An issue over aviation fuel between Shell Aviation and Enemalta Corporation dating back to 2004 has landed Malta in the European Court of Justice.
The European Commission decided to step up legal action against Malta for not complying with an EU directive on the liberalisation of ground handling services, particularly competition in the provision of aviation fuel at Malta International Airport.
After several warnings, the EU Executive said yesterday it would be referring the issue to the ECJ as it contended that “Incorrect application of the rules results in a lack of effective competition for the supply of fuel at the airport of Luqa, possibly leading to additional costs to airlines and, ultimately, passengers”.
The Commission felt the Maltese authorities were not ensuring independent verification of the separation of accounts while one of the two suppliers of fuel handling services (Enemalta) was also the manager of the storage and fuel supply facilities.
Aviation fuel at the airport is supplied by Enemalta, which also owns the storage facilities.
Following the liberalisation of the market upon EU membership, Shell Aviation had tried to start distributing fuel but although it got a licence it claimed Enemalta was preventing it from carrying on with its business through uncompetitive measures.
According to EU rules, the ground handling services’ market at airports has to be open to competition, including passengers’ check-in, handling baggage and aircraft refuelling.
The legislation allows member states to limit opening up the market to a maximum number of suppliers for four categories of ground handling: ramp handling (marshalling aircraft, loading and unloading food and beverages, etc...), baggage handling, freight and mail handling, and fuel and oil handling.
If a member state chooses to limit opening its market, it must comply with certain conditions, particularly in terms of choosing suppliers (for example, there must be a transparent and non-discriminatory European call for tender). In addition, suppliers that carry out other activities in addition to ground handling services are required to ensure separation of accounts.
Reacting, the government reiterated Malta was in line with the directive’s provisions.
It insisted Shell Aviation was not yet supplying aviation fuel as a result of a dispute with Enemalta over the fee established to use the existing central infrastructure that belongs to the corporation. Enemalta is a fully owned state company in which the government has the majority shareholding.
The government said Malta had repeatedly informed the Commission it had taken all necessary measures afforded to it at law to ensure the directive’s full implementation.
“Besides ensuring the successful conclusion of a tendering process to make sure Malta has, at least, two operators to provide ground handling services at MIA, Malta also appointed an independent examiner to confirm there is proper separation of accounts by Enemalta,” the government said. It added the report of the independent examiner, which has been forwarded to the Commission, so far confirmed the accounts of Enemalta had been effectively separated.