Est. 2min 16-01-2008 (updated: 28-05-2012 ) planes.jpg Euractiv is part of the Trust Project >>> Languages: Français | DeutschPrint Email Facebook X LinkedIn WhatsApp Telegram The European Parliament has angered airline companies by supporting plans that would allow airports to increase fees in order to pre-finance future infrastructure developments. In recognition of the stranglehold facing European airports as the demand for air transport rises, MEPs backed the inclusion of a new clause giving airports the right to pre-finance future infrastructure developments by increasing their fees on existing users, in a vote on 15 January 2008. The move has angered airlines, who feel they are already paying too much in return for accessing airport facilities and services, which they claim are not always of irreproachable quality. The broad majority of MEPs also agreed that only 67 airports, with an annual traffic of more than five million passengers or accounting for more than 15% of the passenger movements in the country where it is located, should be subject to new Community rules on airport charges. The Commission had originally proposed that all airports managing over one million passengers per year be included in the scope of the directive, thus affecting some 150 airports. But MEPs stressed that smaller airports do not have the power to impose excessive charges on carriers – on the contrary, they are more often likely to lower their charges in order to attract the low-cost airlines that draw high numbers of passengers. Subjecting them to the directive, which includes complex new accounting procedures, would thus put an “unnecessary stranglehold on regional airports”, impacting negatively on regional development and driving up air fares for the travelling public, MEPs concluded. Read more with Euractiv EU secures air security deal, dodges financing issue Attempts to make it compulsory for states to take on at least part of the costs of stringent new anti-terror measures imposed on European airports and airlines have fallen through as members of Parliament bowed into pressure from national governments on the issue. PositionsThe Airports Council International Europe (ACI-Europe) said it was "appreciative" of Parliament’s work to improve the proposal, but that serious concerns remained, notably as regards the scope of the Directive and the issue of the looming capacity crunch. Director General Olivier Jankovec said: "The EU institutions seem to have a difficulty in understanding the dynamics of the European airport market. 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. Applying the Directive to more than 80 airports across Europe due merely to the fact that they meet a fixed passenger traffic threshold is entirely irrelevant. It will impose a costly and unjustified regulatory burden, particularly for fast developing regional airports and emerging hubs. This is not good regulation." He further lamented that the Directive fails to recognise the need for airports to be in a condition to invest in new infrastructure and fears that "ill-defined powers for the independent national regulator set up by the Directive will only incentivise conflicts between airlines and airports, resulting in uncertainty over infrastructure investments and potentially delaying much needed capacity development". The Forum of European Regional Airports (FARE) nevertheless welcomed Parliament's amendments, saying: "Parliament's decision is an important step towards safeguarding the development of regional airports. This is a great success." However, the Association of European Airlines (AEA) said it was disappointed that Parliament - usually a "great champion for customer protection for the individual" had failed to rectify the weaknesses in the Commission's proposal. Instead, it has left airports with a monopoly pricing power that allows them to raise "substantial streams of commercial revenue derived from the passenger volumes that the airlines delivered to them" without passing on the benefits to airline customers through lower fees. The International Air Carrier Association (IACA) criticised the decision to "grant a blank cheque to airports in respect to the choice of Single/Dual Till business model", saying it would be "detrimental to airlines" and "reinforce the monopolistic behaviour of airports". It added: "Most worrying, however, is the decision by the Parliament to allow pre-financing of large airport infrastructure projects through increased airport charges [...] It is economic nonsense [...] This allows airports to start building and shift the risk of investment entirely onto airlines." The European Low Fares Airline Association (ELFAA) also lamented MEPs' failure to impose a single-till business model on airports, saying: "The dual-till principle encourages dominant airports to abuse their position, encourages them to focus solely on retail activity, and is an unfair practice that should simply be outlawed by the legislator." Secretary General John Hanlon further criticised MEPs decision to allow the pre-financing of future facilities from charges on existing users: "Such practice is in breach of the user-pays principle as it forces airlines that may never use the facility to pay for it. Airlines do not pre-finance their future aircraft from charges on current passengers, so why should airports be any different?" The association nevertheless welcomed the reduction of the "unnecessarily wide scope" of the directive, stressing that "competition is the most effective regulator". British Socialist MEP Brian Simpson justified the reduction of the scope of the Directive, saying: "Regulating the majority of airports to catch the big boys, based on an arbitrary passenger figure in a one-cap-fits-all regulation, is a flawed process." Centre-right Irish MEP Jim Higgins (EPP-ED) agreed: "Airports under the five million passenger per annum threshold are subject to much stronger market forces than larger airports, and to subject them to the terms of this directive would put an unnecessary stranglehold on regional airports." Northern Irish MEP Jim Allister agreed that safeguarding regional airports is of "particular concern": "They have been a catalyst for progress in many regional economies: they have opened up markets; they have made the inaccessible accessible; they have been indispensable in economic transformation. And now, true to form, the Commission wishes, effectively, to stifle them with the heavy hand of bureaucracy, burying innovation under a mountain of reporting requirements for which the traveller will ultimately pay." BackgroundThe proposal for a Directive on airport charges, first put forward by the Commission on 24 January 2007, aims to ensure transparency regarding the fees that airports charge carriers in exchange for providing a number of services and facilities, such as terminals. According to the Commission, the increasingly limited airport capacity in the EU has put airports in a dominant position, enabling larger, much sought-after airports such as Charles de Gaulle in Paris and London's Heathrow to demand exorbitant fees – thus pushing up ticket prices. At the same time, however, the draft directive does not go so far as to impose a cap on such charges, recognising that they are a necessary source of revenue for financing infrastructure improvements, tightening security and accommodating rising passenger numbers and growing air traffic. Nor does the directive require airports to give up their "dual-till business model", which is strongly contested by airlines for allowing airports to monopolise non-aeronautical revenues, for example from shops and restaurants, rather than sharing them with the consumers who generate them, in the form of reduced airport charges. Instead, the proposal demands that airports set their prices in a transparent manner and prohibits them from discriminating between airlines; under the new rules, prices may only vary if the service varies. It also requires member states to establish an independent national regulator that will have the power to impose settlements in cases where airlines and airports fail to agree. Timeline 2008: The text will go back to member states in the Council for a second reading. The final adoption of the proposal could come quite rapidly as there are no major divergences between MEPs and ministers after the first reading. Further ReadingEU official documents European Parliament (press release):MEPs set out new charges system for 67 EU airports(15 January 2007) European Parliament:Draft report on the proposal for a directive on airport charges(10 December 2007) [FR] [FR] [DE] Business & Industry Airports Council International Europe (ACI-Europe):Legislative process for EU Directive on Airport charges: European airports still concerned following European Parliament vote(16 January 2007) Forum of European Regional Airports (FARE):FARE welcomes European Parliament's decision on Airport Charges.(15 January 2007) Association of European Airlines (AEA):Airlines want 'level playing field' in relations with Europe's airports(16 January 2007) International Air Carrier Association (IACA):IACA: European Parliament Vote on Airport Charges Reinforces Monopolistic Behaviour by Airports(15 January 2007) European Low Fares Airline Association (ELFAA):ELFAA criticises MEPs for failure to ensure robust regulation of dominant airports(22 November 2007)
