EU Rules on airport charges 'important step' says AEA

The Association of European Airlines, representing Europes most important network airlines, has described the adoption of the EUs Airport Charges Directive as an important first step in addressing a serious deficiency in the air transport value chain, but believes that current pricing practices of airports, as yet not covered by the new rules, are seriously damaging airlines.
The directive was introduce on February 19th by the EU. Up to now, major airports have been able to impose price increases on their airline customers on a take it or leave basis. Said AEA Secretary General Ulrich Schulte-Strathaus: Many passengers do not realise that airlines pay for the infrastructure costs in the form of fees and charges; because airlines cannot simply fly to the airport which charges the lowest fees, but to the destinations their passengers have chosen, airports are natural monopolies. Twice in the last ten years, legislative proposals by the EU Commission to tackle the issue of monopolistic airport behaviour were rejected by Member States. This time the EU institutions adopted a balanced proposal which, while by no means ideal, is an important first step in remedying this situation. The absence of regulation concerning airport charges has been particularly burdensome in times of business turndown, when many airports protected their profit margins by increasing fees and charges to compensate for the loss of traffic volume. This was the case in the aftermath of 9/11, and is happening during the current crisis in the industry. Right now, one after another, major airports are pushing up their charges, said Mr Schulte-Strathaus. They do not see the need for sharing the consequences of the economic crisis with their customers, the airlines. Just one example: Copenhagen, profitable to the tune of €160 million in 2008, is seeking to increase its fees by 8% as from 1st April 2009, without any kind of prior consultation. By practicing this kind of profit protection despite plummeting traffic figures they totally ignore the situation of the airline industry. The Directive, he said, would place on the airports an obligation to consult with their airline customers, to provide transparency in their pricing calculations, and subject them to the jurisdiction of an independent national regulator; these principles would be applied throughout the European Union on the larger airports and thereby increase the pressure on all key airports to become cost efficient. Unfortunately, the new rules will not be available to redress the current situation. This legislation will have to be transposed into national law within two years. That is far too late to influence those airports with monopolistic tendencies, said the Secretary General. We have to trust that, in light of the deep and protracted recession we face, Member States will act as if this EU Directive were already applicable. Ultimately, said Mr Schulte-Strathaus, the Directive would more closely align the interests of the airports and their airline customers. It puts a premium on efficiency, to the benefit of both sectors and of the travelling public, he said. It will make air transport more resistant to external shocks and economic downturns something which, as the present crisis is demonstrating, is very much lacking right now.


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