Revamp of European airports

In the face of intense global competition, the European Commission recently de­cided to take the bull by the horns and embarked upon the arduous task of enhancing the competitiveness of Europe’s airports. It has proposed a number of measures which are geared to increase the capacity of Europe’s airports, reduce delays and improve the quality of services offered to passengers as well as to re-address the discretion enjoyed by member states in so far as noise restrictions are concerned.

The important contribution of European airports to Europe’s economy cannot be ignored- Mariosa Vella Cardona

Five major European airports are currently operating at full capacity, with such number expected to rise to nineteen by 2030. The consequences of this are obviously delays and congestion. Under current EU rules dating back to 1993, slots are allocated to airlines under an administrative system for winter and summer seasons. A “slot” is a permission for an airline to use runways and terminals to operate a flight to or from a congested airport on a specific date at a specific time. Such a system is used in those airports where demand for air travel exceeds the available runway and terminal capacity. There are currently 89 European airports which utilise this system.

Such slots are naturally very important to airlines since they enable them to fly to and from some of the busiest airports in Europe. In terms of current EU rules, a minimum of five slots allocated at the same time and on the same day of the week during a season form a series of slots. If airlines use a series of slots 80 per cent of the time, they can retain it for the next season. If not, these slots are returned to the pool for re-distribution. Fifty per cent of the slots in the new pool go to new entrants. Fifty per cent go to other airlines on a first come first served basis.

The Commission has now deemed that such a system is proving to be inefficient, particularly, since there is no market incentive for airlines to sell unutilised slots to other airlines. Such an option has not been specifically catered for under the current law. The proposed law will provide for the trading of slots between airlines across the EU and establish clear conditions for the transparent trading of slots. Such trading will be supervised by national authorities. The Commission is also proposing to increase the slot utilisation threshold from 80 per cent to 85 per cent and the length of the slot series from the current five to 10 for the winter season and 15 for the summer season. The practical implications of this will be that airlines must exercise greater discipline in utilising slots allocated to them.

Another proposed measure sets out to address the quality and efficiency of services that passengers and airlines receive on the ground before they take off and after they land. Ground-handling covers a wide variety of services ranging from maintenance of aircraft, fuel and oil services and freight handling to passenger check-in, catering, baggage handling and surface transport at the airport.

Current EU laws have already introduced competition in different ground-handling services at airports and permitted companies, other than those pertaining to the airport itself or to the national airline, to offer such services. However, member states were permitted to limit competition to a minimum of two suppliers for four important categories, namely, baggage handling, ramp handling, fuel and oil handling, freight and mail handling. This has meant that the degree of competition in these restricted services varies significantly across member states and the lack of efficiency in the provision of these services is often the cause of flight delays.

The Commission is now proposing to open fully the self-handling market for airlines. Furthermore, the minimum number of service providers in the four categories afore-mentioned will be increased from two to three at large airports. The proposals also aim at ensuring that airports co-ordinate properly all ground-handling services given at any particular airport and establish minimum quality standards to be respected by all service providers. The new law will also seek to strengthen the training and employment conditions of staff, engaged with such service-providers. It will also introduce greater transparency on how airlines and their handlers are charged for so-called airport “centralised infrastructures” such as fees charged by the airport for the use of baggage processing systems.

Another proposed legislative measure seeks to increase the transparency in the process of setting noise-related restrictions at airports.Noise-related operating restrictions are put in place by member states at most large European airports in order to protect people living near airports from the effects of aircraft noise. Under current EU rules, member states are obliged to ensure that decisions on noise-related operating restrictions carefully balance the need for noise protection for residents near an airport against the possible impact of such restrictions on air traffic.

There are still many inconsistencies as to how such restrictions are put in place around Europe. The proposals aim to provide clarity and transparency as to how such restrictions are imposed in order to create a common European approach. The European Commission has been given an ex ante scrutiny role on new noise measures though it does not replace a member state’s final decision. The proposals also update existing legislation in line with technological developments to make it easier for authorities to phase-out the noisiest planes.

Considering that in the past year around 800 million passengers have used EU airports, the impact of these new proposals on airlines and passengers alike cannot be underestimated. The important contribution of European airports to Europe’s economy too cannot be ignored. If these airports are to remain sustainable in the face of capacity and quality challenges, it is essential that action is taken now before it is too late.

mariosa@vellacardona.com

Dr Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is the deputy chairman of the Malta Competition and Consumer Affairs Authority as well as a member of the National Commission for the Promotion of Equality.