Josette Grech
European law - Lufthansa contests Portuguese ground handling fee
Market access
The fundamental freedom to provide services, enshrined in the EU Treaty, entails the right of persons and undertakings, resident or established in the EU, to carry out an economic activity in any EU member state.
Restrictions which inhibit this freedom are prohibited by the EU, Treaty, whilst the EU institutions have adopted various directives in order to facilitate this freedom and to allow free access to markets by service providers.
A recent judgement of the European Court of Justice (ECJ) dealt with access to the ground-handling market at Community airports. The case was instituted by Lufthansa, a company established in Germany, which was granted a licence by the Portuguese government to carry out ground-handling activities at the Oporto Francisco Sá Carneiro Airport. The main issue in dispute was a fee that was being levied by the Portuguese airport authorities on Lufthansa's ground-handling services rendered to third parties. This so-called ground administration and supervision fee imposed by Portugal on service providers was calculated as a percentage of the turnover made by Lufthansa's ground-handling services. Lufthansa contested this fee by claiming that it prevented its access to the ground-handling market in the Portuguese airport.
The Portugal Oporto Administrative and Customs Court, before which proceedings were brought by Lufthansa, referred the matter to the ECJ for a preliminary ruling on the EU matters in issue.
The ECJ maintained that a 1996 directive dealing with access to the ground-handling market at Community airports allowed the imposition of a fee in return for granting the service provider access to airport's infrastructure and equipment made available to the service provider to provide its services to third parties.
However, such a fee had to be relevant, objective, transparent and non-discriminatory. The court in this case, therefore, had to determine whether the exaction of the fee by the Portuguese airport could be considered as a fee payable in return for access to airport infrastructure within the terms of the directive.
On the one hand, Lufthansa claimed that the fee was such as to inhibit its access to the ground-handling market because it constituted an unnecessary charge, whilst the Portuguese government claimed that the fee was levied in return for use of a public area and a contribution towards its running costs.
The court held that a fee paid for services rendered or by way of contribution towards running expenses is considered as justified. On the other hand if the fee constitutes a second charge on services rendered, then the fee is considered as a restriction on access to that market. Yet, it was up to national courts to apply these principles to the set of facts before it.
This is another instance of the court's efforts in the cause of market liberalisation in the EU, evidently keen on furthering the objectives of directives adopted at EU level.
• Dr Grech is an associate with Guido de Marco & Associates and heads its European Law Division.
Restrictions which inhibit this freedom are prohibited by the EU, Treaty, whilst the EU institutions have adopted various directives in order to facilitate this freedom and to allow free access to markets by service providers.
A recent judgement of the European Court of Justice (ECJ) dealt with access to the ground-handling market at Community airports. The case was instituted by Lufthansa, a company established in Germany, which was granted a licence by the Portuguese government to carry out ground-handling activities at the Oporto Francisco Sá Carneiro Airport. The main issue in dispute was a fee that was being levied by the Portuguese airport authorities on Lufthansa's ground-handling services rendered to third parties. This so-called ground administration and supervision fee imposed by Portugal on service providers was calculated as a percentage of the turnover made by Lufthansa's ground-handling services. Lufthansa contested this fee by claiming that it prevented its access to the ground-handling market in the Portuguese airport.
The Portugal Oporto Administrative and Customs Court, before which proceedings were brought by Lufthansa, referred the matter to the ECJ for a preliminary ruling on the EU matters in issue.
The ECJ maintained that a 1996 directive dealing with access to the ground-handling market at Community airports allowed the imposition of a fee in return for granting the service provider access to airport's infrastructure and equipment made available to the service provider to provide its services to third parties.
However, such a fee had to be relevant, objective, transparent and non-discriminatory. The court in this case, therefore, had to determine whether the exaction of the fee by the Portuguese airport could be considered as a fee payable in return for access to airport infrastructure within the terms of the directive.
On the one hand, Lufthansa claimed that the fee was such as to inhibit its access to the ground-handling market because it constituted an unnecessary charge, whilst the Portuguese government claimed that the fee was levied in return for use of a public area and a contribution towards its running costs.
The court held that a fee paid for services rendered or by way of contribution towards running expenses is considered as justified. On the other hand if the fee constitutes a second charge on services rendered, then the fee is considered as a restriction on access to that market. Yet, it was up to national courts to apply these principles to the set of facts before it.
This is another instance of the court's efforts in the cause of market liberalisation in the EU, evidently keen on furthering the objectives of directives adopted at EU level.
• Dr Grech is an associate with Guido de Marco & Associates and heads its European Law Division.
Advert
Popular Stories
In Discussion
Advert
0 Comments
Post comment
Please sign in or create your Account to post comments.