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The European Aviation Safety Agency, based in Cologne, was established 2 years ago to create a central community body to promote and oversee the highest common standards of safety and environmental protection in civil aviation in Europe and to promote this worldwide. Its competences are soon to be to flight crew licensing and operations (foreseen for 2007) and eventually to air traffic management and airports (2010).

However, the agency has experienced many teething problems and as a result many stakeholders are skeptical about the extension of the agency's competences to new mandates. This has stemmed from the fact that the Agency has not only experienced the normal problems associated with starting up a new activity, but also the unusual and unique challenge of centralizing 25 member states' activities in civil aviation safety under one roof. These have included, inter alia, problems with staffing, issues with the National Aviation Authorities relinquishing control of their primary tasks and industry consternation at the introduction at an excessively highly priced "fees and charges regime" introduced in June 2005. The Agency also failed to predict a serious cash flow shortage in the start up of the fees and charges and now will have difficulties balancing its budget for 2005.

This cash flow crisis is based on incorrect budget assumptions. Specifically, EASA is currently functioning at 30% of predicted income with 68% outgoings for 2005. As a result, the predicted budget shortfall is 13 Million Euro by year end. This is apparently due to a miscalculation in the number of minor approvals in 2005. To be fair to the Agency, they have also had difficulty tailoring National Aviation Authorities (NAAs) costs to work and this has contributed to the overall situation.

The big question is how will EASA resolve this situation? Industry is undoubtedly nervous that the solution will be to increase the Fees and charges regime. This regime is already controversial as many stakeholders find the payments unacceptable. Further, this commercially oriented activity is ill suited to the overall mandate of a safety agency. EASA, as a Commission agency, does not have the flexibility of Eurocontrol's route charging scheme. Its institutional status also prevents it from acquiring financial loans as any other normal company might in a start-up phase.

The answer, it was hoped, would come in the form of a Commission subsidy. However, the Commission was not happy to simply hand out financial support to bodies which have not yet proven that they can balance their books, as required.

The net result looks like a revision of the Fees and Charges Regime. Industry is strongly opposed to this as they believe it signals an increase. The EASA advisory board have, as a result, requested assurances of a moratorium on any increases. This assurance has yet to be provided.

ECA is also keeping a watchful eye over the situation to ensure that the current crisis does not have a detrimental effect on EASA's core mandates. It finds that it is crucial that EASA continues to develop, so as not become "pigeon-holed" solely as an airworthiness, maintenance and certification agency. EASA should be the future "one-stop" solution for Aviation safety.

The agency has also instigated a number of cuts within the 2005 budget and by other means that have resulted in a budget shortage of approximately 1M EURO for 2005. Industry stated the need for these new cuts to be integrated into a global document before it would be possible to make an informed decision on the acceptability of this rationalisation. The knock-on effect of these savings could have an undesirable effect on other key EASA activities, ultimately restricting the Agency and undermining the acquisition of new mandates. For instance, ECA could see the provisional EU Council conclusions on Flight time limitations (whereby EASA must carry out a scientific study on fatigue before 2008), deleted from the work programme.

The Agency also presented their plans of how the outsourcing of work to the NAAs should decrease as more work is taken "in-house". However, on questioning the NAAs, they reported that additional work had been placed on them with the creation of EASA and as such they would not be reducing staff. The aggregate cost of regulation must decrease in Europe and industry must do its best to ensure that this happens!

However the first priority for industry, and the pilots in particular, is ensuring that EASA becomes a robust centralised Safety Agency, effectively addressing all safety challenges of today and the future.