Introduction
Old and new challenges
ENAC PNA
Challenges relating to environment and sustainability
Aerospace mobility
AAM
Passenger air traffic forecasts in post-pandemic scenario
Cargo expansion
Passengers with reduced mobility
Increase in disputes relating to air transport


Introduction

This article presents a round-up of the key topics that have been relevant to the Italian aviation sector in 2022.

The year began with positive expectations for the sector, to the extent that it had been referred to as the "year of restart". Indeed, after two years of the covid-19 pandemic, which had weighed heavily on the entire aviation system, the start of 2022 showed the first signs of recovery, mainly due to restrictions being lifted and free travel resuming.

However, the Russia-Ukraine conflict posed a new challenge to the aviation sector: suddenly, it had to address an uncontrolled rise in fuel prices, exacerbated by the need for longer routes due to the impossibility of flying over conflict zones. Further, renewed awareness of the climate emergency resulted in the need to make radical changes to the aviation industry, aimed at balancing technological developments with respect for the environment.

Despite these difficulties, Italy was not unprepared. In fact, throughout the course of 2022, it demonstrated its ability to properly manage the various complex issues affecting the aviation sector, adopting innovative solutions that will make Italy a reference point for innovation, cutting-edge technology and the green transition in the coming years. It has become clear that the long-term sustainability of the aviation sector requires a balance between the environment and the social and economic impacts of human activity.

Old and new challenges

The Italian civil air transport sector represents one of the country's strategic assets: it is essential for the entire tourism sector and, in turn, for the Italian economy as a whole.

In recent years, the airport sector has been heavily affected by the economic and social impacts of the covid-19 pandemic: air traffic suffered a significant drop of more than 70% compared with the pre-pandemic period. In addition, travel habits and conditions changed the composition of passenger traffic in favour of domestic over intercontinental travel. Further, as a consequence of the pandemic, many Italian airlines have become insolvent – some have even been forced to sell out their businesses (for further details, see "Court decides that insolvent Italian airline's partial transfer of employees is legitimate").

Additionally, the civil aviation sector is facing new operational difficulties caused by the ongoing conflict in Ukraine, rising energy costs and climate change. Following the ban on Russian aircraft above many European countries, Russia retaliated by banning European aircraft over its airspace. As a consequence, European airlines have had to add at least three hours of flight time on long routes to connect, for example, Japan, Korea and China. Moreover, the prices of jet fuel have increased, since early 2022, by 75%.

Notwithstanding the above, various international sector organisations have reported that they expect both continental and domestic passenger traffic to grow again. Such growth, however, should be accompanied by broader efforts on the part of the aviation sector to reduce its environmental footprint, provided that the right policies are in place. Italy will continue to have a pivotal role in global routes, and will therefore benefit fully from their development.

ENAC PNA

In October 2022, the Italian Civil Aviation Authority (ENAC) released its National Plan for Airports (PNA). Looking ahead to 2035, the PNA redefines the area of interest of civil aviation, setting out a path of reconciliation of air transport with environmental protection. The PNA is coherent with the themes of environmental sustainability, digitalisation and technological innovation, which are the main pillars of the Italian National Recovery and Resilience Plan.

Italy aims to develop a new generation of the air transport sector, characterised by the concept of "transformational resilience". The aim is to return to the conditions prior to the crises described above and then to evolve further, moving to a more sustainable path of development. More specifically, the entire Italian air transport sector, including airports, is called upon to address:

  • challenges relating to the environment and sustainability;
  • the development of innovative and effective strategies that are resilient to future scenarios which may significantly impact the air transport sector;
  • technological evolution, with the acceleration of digitalisation processes;
  • the impact of climate change; and
  • strategies aimed at reducing the gaps between areas of the country with different levels of accessibility to transport services.

Challenges relating to environment and sustainability

The planned actions in the Italian programme, to be implemented by 2035, are intimately related to the International Civil Aviation Organisation's (ICAO's) programme, which aims at:

  • decarbonisation by 2050;
  • a steady reduction of emissions; and
  • limiting the climate change impacts of international aviation.

In particular, the Carbon Offsetting and Reduction Scheme for International Aviation, adopted by Italy as a substantial tool for the containment of carbon dioxide emissions, foresees the use of sustainable aviation fuel, which is fundamental to the ICAO's long-term aspirational goal.

The Italian aviation sector has undertaken to:

  • work towards an ecological transition of air transport and a new form of mobility; and
  • implement the use of green airport procedures and related certifications (ie, the airport carbon accreditation).

The aim is to reduce emissions in accordance with the objectives of the Fit for 55 programme, which was adopted by the European Commission as part of the European Green Deal to strengthen the European Union's position as a global climate leader. Thus, it is likely that air mobility in Italy will move towards the use of next-generation (ie, hybrid, electric or hydrogen-powered) aircraft.

Aerospace mobility

Space and aerospace are two fundamental and strategic sectors of interest for Italy, given the positive repercussions they could have on the entire economy and the impact of new services and applications offered to national and foreign markets. In particular, sub-orbital space flights constitute the natural evolution of the concept of transport; at the same time, they are the key to fully implementing sustainable mobility.

By seizing the opportunities that the evolution of the global economy will bring in the next few years, the Italian system is preparing for the challenge of moving towards the aerospace transport sector. This requires a strong, yet sustainable, technological innovation process, in accordance with the policy of reconciling economic and technological development with the environment. This is consistent with the guidelines of the NextGenerationEU package and the targets of goal nine of the UN Agenda 2030.

Consequently, it is likely that the next-generation travel activity in Italy will make intense use of aerospace. The goal will be to facilitate rapid travel between two locations by exploiting sub-orbital travel using future hypersonic aircraft. The challenges that this goal presents require the development of new technologies and adequate infrastructures. The new architecture will represent technological innovation in the context of suborbital flights and advanced air mobility (AAM).

As a first step, Italy deemed it necessary to consolidate its activities on the construction of the first continental spaceport. Between 2017 and 2019, the ENAC identified Grottaglie as an appropriate location to build a spaceport. Grottaglie's candidature has been recognised at European level.

The aerospace sector represents a tremendous boost for scientific research and technological progress and development, as well as for the production capabilities of Italian industries. These new horizons for the Italian aviation sector perfectly match the ENAC's strategy and plans.

AAM

A new concept of air travel has emerged that goes beyond classic commercial flights by opening up the use of the new generation of sustainable aircraft and creating an intermodal, accessible, reliable, efficient and safe ecosystem that facilitates mobility with minimal environmental and territorial impact. Accordingly, this new concept has promoted the use of new forms of transport and services, referred to as "AAM" and urban air mobility" (UAM).

AAM includes air systems that:

  • are typically electrically powered;
  • predominantly use vertical take-off and landing; and
  • may or may not have a pilot on board (if there is no pilot, the air system is referred to as an "unmanned aerial system", a category which includes drones).

AAM also includes related infrastructure. AAM will improve the accessibility and mobility of cities, metropolitan areas and territories and the quality of the environment, life and the safety of citizens.

Emerging technologies such as electrification, digitalisation, artificial intelligence, drones and 5G are radically changing the aviation industry, facilitating new aviation paradigms and ways of moving cargo and people in urban and suburban areas that were previously unimaginable. In the coming years, AAM is expected to have a significant impact on the mobility of cargo and passengers in urban and extra-urban areas.

The ENAC's objective is to make available to Italy a model of urban air mobility that is able to provide advanced services to citizens, businesses and institutions, thus making it a reference country in the international context. To address these demands and develop AAM in Italy, the ENAC published the National Strategic Plan for Advanced Air Mobility 2021-2030, which sets out:

  • the national vision;
  • strategic objectives;
  • a 59-point roadmap; and
  • a related business plan.

The strategy focuses on four innovative targets:

  • air taxis;
  • medical and goods delivery;
  • inspection and mapping; and
  • agricultural support.

Passenger air traffic forecasts in post-pandemic scenario

ENAC has published its passenger number forecasts for the next few years:

  • 232 million in 2025 (a compound annual growth rate (CAGR) of 3.1%);
  • 266 million in 2030; and
  • 302 million in 2035 (a CAGR of 2.8%), of which:
    • northern Italian airports are predicted to handle over 135 million passengers;
    • central airports are predicted to handle 83.4 million passengers;
    • the Italian islands are predicted to handle 43.5 million passengers; and
    • southern Italian airports are predicted to handle 39.6 million passengers

Passenger volumes are expected to fully recover from the impact of the covid-19 pandemic between 2023 and 2026.

Cargo expansion

During 2022, the Italian cargo sector grew significantly. The approval of the Milan Malpensa Airport masterplan, with the related expansion of the cargo area, could create more than 5,400 new jobs over the next decade and thus generate an additional production value of €10.2 billion. Currently, the Malpensa cargo area represents an annual production value of €900 million and employs around 2,820 people. More than 14% of Italian to non-EU export passes through the Malpensa cargo area.

The cargo market is a strategic asset for the entire country. During the covid-19 pandemic, while passenger transport suffered a major setback, the cargo sector was a key resilience factor for the national economic and production systems. Malpensa airport, as far as the cargo sector is concerned, has been Italy's leading airport for years, and can also play a strategic role at European level thanks to the growing demand for e-commerce and the dynamism of the Italian business sector.

The ENAC PNA analysed the strengths and weaknesses of the national air cargo network and explored the opportunities to increase the volume of cargo traffic in Italy to improve the country's positioning in the global market scenario. In comparison with the annual ranking of European cargo movements, the contribution of Italian airports is 5.5% (compared with 11.6% for passengers), despite the fact that 11% of extra-EU exports are currently processed by Italy.

Passengers with reduced mobility

The undisputed protagonists of the entire civil aviation sector and the airports system are the passengers. For this reason, the protection of their rights is fundamental to guarantee the efficiency and quality of the entire industry. These safeguards must be even more sensitive and careful in the case of passengers with disabilities.

The assistance provided for passengers with reduced mobility (PRM) must cover all stages of the travel experience. It is essential to offer services within everyone's reach, from booking an airline ticket to boarding the aircraft. In doing so, coordinated action between airlines, handlers and airport operators is needed to ensure a travel experience that respects and provides equal and fair services to all.

Increase in disputes relating to air transport

Recently, the Italian courts have been overwhelmed by disputes relating to air transport. The number of such disputes is set to grow even further, as future compensation cases could arise from airlines' possible failure to meet environmental efficiency targets.

At the Ninth Aviation Law Conference, "Saving the Skies: towards the creation of a secure and sustainable aerial zones", the ENAC emphasised the innovations envisaged by the Draft Annual Competition Law and the need for greater involvement of the authorities in the implementation of alternative dispute resolution (ADR) procedures.

On 10 August 2022, the ENAC and the Italian antitrust authority formed a joint working group to develop and publish specific guidelines on ADR procedures in the air transport sector, with the goal of guiding sector operators in defining ADR procedures and/or in the selection of the ADR body for the out-of-court settlement of disputes arising from consumers and passengers.

As soon as the competition bill is approved, the next step will be to coordinate with the Transport Regulatory Authority, which will have jurisdiction over ADR mechanisms for the entire transport sector.

For further information on this topic please contact Laura Pierallini or Sofia Rinaldi at Studio Legale Pierallini e Associati by telephone (+39 06 88 41 713) or email ([email protected] or [email protected]). The Studio Legale Pierallini e Associati website can be accessed at www.studiopierallini.it.