No competition and airlines operating at a loss and highly subsidised

  17. By 1997, after 3 airline packages: • freedom to set fares • full cabotage rights • any carrier with community licence could serve any international route in Europe • State aids less of a problem

  18. Problems remain • Airport capacity not keeping pace with demand • Slot allocation issues. Long term solution = more capacity. Short term – greater transparency and higher utilisation • Air traffic management (ATM) issues from fragmented systems → Single European Skies (SES, SES II and SES II+). Gives EU competence in ATM and a series of measures resulting in greater co-ordination of ATM in Europe

  19. Problems remain • Civil aviation is an international business – many flights cross EU-borders • International airline agreements • Since 2002, Commission has right to negotiate airline deals on behalf of EU • Agreements with US (restrictions remain on ownership of US airlines and cabotage in US) • Deals with Brazil, Canada, Australia, New Zealand • 2012 policy to sign agreements with all EU neighbours by 2015 – some successes

  20. Changes in airline sector • Market determines commercial decisions • Decline of idea of national flag carrier as strategic necessity • Restructuring and rationalisation via M&A: • Air France and KLM; British Airways and Air Iberia; Lufthansa buys Belgian, Swiss and Austrian airlines; etc. • Purchase of small airlines as feeders • New business models – emergence of low cost carriers

  21. Low cost carriers – a new business model • Not possible without EU liberalisation • Originally developed Southwest Airlines following US deregulation • Based on driving all cost components down • Vulnerable to energy prices, security, etc. • Some low cost practices spreading to traditional airlines

  22. Contrasting models • Low cost • Direct sales – Internet • No frills • High plane turnaround: simpler boarding, etc. • Regional and secondary airports • Standardised fleet • Higher seating density • Direct flights, short haul, no transfers • Staff incentives • Traditional • Multiple sales channels • Full service • Slower turnaround • International airports • Several aircraft types • Lower seating density • Long and short haul, transfers, greater complexity • High basic costs, fewer staff incentives

  23. Developing the CTP The case of rail

  24. Rail • Long term decline in traffic share • Mostly heavily subsidised state monopolies • Commission sees role for rail to relieve congestion → modal shift as policy objective • Prospects for modal shift – low

  25. EU rail policies • Last mode to experience EU liberalisation • First rail package in force 2003 – opened international freight to competition • Second rail package in force 2004 – safety, interoperability, domestic freight, cabotage, European Rail Agency • Third rail package – agreed 2007 • Opening of international passenger markets • European driving licences, allowing qualified drivers to operate across whole European network • Enhancement of passenger rights

  26. Fourth Rail Package • Proposed 2013 – still under negotiation in 2015 • EU-wide approval, via European Rail Agency, for safety certification and vehicle authorisation • Separation of network managers and train operators reinforced • Liberalisation of domestic passenger markets

  27. CTP priorities • Completion of SEM – rail and short sea shipping • Continuing development of trans-European transport networks • Environment

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