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15 June 2020

Around European Aviation in 15 stops/interviews – Portugal in times of Covid-19

Lígia joined IATA in 2017 as Manager, Members and External Relations, after working with the Portuguese Ministry for Economy as an aviation adviser, and on the Portuguese Civil Aviation Authority Board.

She currently sits in Madrid where she covers External Relations dossiers such as environment, taxation, and policymaking in the various aviation areas, representing IATA in working groups in the World Tourism Organization (WTO) and the European Civil Aviation Conference (ECAC).

In addition to these functions, she is acting Country Manager for the Portuguese market, serving as Account Manager for the seven Portuguese IATA member airlines: TAP Air Portugal, Portugalia Airlines, Azores Airlines, SATA Air Azores, Hi Fly, White Airways and Euroatlantic Airways, as well as IATA’s institutional point of contact with the Portuguese Government, Civil Aviation Authority, and all the other aviation and non-aviation stakeholders.    

gia in her own words:

“I have to admit I’m a ‘chocoholic’. It is however not linked to my move from Lisbon to Madrid back in 2017! I adapted perfectly to IATA’s work environment, the city, and Madrilenians. As acting Country Manager, I frequently go back to Lisbon, and am in permanent contact with the same institutions (and sometimes people) I actually worked with the previous 13 years! Not only does this facilitate work relations and builds trust between IATA and the Portuguese stakeholders, but on a personal level, it has enabled me to considerably reduce the saudades of codfish! It also created the perfect work/life balance, and I am now able to enjoy the best of both worlds." 

***

Lígia, thanks for taking the time to answer our questions, particularly in such challenging times.

  • How is the situation for air transport in your country and how badly has aviation been impacted by the Covid-19 crisis?

To give you some context, we need to look at the pre-COVID crisis numbers. Portugal relies heavily on tourism. In past years, air transport and foreign tourists arriving by air accounted for around 6.6% of Portuguese GDP, which translates into some 320,000 direct and indirect jobs supported by the air transport sector.

As of early June, still around 90% of air traffic was on hold. If in 2019 the Portuguese airports recorded above 27 million passenger visits, the scenario is already radically different in the first half of 2020, as airports have remained empty for months.

Fortunately, the societal response to the pandemic has been faultless, allowing Portugal not just to limit the amount of Covid-19 cases, but also to make it one of the first countries to shape its ‘new normal’, including its tourism policy. Thanks to its safe and healthy features, we can expect the country to become one of the world’s leading touristic destinations in time for the 2020 summer holidays. So, don’t hesitate to purchase your flights and book your vacation to Portugal to enjoy your well-deserved summer holiday in a safe, clean, healthy and beautiful environment!

  • How is the government in your country responding to our sector’s crisis?

Overall, the Portuguese Government is managing the health crisis in a very positive way. We braced for impact, but up to now everything has gone better than expected.

However, with regards to aviation, the sentiment is not as positive: we are still longing for state aid, as airlines need immediate financial assistance to weather this global pandemic and its particularly damaging effects on aviation. We call on the Portuguese State to de-politicize any financial intervention and to be active in aiding SATA and TAP groups, Hi Fly, Euroatlantic Airways, and White Airways. The adequate assistance, even for competition fairness and non-distortion purposes, should be proportional to the support already granted by other States to airlines, especially to direct competitors.

It is urgent to facilitate conditions for Portuguese airlines to return to business, all the while restoring passengers' confidence in the Portuguese airlines and tourism. This should be coordinated alongside the removal of border restrictions.  

  • Refunds is a huge issue for our industry due to the financial liability. What is the situation in your market?

Legal norms are, by definition, general, often abstract, but rarely designed for exceptional situations like a global pandemic. Like many other laws that were changed, the EU regulation on passenger rights (EU-261) also needed to be amended to cope with the effects of Covid-19.

The European Commission manifestly ignored the widely approved opinion expressed by most of its Member States (including Portugal) urging for extending to airlines the applicable regime to travel agents regarding vouchers. Given the extraordinary circumstances, it is unreasonable that airlines expend their cash reserves in reimbursements, while passengers could be offered a voucher, and, in the event of an unused voucher, cash reimbursement. This legal provision would be consistent, proportional, fair, and non-distortive, which are indispensable pillars of better regulation, offering legal certainty to both people and businesses.

This democratic approach would ensure financial relief in the exact proportion of the airlines’ needs, independently from governments’ ability or willingness to support air transport. Airlines would retain their liquidity, honor consumer rights, and cope with the pandemic without financially overburdening States. Unfortunately, the European Commission disregarded the States' request.

Displaying resourcefulness, Portuguese airlines offered great conditions to passengers, who increasingly started accepting vouchers. Although not the most optimal solution, it was the best that could be done following the EC's inaction.

  • What do you expect from Portugal’s Presidency of the EU Council H1 2021 in terms of aviation?

Until the end of 2020, it is more than likely the EU will focus on helping Member States cope with the immediate health and socioeconomic crisis. As a result, the Portuguese Presidency will play a pivotal role in the EU's economic recovery phase. With this probable scenario, we can expect Portugal to promote structured policies designed to support the tourism sector in the EU, particularly the much-affected air transport industry.

Portugal will work with Germany and Slovenia (respectively, the preceding and subsequent Presidencies) on a coordinated response in line with the EU Roadmap for Recovery, reassuring consumers and boosting their confidence by ensuring the safe resumption of touristic activities, the promotion of sustainable tourism, and finalizing the revision of Regulation 261/2004 that establishes common rules on compensation and assistance to air passengers.

I also expect to see Portugal addressing the impacts of the Covid-19 crisis on the transport system, notably in the civil aviation sector. The aim should be to strengthen its resilience, seizing the opportunity to involve the aviation industry in discussing and implementing environmentally viable solutions, aiming to improve aviation’s reputation regarding the environment, which is often misunderstood. Aviation is one of the few if not the only truly global industry that pledged a long-term commitment to carbon-neutral growth, intending to use new technology and pushing for sustainable fuels to lower its overall impact on the environment. With or without Covid-19, we intend to scrupulously honor such commitments.

 

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