Brussels, 18/01/2008 (Agence Europe) - Amended on 16 January by the European Parliament, the proposal for a directive on airport charges is far from gaining the enthusiasm of those representing the aeronautics sector (EUROPE 9581). “The EU institutions seem to have difficulty in understanding the dynamics of the European airport market”, said Olivier Jankovec of the ACI (Airport Council International). The Association of European Airlines (AEA) considers it “regrettable” that a vote in the European Parliament has not strengthened an EU regulatory initiative to regulate airport charges.
Airline companies consider that the proposal does not address the problem of financing models applied to airports, thus leaving them free to do as they please. Two main models exist at present. The first so-called “dual till” model is the one preferred by airports. It consists of strict separation between sources of revenue (aeronautical activity/commercial activity). The second, the “single till” system, merges revenue from airport charges and that from the commercial activity generated in airports. This makes it possible to use the profits earned from commercial activity for financing costs related to airport activity (the landing or parking of aircraft, for example). The second model is recommended by airline companies, which hope to reduce airport charges, denounce the monopoly position of airports and, according to AEA, want to rebalance the relationship between airports and airlines.
In this context, AEA General Secretary Ulrich Schulte-Strathaus noted that the largest airports “were highly profitable enterprises” with “substantial streams of commercial revenue derived from the passenger volumes that the airlines delivered to them”. Yet all too frequently these benefits were retained by the airports and not passed to their airline customers, who continued to pay high user fees. Mr Schulte-Strathaus regrets that the legislation does not address such issues.
The International Air Carrier Association (IACA) considers airport users “need a genuine economic regulation on airport charges to rebalance the relationship between airports and airlines”. In the absence of such an adequate instrument, IACA believes it would be detrimental to airlines to grant a blank cheque to allow airports to choose between the single or dual till model of financing. “As airports are increasingly developing non-core activities, airlines should be able to benefit from these activities (generated by their passengers) through lower aeronautical charges” (“single till”), IACA added.
Olivier Jankovec of ACI pointed out one must end the system whereby the states concerned (where airports are based) subsidise airline companies through airport earnings, he said, noting in a press release that “at many airports the airlines are the dominant party, able to strongly negotiate, if not dictate, the terms under which they are prepared to operate at the airport”. According to other airport officials, competition between airports (the natural consequence of air traffic liberalisation policies in Europe) is so significant that they are forced to apply competitive levels to charges in order to attract airlines. Income from these charges therefore becomes so low that they cannot cover the costs generated by the airline companies. This forces airports to develop “non-core activities” more often than not combining both models of financing to generate the resources needed for developing new capacities. Mr Jankovec went on to conclude: “That the directive is silent on the need for airports to be given an incentive to invest in time for the new facilities to match demand is puzzling. It shows that the directive not only remains imbalanced in favour of airlines but also fails to reflect that the interests of the airlines and that of the travelling public are not the same”. He nonetheless thanked the European Parliament which has restricted the number of airports covered by the new legislation (67 airports instead of around 150 as initially proposed by the Commission).
The directive aims to establish common principles for the transparent and non-discriminatory lifting of airport charges, based on the system of compulsory consultations between airport operators concerned and users (see EUROPE 9324). According to estimates by the International Civil Aviation Organisation (ICAO), airport charges amount to 4-8% of the operational costs of traditional airline companies. (A.By.).