RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/163/Add.1
25 October 2000
(00-4435)
Council for Trade in Services
DEVELOPMENTS IN THE AIR TRANSPORT SECTOR SINCE THE CONCLUSION OF
THE URUGUAY ROUND
PART TWO
Background Note by the Secretariat
Addendum
This background note brings additional information on the developments in the air transport
sector since the conclusion of the Uruguay Round, covering sectors on fuelling, ground handling and
airport services.
__________S/C/W/163/Add.1
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TABLE OF CONTENTS
I. FUELLING..................................................................................................................... ...........3
II. GROUND H ANDLING ............................................................................................................4
1. Introduction................................................................................................................. ..............4
2. Definition ................................................................................................................... ................5
(a) Market Sectors .............................................................................................................. ..............6
(b) Operationa l Sectors......................................................................................................... ............7
(c) Sub-sector Categories ....................................................................................................... ..........7
3. Scope – linkages with the UN Provisional CPC .....................................................................8
4. Regulation and liberalization................................................................................................ ...9
5. Economic evolution – third-party competition – industry consolidation ..........................15III. AIRPORT SERVICES ........................................................................................................... 27
A. A
IRPORT SERVICES AND AIRPORT SERVICE PROVIDERS ............................................................28
1. Introduction:  definitional and classificati on issues.............................................................28
2. Economic and regulatory developments...............................................................................38
(a) Traffic ..................................................................................................................... ..................38
(b) Financial situat ion......................................................................................................... ............40
(c) A significant evolution with rega rd to the ownership of airports .............................................42
(d) The growing impact of competition polic y in the context of the hub and spoke system
and of al liances ............................................................................................................... ..........48
(e) The growing impact of environmental constraints in a context of global congestion ..............48(f) Other significant comm ercial developments.............................................................................49
B.
AN INTERNATIONAL CHARGING SYSTEM UNDER GROWING STRAIN ..........................................52
1. The internationally agr eed charging system ........................................................................52
(a) Article 15 of the Convention on International Ci vil Aviation ..................................................52
(b) Statement by the Council to cont racting states on ai rport charges ...........................................54
2. A system under strain........................................................................................................ .....56
ANY OTHER SUPPORT ING SERVI CES .......................................................................................58
ANNEX I........................................................................................................................ .......................59
ANNEX II ....................................................................................................................... ......................60
ANNEX III...................................................................................................................... ......................69S/C/W/163/Add.1
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I. FUELLING
1. This section will review the elements of fuelling in air transport and will include the
following:  1) the industry structure;  2) storage and distribution;  3) types of fuel and fuelling;  and 4)
the possible linkages to the UN provisional CPC.  Although fuelling is being treated as a separatesector in this review, it is usually considered to be a sub-sector of ground handling and should
therefore be read in conjunction with the following section on ground handling.
2. Fuelling is part of the oil industry's 'down stream' supply chain and the service providers are
specialised in this particular sector.  The operators include oil companies or their aviation subsidiaries,
and ground handlers that specialise in aircraft and airport equipment fuelling.  Due to the specialised
aspects of aircraft fuelling, technical expertise and strict adherence to safety standards is required.
The companies providing fuelling services bid for fu elling contracts (usually three to four years in
duration) from the airport authorities, and compete fo r fuelling contracts with airport users when there
is more than one provider at an airport.
3. The bulk storage of aircraft fuel is usually in fuel farms at remote locations and brought into
the airport via pipeline or with trucks.  There are two types of fuelling procedures in use today:  1)
tanker fuelling;  and 2) hydrant fuelling.  Which one is used depends on the airport, although newerairports tend to use hydrant fuelling, while older airports retain tanker fuelling.  In some cases both
systems are being used in combination.
4. The possible linkages between fuelling and the UN CPC provisional is similar to the list in
the ground handling sector of this review.  Below (Table 1), the categories that are identified highlight
both the distribution (services) and the corresponding goods categories.
TABLE 1
Possible Relationship between Fuelling and the UN CPC Provisional
Management and operation
of fuel tankers for aircraft
and airport motor vehicles74220 – Bulk storage and warehousing services of liquids and gases
In addition there are three possible classifications:
74610 – Airport operation services (excl. cargo handling);  or74690 – Other supporting services for air transport;  or74900 – Other supporting and auxiliary transport services.
Management and operationof fuelling hydrants foraircraft and airport motor
vehiclesSame as above.
Distribution of fuelling
products:61300 – Retailing services of petroleum refi neries products, such as gasoline and 
other motor fuels for internal combustion engines, kerosene, lubricating oil and grease, fuel oil, liquefied petroleum gas put up for retail sale and other products of petroleum refineries.
62113 –  (Commission agents' services)  Sales on fee or contract basis of fuels…62271 – Wholesale trade services of solid, liquid and gaseous fuels and related 
products.
5. The types of fuel that are available at an airport include:  motor vehicle gasoline (ground
equipment);  aviation gas (for piston engine aircraft);  kerosene for jets (Jet A-1, Jet A1, and Jet B2);
and fuel additives for lubrication.
                                                     
1 Jet A is normally only available in the US.  The difference between this and Jet A-1 is the higher
freeze point maximum (-40°C).
2 Jet B can be used as an alternative to Jet A-1 but due to handling difficulties there is only a significant
demand in very cold climates where its be tter cold weather performance is important.S/C/W/163/Add.1
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II. GROUND HANDLING
1. Introduction
6. The ground handling sector encompasses a multitude of services that are required for airlines
to operate in a safe and timely manner, and is subjec t to a range of regulatory structures at the local
and national level of government authority.  To provide a comprehensive review of developments inthis sector since 1993, the following presentation is divided into four sections:  1) the definition and
the scope of ground handling;  2) ground handling and its relationship with non-air transport sectors
that are within the framework of the GATS;  3) the regulatory history between 1993 and 1999;  and 4)
the economic evolution of the sector. This should provide an indication of the diversity and
complexity of the sector, and the impact of liberalising regulations on competition in different
geographical and economic regions of the world.
7. Ground handling has undergone substantial consolidation at the international level over the
past 5 years, thereby becoming a competitive sector of air transport where both airline and non-airline
operators compete for market-share.  The world market for ground handling is estimated at
US$ 11.5 billion
3 and while this sector is expected to be dominated by a handful of independent
global operators within the next couple of years, today there are approximately 300 ground handlers
world-wide.  This is due in large part to the absence of foreign ownership restrictions and liberalthird-party
4 regulatory regimes in the two largest markets in the world (US and EU).
8. There has also been a significant movement away from the traditional airline dominance of
service providers in this sector.  In some cases the airlines have sold off their ground handling
operations (e.g. American Airlines), while others have set up independent subsidiaries (e.g. Lufthansa
created GlobeGround, and Swissair founded Swissport).  Moreover, there has been a significantincrease in the number of truly independent global operators (e.g. Ogden
5, US;  Penauille, France).
9. Airlines are now able to choose between at  least two competing ground handling service
providers at most international airports (Table 8, page 18).  It appears that while ground handling was
a service generally provided by airlines on a reciprocal basis, and was included in bilateral
agreements, the situation has changed drastically in recent years.  According to ICAO "…slightly lessthan 10 per cent of the bilateral air service agreements registered with ICAO contain provisions
concerning ground handling.
6"  ICAO also reports that as of 31 December 1999 there were 194
bilateral agreements containing ground handling pr ovisions, of which 85 are between WTO Members.
No such provisions have been included in 'open skies' agreements signed since 1992.  (ICAO:
Agreements registered with ICAO including ground handling provisions as of 31 December 1999 ).
However, it has not been possible to ascertain at wh ich airports self-handling (airlines providing their
own services) is prohibited, or when permitted, not attainable due to existing contracts or a non-transparent tender process.
10. The ground handling provisions that are usually included in bilaterals tend to be divided into
two categories:  1) reciprocal provisions;  and 2) recognition of the right to perform self-handling or
the possibility of contracting with a third-party.  Each is usually subject to conditions established by
the State in which the services are provided.  Notwithstanding market access restrictions contained inthe bilaterals, market presence can be obtained through the outright purchase of domestic companies,
joint ventures, or partner relationships.
                                                     
3 Airline Business,  Jan 2000, p. 47.
4 Third-party handlers acquire operating licences from the airport authority and then independently
contract with airlines to provide ground handling services.
5 Ogden, one of the largest independent ground handling companies has recently been acquired by
Menzies PLC.
6 Note:  This percentage is calculated on the number of bilaterals that have been registered with ICAO
and not the actual number in existence since many are not registered.  Manual on Regulations,  doc 9626, 1996.S/C/W/163/Add.1
Page 5
11. In this context, discussion of the definition is an important point due to the present trend of
international consolidation, and the emergence of independent global operators.  Moreover, lack of
specificity over what the present ground handling sector includes (see below for the ICAO
description) and the scope of operations indicates that ground handling, or parts thereof, may not be
directly related to traffic rights.
12. The substantial institutional changes that have taken place throughout the ground handling
sector may be summarized as follows:  1) market access for third-party service providers is well
established and competitive;  2) there are few geographic regions where monopolies still exist (see
Tables 8 and 9 for details);  3) market access can be obtained through mergers, acquisitions, or
partnerships (see Table 11 for a recent list);  4) the two largest markets have liberal regulatory
regimes;  and 5) the global market is now dominated primarily by independent global handlers and
not airlines (see Table 7).  In combination, these points highlight a process of dramatic industrialchange that have led to an internationally competitive sector.
2. Definition
13. At all airports throughout the world, ground services are required to enable provision of air
transport services and to facilitate the safe and economical movement of aircraft, passengers, and
goods while they are on the tarmac
7 away from the active runway and taxiways.  Ground handling
therefore includes a multitude of services within a complex operational network.  Adding to the
operational complexity of this sector there are also market structures that range from being very
competitive, to highly protected monopolies.
14. Despite there being a general understanding of what ground handling includes, there appears
to be no internationally agreed definition.  ICAO, and the OECD have developed general descriptionsof what ground handling is, while the International Ground Handling Council (IGHC) of IATA
provides a list of all the sub-sector activities (14 in total) that are part of ground handling, and a
detailed description of what activities occur within each sub-sector.
OECD
"Ground handling is generally understood to include services necessary for an aircraft's arrival and
departure from an airport, but excludes those provided by air traffic control ( OECD DSTI/DOT(2000) ,
p. 15)."
ICAO
The ground-handling function is separated into terminal handling (passenger check-in, baggage and
freight handling) and ramp handling (aircraft handling, cleaning and servicing)  (ICAO Airport
Economics Manual , Document 9562).  ICAO also notes that ground handling generally excludes
maintenance and repair of aircraft, although in some instances, so-called line maintenance may beconsidered as part of ground-handling services.  Services related to ground handling may be provided
at an airport by one or more airlines, by one or more concessionaires, by the airport itself, or by a
combination of any of these means.
                                                     
7 Tarmac and ‘apron’ can be used interchangeably.S/C/W/163/Add.1
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IGHC–IATA
Ground handling services are divided into numerous sub-sectors which are either operational, thereby
requiring operating licences, or administrative.  The operating licences, include all areas within the
airport perimeter (excluding taxi-ways, and active runways) and activities that facilitate the movement
and safety of passengers (pax), goods and aircraft (including commercial, cargo and general aviation).Administrative functions are usually contractual arrangements between airport users (e.g. commercial
airlines, general aviation aircraft, cargo carriers) and ground handling service providers.
15. Although the OECD and ICAO definitions are adequate for a general understanding of
ground handling and who the service providers might be, neither describe or define how the sector is
structured in operational terms or explain market access.  In fact there are several ways to divide
ground handling services, depending on whether one is examining this sector from an operational, or
market access perspective.
16. While ground handling service providers operate under different regulatory regimes in
different countries (see Table 3 for an outline of the regulatory regime), the majority of ground
handlers belong to the IGHC.  These service providers usually adhere to the IGHC's General Ground
Handling Standards and it is through this trade association that general operational standards are
defined and organised.  The IGHC ( Standard Ground Handling Agreement Annex A  - Description of
Services
8) specifies in detail what each individual job function entails, providing a working
understanding of how the licences are allocated throughout the sector.  For the purposes of this
review, ICAO and the OECD definitions are consid ered to be a general framework under which the
entire sector gains meaning, while the IGHC will be used for operational and market definitions.
(a) Market Sectors
17. Although airlines traditionally provided th eir own ground handling services at their home
airport on a reciprocal basis with foreign flag carriers, today these services, and the licences that go
with them, are contracted out to independent service providers (airline and non-airline).  Thus, ground
handling service providers now bid for the various operating licences from the respective airport
authorities in most countries.  Where monopoly markets do exist, the ground handler is usually thenational flag carrier, an independent global operator, or the airport authority itself.  In these cases it
has not been possible to identify where self-handling is restricted, or prohibited.
18. The IGHC breaks down the overall ground handling sector into 14 categories, or sub-sectors
(Annex A – Description of Services ).  It can be seen that the types of services and the corresponding
licences that are allocated to service providers fall into three general categories and are divided by
technical and locational descriptions.  The first are services that operate primarily (but not
exclusively) in the land-side
9, or public areas, and include inter alia  passenger and baggage check-in.
The second could be considered as administrative/technical and the third air-side.10  In each case the
descriptions generally correspond to the ICAO and OECD definitions of ground handling as
mentioned above.
19. Within the range of service providers, there are also three categories of ground handling
operations:  1) self-handling;  2) monopoly providers;  and 3) third-party handling.  Self-handling isoften permitted through bilateral arrangements between States, although in some regions (e.g. the EU)
regulations specify the number of self-handling arrangements permitted at a given airport.  In this
instance the airline (or airport user) is permit ted to provide ground handling services for its own
aircraft, passengers, and cargo.  Monopolies do not permit any choice of ground handlers by airport
                                                     
8  Upon request, copies will be made available at  the Secretariat.
9  Areas in and around an airport terminal that are publicly accessible.
10 Areas in and around an airport terminal that require security passes or checks before entry.S/C/W/163/Add.1
Page 7
users.11  In either situation, there is little or no competition within the market place.  Third-party
handling means that a service provider at an airport is permitted to offer services to other airport users
on a competitive basis.  However, where there is only one third-party handler at an airport the
operator is considered to be a monopoly provider.  Where there are two or more providers at an
airport, competition is considered to exist.  In all three categories there appear to be few countrieswhich do not have a foreign-based handler providing a number of services.
(b) Operational Sectors
20. In operational terms, ground handling service providers can be divided into two broad
categories:  1) full service, and 2) specialised services.  In the first category, the providers offer the
full range of ground services at an airport, while the latter will provide only a certain number of
specified services (e.g. aircraft fuelling, aircraft cleaning, cargo handling, special needs passengers).
A number of situations can occur at any airport:  monopoly providers or third-party handlers can offer
the full range of services; a handler can specialise in a particular service (e.g. fuelling, surface
transport cargo, or security); or full service handlers may only acquire operational licences due to
competition at the airport between third-party handlers.
(c) Sub-sector Categories
12
21. All the operational and administrative categories the exist within the term ground handling
can be found in the IGHC ( Annex A - Description of Services ). In total there are fourteen sub-sectors
that include: representation and accommodation; load control; unit load device (ULD) control;
passenger and baggage; cargo and post office mail; ramp; aircraft servicing; fuel and oil; aircraft
(A/C) maintenance; flight operations and crew administration; surface transport; catering services;
supervision and administration; and security.  Providers of these services will either obtain licencesfor the full range of categories from the airport authority concerned, or will acquire only specific
licences.
22. Due to the individual licencing procedures at any given airport it is not possible to state
definitively what categories are included in each type of licence that will be issued, nor whether self
handling is permitted for specific carriers, all or none.  Nevertheless, all ground handlers must acquireone or more licences and/or permission to self handle, or provide third-party services to others.
23. While domestic third-party handlers are dominant at most airports around the world, it
appears that foreign-based operators are permitted to compete on an equal basis.  To facilitate
competition in the third-party market, the IGHC has developed an interactive directory that is located
at http//:www.iata.org/ighc.  On this site third-party handlers are able to advertise services at each
airport where they are located, and the sub-sector services they are able to provide (see Table 8,
page 18, in section 5 for a detailed list of third-party handlers).
24. The definitions, as laid out above will be used in combination to examine and analyse the
levels of competition in a cross-section of airports and service providers around the world. This
approach will also highlight competitive levels in  each of the sub-sectors, thereby determining where
monopolies or competitive markets exist from macro (ground handling), and micro (sub-sectors)
perspectives.
                                                     
11 The term ‘airport user’ includes inter alia , commercial and cargo carriers, and general aviation
companies.  It  does not include passengers (pax).
12 Members should note that in keeping with the Informal Note by the Secretariat, Job Number 2451,
catering and fuelling are dealt with separately.S/C/W/163/Add.1
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3. Scope – linkages with the UN Provisional CPC
25. While ground handling in the broad sense (all operational and administrative activities) is
directly related to airline operations, some sub-sectors have numerous elements paralleling activities
in non-air transport sectors (see Table 2 below).  This review might be used to clarify whether these
apparent classification linkages might be already covered under the GATS.  The categories of servicesprovided by ground handling is drawn from the IGHC listings on the interactive third-party handler
data-base.
TABLE 2
Possible Classification Linkages Between Ground Handling Services and the UN CPC
Services Provided
(functions)Possible Corresponding CPC Classifications
Representation and Accommodation
(Administration on behalf of airline
clients)74610 – Airport operation Services (excl. cargo handling)
82102 – Renting or leasing services involving own or leased non-
 residential property
82202 – Non-residential property management services on a fee or contract 
 basis
Load Control, DCS, and
Communications
(Aircraft Load control, Departure Control
Systems)74610 – Airport operation services (excl. cargo handling)
74900 – Other supporting and auxiliary transport services  7522 – Business network services …Dedicated networks services…
  7523 – Data and message transmission services
ULD (unit load devise) Control
(Administration/Storage)74110 – Container handling services
Passengers (Pax) and Baggage
(General, Departure, Arrival, Baggage
Handling, Remote/Off Airport Services,
Intermodal Transportation)74690 – Other supporting services for air transport
74190 – Other cargo handling services74900 – Other supporting and auxiliary transport services
Cargo and Mail
(Cargo Handling (general);
Outbound/Inbound Cargo, Transfer/transit
Cargo, Post Office Mail)74110 – Intermediary transportation between the aircraft and the terminal 
 building
74210 – Storage services of frozen or refrigerated goods
74290 – Other storage or warehousing services
74900 – Other supporting and auxiliary transport services
Ramp
(Marshalling, Parking, Ramp to Flight
Deck Communication,Loading/Embarking,Unloading/Disembarking, Starting, Safety,
Moving Aircraft)    741 – Cargo handling services
74190 – Other cargo handling services
74610 – Airport operation services (excl. cargo handling)74690 – Other supporting services for air transport.  Aircraft towing services 
 are also included
74900 – Other supporting and auxiliary transport services
71130 – Pushing or towing services
Aircraft (A/C) Servicing
(Exterior/Interior Cleaning, Toilet/Water
Service, Cooling/Heating Aircraft, De-
Icing/anti-icing and snow and ice removal,Cabin Equipment/Material storage)74900 – Other supporting and auxiliary transport services
74690 – Other supporting services for air transport.  Aircraft cleaning and 
 disinfecting services
35430 – anti-freezing preparations and prepared de-icing fluids
Fuel, Oil or De-icing62113 – Sales on a fee or contract basis of fuels…
74220 – Bulk storage services of liquids or gases62271 – Wholesale trade services of solid, liquid and gaseous fuels and 
 related products (Goods classified in CPC 11-13, 33)
(see section I on page 3 for further information)
Aircraft (A/C) Maintenance
(Routine/non-routine services, Material
handling, Parking and Hangar space)74690 – Other supporting services for air transport
Flight Operations (Flt Ops) and Crew
Administration
(Preparation of arrival and departure
documents, Inflight assistance, Inflight
dispatch)74690 – Other supporting services for air transport
Surface Transport
(General and special road transportation at
the airport and interurban)71214 – Interurban special transportation
71233 – Transportation of containerised freight
71235 – Mail transportation
71239 – Transportation of other freightS/C/W/163/Add.1
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Services Provided
(functions)Possible Corresponding CPC Classifications
Catering Services 74690 – Other supporting services for air transport (see document
S/C/W/163, page 52, on catering for further details)
Supervision and Administration 74610 – Airport operation services (excl. cargo handling)
74690 – Other supporting services for air transport
Security
(Passenger and Baggage screening
reconciliation, Cargo and Post Office
Mail, Catering and Aircraft Security)74610 – Airport operation services (excl. cargo handling)
87305 – Guard services
87309 – Other security services
Source:  IATA Council of Ground Handling (CGH) interactive directory.  www.iata.org/ighc.  Provisional
Central Product Classification .  Series M No. 77.  United Nations.
26. Included in this list are fuelling and catering, and although both are considered to be elements
of ground handling services, they have been categorised separately for this review.  Details of catering
can be found in S/C/W/163, and fuelling in the previous section of this secretarial note.  This
separation was not intended by the Secretariat to suggest that fuelling or catering are separate fromground handling:  it merely resulted from follow ing the earlier format laid out in S/C/W/59,
S/C/W/129, and Job Number 2451.  However, by treating two of the 14 ground handling subsections
as separate sectors, Members may wish to consider separating other sub-categories into those which
are directly related to traffic rights, and those which are not.
4. Regulation and liberalization
27. Ground handling has operated in substantially the same institutional form for many years and
incorporates all levels of institutional structures fr om the multilateral to the local.  Both prior to and
since 1993 the basic framework has remained fundamentally the same.  Ground handling guidelines
are established by ICAO, bilateral agreements provide market access, national aviation authorities set
and enforce regulations, and airport authorities im plement regulatory standards (see Table 3 below).
“This regulatory activity [took] into account provisions on ground handling contained in bilateral air
services agreements, and where applicable, measures of regional multilateral regulatory authorities,
such as the European Commission" ( ICAO Manual on Regulations , p. 4.7-1).  Most frequently,
ground handling has operated on the basis of national monopolies and/or duopolies.  In many
countries throughout the world, monopoly service providers were the airport authority or the national
flag carrier, and self-handling at international airpor ts by the airlines was the exception rather than the
standard.  In short, the international market primarily consisted of mutual handling between airlines,and was based on the bilateral agreements between two States.S/C/W/163/Add.1
Page 10
TABLE 3
Traditional Institutional Framework for Airport Regulations
       ICAO
   (Establishes
   Guidelines)
      Bilateral Agreements
       (Provides Market Access)
- Industry Associations
National Aviation Authorities - Regional Trade Blocs
Sets and Enforces Regulations and - Domestic Airlines
      Provides Market Access*)
- Local Interest Groups
     Airport Authorities
   (Implements Regulations)
Source:  World Bank Technical Paper Number 313. (Mar ket access at the National level in addition to the
bilateral level has been added by the WTO secretariat).
28. Throughout most airports in the world, national policies toward the ground handling sector
have been marked by nationally based restrictive policies (the US being a long-standing exception).
In these cases, the ground handlers were either the airport authorities or the national flag carriers, and
access to self-handling by airlines was usually attained through bilateral air services agreements.
29. The cumulative effect was very few independent operators13, no global operators14,
(independent or airline affiliated), and limited self-handling at foreign airports.  The independent
corporations were few in number and were primarily US-based corporations.  Thus, the emergence of
independent third-party ground handlers in the US was due to the large market and the US policyfavouring a competitive air transport sector, including infrastructure sectors like ground handling.
30. Over the past 5 years there has not been a fundamental shift in the institutional framework
found in Table 3, but rather a liberalization of market access at the national level in many States.
States appear to have adopted the principles set out by ICAO in a special 'model clause for bilaterals',
agreement.
15
"Each Party shall authorize air carrier(s) of the other Party/Parties, at each carrier's choice to:
(o) perform its own ground handling services;
(p) handle another or other air carrier(s);
                                                     
13 Independent ground handlers during the early 1990s of note were US-based DynAir, and Hudson
General or Ogden.
14 Global ground handlers include inter alia  fully independent airline subsidiaries like GlobeGround
and Swissport or non-airline independents like WFS or  Ogden Aviation.
15 See S/C/W/59 Annex 2 p. 53-54 for the text.  Panel recommendations are found in the same Annex
on pages: 51-53.S/C/W/163/Add.1
Page 11
(q) join with others in forming a service-providing entity;  and/or
(r) select among competing service providers."
This clause was intended to assist regulatory authorities in removing restrictions and moving
to a competitive environment.
United States
31. The US is the largest ground handling market in the world, and has had an open, competitive,
and reasonably priced market throughout the period under review.  The competitive market place has
fostered the development and growth of independent (non-airline) ground handling corporations, a
competitive third-party market and liberal access to self-handling by airport users.  The US maintains
a policy of promoting competition in the third-party market (see Table 8, page 18 for details),sanctions and inward investment.  The regulatory standards are set at the national level, and are
implemented by the locally controlled airport authorities.
"The Airport and Airway Improvement Act of  1982 (AAIA) as amended, provides that as
a condition for approval of an airport development project contained in a project grant
application, the Secretary of Transportation shall receive certain assurances.  One of theseassurances is that “each carrier using the airpor t shall have the right to service itself or to
use any fixed-base operator (FBO) that is au thorized by the airport or permitted by the
airport to service any carrier at such airpor t.”  All commercial airports in the US have
accepted federal funds under the AAIA and therefore have signed agreements that include
these binding grant assurances.  The AAIA also state that “there will be no exclusive rightfor the use of the airport by any person providing, or intending to provide, aeronautical
services to the public.” (United States, WT/TPR/S/56)."
32. However, until recently, and through corporate acquisitions, entry by foreign corporations
into the US third-party market has never penetrated widely, particularly in the ramp or airsideoperations.  Nevertheless, most international airlines use third-party handlers in the US rather than
utilising self-handling options because of economic factors attributed to lack of frequency into an
airport and the associated cost structures of setting up ground handling operations.
European Liberalization
33. In the second largest ground handling market, the European Union, ground handling remained
dominated by monopoly suppliers and was the preserve of the nationally controlled airport authoritiesand/or the national flag carriers.  Most often, the national flag carrier established reciprocal handling
arrangements with other flag carriers, sometimes under the auspices of State negotiated bilateral
agreements.  Where bilaterals provided for self-handling or third-party handling, the foreign-
designated airlines need not be handled by the host-country flag carrier.
34. In 1993, the establishment of the European single market began the first and very limited
opening of the ground handling market.  However, as  indicated in Tables 4 and 5 change did not
occur immediately, and in some instances not at all.   However, as highlighted in these same Tables,
the 1996 Council Directive had a significant effect on the European market that eventually led to the
expansion of global operators.  This occurred primarily through mergers and acquisitions both within
Europe and beyond (this will be discussed in s ection 5 below), and the creation by the SairGroup of
Swissport and Globeground
16 by Lufthansa.
                                                     
16 GlobeGround was previously named Lufthansa Airport & Ground Services (LAGS).S/C/W/163/Add.1
Page 12
TABLE 4
Organization of  European Ground handling, 1993
Self-Handling
AllowedThird-Party Handling
AllowedAt Least Two
Handlers to ChooseWhere
Wha tPax Cargo Ramp Pax Cargo Ramp Pax Cargo Ramp
AMS /g52/g52 /////// /g52/g52/g52
BRU /g52/g52 /////// /g52/g52/g52
PAR * /g52/g52 /g52 /g52 /g52
LON* /g52/g52/g52/g52/g52/g52 /g52 /g52 /g52
CPH /////// ///////
DUB /g52/g52/g52 /////// /g52 /////// /g52
MAD /g52/g52/g52 **** **** ****
LIS /g52/g52/g52
MIL*
ROM*
ATH /g52/g52/g52
STO /g52/g52 /////// /g52/g52/g52
ZRH /////// /g52/g52/g52
VIE /////// ///////
FRA /g52/g52 /////// /g52/g52 /g52
MUC /g52/g52/g52/g52/g52 /g52 /g52
*  Note:  These abbreviations are not airport designator c odes since there is more than one airport in each city.
/g52 Permitted **** 2ND HANDLER TO BE APPOINTED
Not Permitted /////// PERMITTED WITH CONDITIONS
Source:  AEA Position Paper on Handling Services .  Le Thi Mai Co-ordinator Regulatory Affairs  (0.08.93)
TABLE 5
European Market 2000
Self-Handling
AllowedThird - Party Handling
AllowedAt Least Two
Handlers to ChooseWhere
Wha tPax Cargo Ramp Pax Cargo Ramp Pax Cargo Ramp
AMS /g52/g52 /g52/g52/g52 /g52/g52 /g52
BRU /g52/g52 /g52/g52 /g52
PAR * /g52/g52 /g52/g52 /g52/g52 /g52
LON* /g52/g52/g52/g52/g52/g52 /g52/g52 /g52
CPH /g52/g52 /g52
DUB /g52/g52/g52/g52/g52/g52 /g52/g52 /g52
MAD /g52/g52/g52/g52/g52/g52 /g52/g52 /g52
LIS /g52/g52/g52
MIL* /g52/g52 /g52/g52 /g52/g52
ROM* /g52/g52
ATH /g52/g52/g52/g52 /g52
STO /g52/g52 /g52/g52 /g52
ZRH * /g52 /g52/g52/g52 /g52/g52 /g52
VIE /g52/g52
FRA /g52/g52 /g52** /g52/g52 /g52** /g52/g52 /g52**
MUC /g52/g52/g52/g52/g52/g52 /g52/g52
* Third-party handler is Swissport
** FAG is the only ramp handlerSource:  IGHC, Interactive Directory.  http//:www.iata.org/ighc.S/C/W/163/Add.1
Page 13
35. Figures for 1993 representing various regions or a broad spectrum of countries have not been
located beyond the 16 major city centres within the European Union (Table 4 above).  However, due
to the size of the European ground handling market both tables are representative of the entire
European market for the period in question.
36. Tables 4 and 5 are intended to represent the overall ground handling structure, and not to
describe arrangements in individual sub-sectors.  It is therefore not possible to identify any
monopolies in sub-sectors, or the extent to which the global corporations have acquired individual
operating licences.  For example, at London Heathrow there are three aircraft cleaning companies,
two of which have been purchased by Swissport (for a detailed breakdown of the number of foreign
operators in any given sub-sector category see Table 8).
37. In 1996, the EU Commission issued a Directive on ground handling that was intended to
promote liberalization of ground handling in the same manner as the airline sector had beenliberalized.
17  It acknowledged that smaller airports or those with physical constraints (e.g. Düsseldorf
reconstruction due to a fire) may be unable, in the short-term, to open all airports to unrestricted
competition.  The basic purpose of the directive was to open-up the third-party market to handling
companies and to give airlines freedom to self-handle.  The liberalising standards are based on the
number of passengers and/or the volume of freight that passes through a given airport in a one-yearperiod, providing a phasing-in period for airports to adapt to the new regulations.  Moreover, it also
gives the authorities some powers to prevent a free-for-all.  The number of third-party suppliers may
be restricted, but there must be a choice of at least two suppliers in each main category of handling
operations (baggage, ramp, fuel, and cargo). (http//:www.gsetoday.com/back-is/past-ar.htm).
38. After 1 January 2001 at least one of the two suppliers must be entirely independent of both
the airport operator and any airline that has more than 25% of the traffic at a particular airport (there is
a one year delay in the deadline under certain circumstances).  The Directive also provides for
transparent accounting by handling suppliers, and forbids cross-subsidization by other activities.
39. In cases where specific constraints such as lack of space or capacity make it impossible to
open the market and/or implement self-handling, the Member State may:
a) limit the number of suppliers;
b) reserve to a single supplier one or more categories of handling;
c) reserve self-handling to a limited number of airport users (provided that those users
are chosen on the basis of relevant, objective, transparent and non-discriminatory
criteria;  or
d) ban self-handling.
40. The airports concerned must:  a) specify the category or categories of ground handling
services for which the exemption is granted and the specific constraints of available space or capacity
justify it;  and b) provide a plan of appropriate measures to overcome the constraints.  The Directive
lists 11 separate categories or sub-sectors of ground handling (see Annex I) that generally corresponds
to the IGHC list in Annex A.
41. One of the important aspects of the Directive pertains to the definition of self-handling since
it gives clarity to whether or not wholly independent airline subsidiaries can be considered as third-
party operators.  The Directive opted for a strict definition of self-handling in order to avoid
                                                     
17 Official Journal of the European Communities  L 374 Vol. 30, 31 December 1987.  Council
Regulation (EEC) No 3975/87 of 14 December 1987 laying down the procedure for the application of the ruleson competition to undertakings in the air transport sector.S/C/W/163/Add.1
Page 14
agreements which could allow handlers to supply services without going through the public tender
procedures and so distort competition.18
Article 2 Definitions:
"(f) ‘self-handling’ means a situation in which an airport user directly provides for
himself one or more categories of ground handling services and concludes no
contract of any description with a third-party for the provision of such services;  for
the purposes of this definition, among themselves airport users shall not de deemed
to be third parties where:
- one holds a majority holding in the other, or
- a single body has a majority holding in each."
Source:  Council Directive 96/97/EC
42. The impact of the Council Directive became immediately apparent in the third-party handling
sector whereby a competitive market began developi ng.  This in turn spawned the substantial growth
of independent third-party operators and the growth of global ground handling companies.
43. The issue of reciprocity is also dealt with by the Directive in paragraph 26:
"Whereas it is justified that the rights reco gnized by this Directive should only apply
to third-country suppliers of ground-handling services and third-country airport users
subject to strict reciprocity;  whereas where there is no such reciprocity the Member
State should be able to suspend these rights with regard to those suppliers and users;"
Source:  Council Directive 96/97/EC
India
44. International market access to the Indian ground handling sector has been structured in the
same manner as many other States.  The Airports Au thority of India, created in 1967, is the regulatory
body overseeing and enforcing national legislation, and the majority of ground handling services were
controlled by Air India, and Indian Airlines.  Privately owned Cambata Aviation was never able to
acquire more than 20 to 25% of the market share.  However, the Indian Government has begun taking
steps toward privatisation of their air transport sector (including ground handling).
45. Broad features of the new policy include permitting up to 74% foreign direct investment
(FDI) in airport development, encouraging public and private partnerships, and permitting ground
handling and special services to be offered by the private and public sector
(http//:www.gsetoday.com/back-is/1/99/India.htm).
Japan
46. Although Japan has taken initial steps toward deregulating the domestic air transport sector,
there have been only limited market access increases through bilateral arrangements.  This includes
the ground handling market.  Presently the two major international airports (New Tokyo - Narita and
Kansai) are mainly government-owned and any person who intends to provide auxiliary services, such
as ground handling, must submit an application for approval by the Director of the Regional Civil
Aviation Bureau. (WT/TPR/S/76).
                                                     
18 Airline Alliances & Smaller Independent Handlers in Europe .  Bob Schmitz, EU Regulatory Affairs
Consultant.S/C/W/163/Add.1
Page 15
APEC19
47. APEC members are developing a plurilateral framework that encompasses ground handling as
‘doing business’ matters within the framework of a broad policy of Air Services.  This project
envisions liberalising air transport traffic rights, and through this process increasing the competition inthe ground handling sector, in addition to permitting self-handling by participants.  However, unlike
the Council Directive (1996) that legislated liberalising grounds handling specifically, the APEC
States have not detailed the specific sub-sectors of ground handling.  However, when looking at the
number of third-party operators at airports in this region (Table 8 below) it is clear that there are few,
if any, monopoly operators.  Nevertheless, it has not been possible to identify where self-handling is
permitted or prohibited.
5. Economic evolution – third-party competition – industry consolidation
48. The ground handling sector can be evaluated from two distinct perspectives.  First, it is both
an essential infrastructure activity, and part of the 'doing business' chain for air transport, and second,
it is a sector that has been undergoing significant consolidation over the past five years (particularly
the last two).  Unlike airline ownership, ground ha ndling corporations are not limited to foreign
ownership restrictions in many parts of the world, and foreign operators are able, in many instances,to compete with national airlines or airport service providers at their airports.
49. It is estimated that today there are approximately 300 ground handling service providers
(Airportworld , June/July 2000), of which only eight operate in more than two countries.  Among this
group, two are owned by airport operators (Frankfurt Airport's Aviation Ground Service, and
Singapore Air Terminal Services), two are fully inde pendent subsidiaries of airlines (Swissport and
GlobeGround) and four are non-airline independent co rporations (WFS, Servisair, AviaPartner, and
Ogden).  Tables 6 and 7 provide a comparative overview of the independent global handlers between
1993 and 2000.
TABLE 6
Independent Ground Handlers 1993
Ground Handling
CorporationsAirports Employees HeadquartersTurnover
(US$ Million)
DynAir519
(US)5600 US 519 (US)
Jet Aviation14
(12 worldwide)331 Switzerland 233
Belgavia
(Aviapartner Grp)4
(Europe)1350 Belgium 119
Ogden85
(worldwide)14000 US 28.5
Servisair55
(worldwide)UK
GroundAir Services8
(Germany)350 Germany 4.9
Source:  "Handling Focus", Airport Support , September 1993
                                                     
19 Steering Committee on More Competitive Transpor tation Industry (including infrastructure).
http//:iot.gov.tw/apec_tptwg/TPT/tp.S/C/W/163/Add.1
Page 16
TABLE 7
Independent Global Ground Handlers 200020
Ground Handling
CorporationsAirports Employees CountriesClient
AirlinesHead-
quartersOwner-
shipTurnover
1998
(millions)
Swissport (purchased
DynAir in 1999) *119 +13,00023
(5 continents)+320 Switzerland SAairGroup 625
Frankfurt Airport 12,573 8 GermanyFrankfurt
Airport486
Ogden Aviation **
(Provisional purchaseagreement by Menzies
PLC, August 2000)1455,500
(2000 more
in joint
ventures)20
(5 continents)500USA
(UK)Ogden Corp 310
Servisair 101 10,000 11 375 UK/France Penauille 305
GlobeGround (purchased
Hudson General in 1999)85 17,00023
4 continentsGermanyLufthansa
Group260
AviaPartner27
(1996-8)+4000
(1996-
3,425)6
(Europe only)BelgiumVerougstaete
family
(75%)243
Worldwide Flight Services
(WFS) (acquired by CastleHarlan III March 1999 and
purchased Miami Aircraft
Support and AerolinkInternational in 1999)98 10,000 14 +300 USACastle
Harlan
Partners III220
ASIG 41 3,900 5 USARanger
Aerospace170
*  Ogden is also a partner of ADR Handling.  This is a joint venture between Ogden and Aeroporti di Roma.
** Inter alia , Swissport affiliates or partner companies as of May 2000 include:  Aerogate Munich, Air Littoral
Assistance, DAHACO, Dutchport, Havas, Miascor, NFS, Q.A.S and Serlipsa.
Note:  Swissport turnover includes DynAir and GlobeGround figures include Hudson General, both of which
were acquired in 1999.
Note:  Cargo Service Center Holding B.B, is not listed as  a supplier since they only provide ground services for
cargo.
Sources:  Airline Business   January 2000.  http://www.asig.com;  http://www.servisair.co.uk;
http://www.swissport.com;  http://www.frankfurt-airport.com;  http://www.globeground.com, A New Age of
Global Ground  Handling?  Going it alone in vastly different markets.  Ogden Aviation. Bob Kievits, Managing
Director. 30 November 1999.  Regulatory Affairs Review  Volume 28 No. 3  IATA 1999.  The Swissport Profile.
Swissport.  May 2000.
50. The evolution of the international market structure between 1993 and 2000 is noteworthy for
two reasons.  First, the number of international airport locations where third-party handling exists has
expanded, and second, the turnover per annum of each of the corporations has increased substantially.
The single most important development is the liberalization brought about by the EU Directive in1996.  Once it became effective, monopolies for the most part were replaced by competition between
third-party handlers.
51. Despite the dynamic activity in both regulatory and economic terms, the discussion has
focused on ground handling in broad terms.  At this level, it is not possible to identify clearly where
monopoly situations continue to exist, or how the co mpetitive markets are restricted in some areas and
not in others.  Table 8 below has been constructed from the IGHC interactive data base in order to
provide a detailed view of all the geographic regions of international airports, and to examine thedegree of competition between third-party operators.  It is a detailed list of third-party handlers at 65
airports in the major geographic regions of the world and it should be noted that all third-party
                                                     
20 Only Swissport and GlobeGround are airline subsidiaries.S/C/W/163/Add.1
Page 17
handlers are included.  There is no separation between those who provide only specialised services,
full airport services, general aviation, commercial carriers (passenger, cargo, or combi).  The only
exception is where there is a third-party handler providing cargo-only handling.
52. It is significant to note also, that Table 8 highlights the presence of foreign market access, and
competition in a substantial percentage of airports in many geographical regions.  Outside Africa andthe Middle East the dominant trend appears to be that:  a) competition exists;  b) foreign investment
through acquisitions, mergers, or joint ventures is widespread;  and c) the number of domestic
handlers usually exceeds foreign handlers.
53. This exercise was undertaken to provide Members with a detailed breakdown of third-party
ground handling service providers to show that while discussion of ground handling is usually in the
context of the combined services, there are in fact varying levels of competition at the sub-sector
level.  In order to give meaning to the numbers in Table 8, two further tables (Tables 9 and 10)provide three types of information.  First, the average percentages showing where ground handling
monopolies (in the broad sense) exist.  Second, the competitive levels of international third-party
competition, and third, there is a comparison between airports at the sub-sector levels.
54. The selection of airports is based primarily, although not exclusively, on IGHCs ‘airport
connectivity monitor’.  This provides the basis for a list  of airports that handle international traffic.  In
some instances, the airports are the major international hubs for a given country, while in
geographically large countries like the US or Canada, the airports with the highest connectivity factors
have been included.  In particular, the table highlights the level of foreign-based competitors
throughout the world for the sub-sector areas in the ground handling market.  It also provides an
overview of the amount of international competi tion between national and foreign based third-party
handlers that presently exist, highlighting the sharp contrast between 1993 and 1999.S/C/W/163/Add.1
Page 18TABLE 8:  Third-party Ground Handling Service Providers 2000
(For a brief description of each sub-sector service, see the bo ttom of this table.  The letter ‘T’ denotes Total and the letter  ‘F’ denotes Foreign Operators)
RampCargo/
MailPax/
BaggageA/C
ServicingA/C
Main-
tenanceLoad Control/
CommsULD
ControlSurface
TransportSecurityFlt
OpsAdmin/
Super-
visionRepresent-
ation/Accom-
modationForeign
OperatorsWhere
Wha tT
O
T
A
LT F TF T F T F TF T F T F T F TFTFTF T F
North America
LAX
Los
Angeles31 16 3 19 5 19 3 17 2 12 3 18 4 15 4 10 1 9 2 13 3 23 7 19 59 (Fiji, NL, UK, CH,
Taiwan, Belgium,
Australia, Japan,
Germany)
SFOSanFrancisco26 13 3 16 4 19 3 14 3 11 3 18 4 16 4 7 1 9 3 13 3 13 4 18 4 4 (NL, Japan 2, CH)
JFK
New York25 9 2 16 6 17 6 9 3 9 2 17 7 14 6 4 0 71
car-
go
only1 261 66 1 7 79 (Ireland, NL 2,
Taiwan, Iceland,
Nigeria, Japan, CH,
Germany)
ORDOrlando20 8 1 11 2 11 2 6 1 6 2 12 2 11 2 7 0 61
car-
go
only82 1 3 3 1 3 35 (NL, UK, Japan,
CH, Germany)
IAHHouston1 5 7 1 1 1 2 7171 5 08 2 7 2 50 51
car-
go
only3081 81
cargo
only3 (NL, CH, Germany)
ATL
Atlanta15 6 0 11 2 8 0 7 0 4 0 81
cargo
only71
cargo
only60 51
car-
go
only4092 1 0 2 2  ( N L ,  U K )
DFW
Dallas1 4 9 1 1 0 1 1 1 281 4 17 0 6 0 60 1 0 5 0 8 1 7 03 (CH, Germany,
UK/France)
MSPMinnea-polis77 0 60 7 0 7 0 20 5 0 4 0 3 0 204060 5 0 0
Canada
YYZ
Toronto14 8 4 11 5 9 4 7 3 6 2 9 4 10 4 4 1 3 2 6 1 10 4 11 58 (US 6, NL,
Germany)S/C/W/163/Add.1
Page 19RampCargo/
MailPax/
BaggageA/C
ServicingA/C
Main-
tenanceLoad Control/
CommsULD
ControlSurface
TransportSecurityFlt
OpsAdmin/
Super-
visionRepresent-
ation/Accom-
modationForeign
OperatorsWhere
Wha tT
O
T
A
LT F TF T F T F TF T F T F T F TFTFTF T F
YVR
Vancouver1 2 5 3 7 3 7453 4 17 3 7 2 10 11
car-
go
only4295 1 0 57 (US 5, NL,
Germany)
Asia Pacific and India
DELNew Dehli62 1 42 2 1 2 1 21 4 2 3 2 2 1 322153 31
cargo
only4 (US 3, NL)
BOM
Bombay42 1 32 3 2 2 1 10 3 2 3 2 2 1 2111
car-
go
only01
car-
go
only21
cargo
only2 (US, NL)
SEL
Seoul63 0 30 3 0 3 0 53 3 0 3 0 3 0 103130 2 0 3  ( U S  2 ,  A u s t r a l i a )
NRT
Narita54 1 41 4 1 4 1 42 4 1 4 1 2 0 203131 4 1 2  ( U S  2 )
KIX
Haneda65 1 51 5 1 5 1 62 5 1 5 1 3 0 405151 5 1 2  ( U S  2 )
CGK
Jakarta53 0 40 3 0 3 0 41 3 0 3 0 3 0 303030 3 0 1  ( A u s t r a l i a )
BKK
Bangkok62 0 31 2 0 2 0 43 2 0 2 0 1 0 003120 3 04 (US 2, KLM,
Sweden)
HKGHongKong1 7 1 0 1 8 2 9540 4 17 1 7 0 20 0 0 6 1 7 2 8 27 (US 4, Japan,
Singapore, France)
SINSingapore64 1 30 3 1 2 0 42 3 0 3 0 4 1 305241 4 1 3  ( U S  3 )
SYD
Sydney85 2 62 5 2 4 1 42 6 3 6 2 3 1 414152 5 2 4  ( U S  2 ,  N L ,  U K )
MEL
Melbourne74 1 62 4 1 4 1 31 5 2 6 2 2 0 305152 4 1 3  ( U S ,  F i j i ,  U K )
AKL
Auckland42 1 32 3 2 2 1 31 2 1 3 2 1 0 002132 2 1 3  ( U S  2 ,  F i j i )S/C/W/163/Add.1
Page 20 RampCargo/
MailPax/
BaggageA/C
ServicingA/C
Main-
tenanceLoad Control/
CommsULD
ControlSurface
TransportSecurityFlt
OpsAdmin/
Super-
visionRepresent-
ation/Accom-
modationForeign
OperatorsWhere
Wha tT
O
T
A
LT F TF T F T F TF T F T F T F TFTFTF T F
Latin America
MEX
Mexico
City1 2 7 4 63 8 4 5 3 43 8 3 6 2 3 2 4273 1 0 6 7 47  ( U S  5 ,  N L ,  B e l g i u m )
BOG
Bogota64 1 31 4 1 3 1 11 3 0 2 1 1 0 002052 5 2 3  ( U S  3 )
EZE
BuenosAires31 1 00 1 1 1 1 22 0 0 0 0 0 0 001133 1 1 3  ( U S  3 )
SCL
Santiago53 3 32 5 4 3 2 43 3 2 2 1 1 0 113243 4 3 3  ( U S  2 ,  G e r m a n y )
GRU
Sao Paulo74 2 20 6 4 4 2 21 3 2 2 1 1 0 203243 4 3 4  ( U S  3 ,  C H )
European Union
LHR
LondonHeathrow23 11 6 16 9 9 5 8 5 7 5 10 5 10 5 9 3 4 0 7 4 14 7 13 712 (France, US 5,
Sweden, NL, KLM,
Canada, Ireland,
Germany)
MANManches
-ter12 5 0 81
Car-
go
Only6140 1 171
Cargo
Only71
Cargo
Only40 51
Car-
go
Only4 0 7 2 6 2 3 (US, NL, Sweden)
DUB
Dublin3 2 1 21 2 1 2 1 10 2 1 2 1 1 1 113232 3 2 2  ( U K  2 )
FRA
Frankfurt1 8 1 0 76 7 5 3 1 42 7 5 7 4 4 3 435375 8 513 (US 5, Belgium,
Ireland, NL, CH, UK
Sweden 2, Italy)
MUCMunich13 3 2 41
Car-
go
Only7342 4 26 2 7 2 10 11
Car-
go
Only4173 7 37 (CH, UK, US 2, NL,
Sweden, Belgium)
CDGCharles deGaulle1 6 6 0 92 5 0 5 1 32 8 4 8 2 5 1 7363 1 0 5 7 48 (UK 2, NL, US 2,
Sweden 2,)
ORYOrly1 0 4 0 52 4 1 4 0 11 4 1 5 0 4 2 412164 5 3 4  ( U S  3 ,  U K )S/C/W/163/Add.1
Page 21RampCargo/
MailPax/
BaggageA/C
ServicingA/C
Main-
tenanceLoad Control/
CommsULD
ControlSurface
TransportSecurityFlt
OpsAdmin/
Super-
visionRepresent-
ation/Accom-
modationForeign
OperatorsWhere
Wha tT
O
T
A
LT F TF T F T F TF T F T F T F TFTFTF T F
MAD
Madrid11 6 3 7 4 6 3 5 2 2 0 5 3 7 4 3 1 2 2 5 2 9 7 10 7 8 (US 5, UK 2, NL)
AMS
Amster-
dam8 2 2 33 4 2 2 2 22 3 3 2 2 2 2 112243 3 26 (UK 2, Italy, US 2,
CH)
ZRH
Zurich7 2 0 30 4 1 3 1 10 2 0 2 0 3 1 303041 5 24 (US, Italy, UK
Sweden,)
MXPMalpensa6 1 0 32 3 2 1 0 00 1 0 1 0 3 1 101143 4 3 4  ( U S  3 ,  U K )
FCO
Rome-Fumicino30 021
Car-
go
Only0000 0 011
Cargo
Only21
Cargo
Only11 11
Car-
go
Only0 0 2 2 3 2 2 (NL, UK)
ATH
Athens5 2 0 20 3 0 0 0 10 3 0 2 0 1 0 102030 3 0 0
VIE
Vienna4 1 0 30 3 0 1 1 20 1 0 1 0 0 0 002030 3 0 1  ( S w e d e n )
LIS
Lisbon3 1 0 10 1 0 1 0 10 1 0 0 0 0 0 101022 3 2 2  ( U K  2 )
Africa and the Middle East
JNB
Johannes-burg75 2 52 4 1 5 1 41 4 2 4 2 4 2 303152 4 2 2  ( N L ,  C H )
CPT
CapeTown7 5 1 5 2 4151 4 14 2 4 2 41 31
car-
go
only3152 4 2 2  ( N L ,  C H )
NBO
Kenya54 1 52 4 1 4 1 20 5 2 5 2 4 1 524152 4 2 2  ( N L ,  C H )
ACC
Ghana22 1 01 1 0 1 0 00 1 0 2 1 0 0 100010 0 0 1  ( U K )
LOS
Nigeria22 0 20 2 0 1 0 10 2 0 2 0 1 0 001010 1 0 0
WDH
Namibia11 0 10 1 0 1 0 10 1 0 1 0 1 0 101010 1 0 0S/C/W/163/Add.1
Page 22 RampCargo/
MailPax/
BaggageA/C
ServicingA/C
Main-
tenanceLoad Control/
CommsULD
ControlSurface
TransportSecurityFlt
OpsAdmin/
Super-
visionRepresent-
ation/Accom-
modationForeign
OperatorsWhere
Wha tT
O
T
A
LT F TF T F T F TF T F T F T F TFTFTF T F
DAR
Tanzania21 0 10 1 0 1 0 10 1 0 1 0 0 0 101010 1 0 0
ABJ
Cote
D’Ivoire21 0 10 1 0 1 0 21 1 0 1 0 1 0 001010 1 0 0
BGF
CentralAfricanRepublic11 0 10 1 0 1 0 10 1 0 1 0 1 0 001010 1 0 1  ( A i r  A f r i q u e )
BZV
Congo11 0 10 1 0 1 0 10 1 0 1 0 1 0 001010 1 0 1  ( A i r  A f r i q u e )
NKC
Mauritania11 0 10 1 0 1 0 10 1 0 1 0 1 0 001010 1 0 1  ( A i r  A f r i q u e )
DKR
Senegal21 0 10 1 0 1 0 10 1 0 1 0 1 0 001021 1 02 (Air Afrique,
France)
BJLGambia11 0 10 1 0 0 0 00 0 0 0 0 1 0 000000 0 0 0
LAD
Angola11 0 10 1 0 1 0 10 1 0 1 0 1 0 101010 1 0 0
LLW
Malawi11 0 10 1 0 1 0 10 1 0 1 0 0 0 001010 1 0 0
RBA
Morocco10 0 00 0 0 0 0 00 0 0 0 0 1 0 000010 1 0 0
TUN
Tunisia11 0 10 1 0 1 0 10 1 0 1 0 1 0 101010 1 0 0
BAH
Bahrain11 0 10 1 0 1 0 10 1 0 1 0 1 0 001010 1 0 0
KWI
Kuwait22 0 10 2 0 1 0 10 1 0 1 0 1 0 101010 1 0 0
DXB
UnitedArab
Emirates31 1 10 1 0 1 0 10 1 0 1 0 1 0 102031 3 1 1  ( U K )
TLV
Tel Aviv42 1 41 4 1 1 1 31 4 1 4 1 3 0 104141 4 1 1  ( C H )S/C/W/163/Add.1
Page 23RampCargo/
MailPax/
BaggageA/C
ServicingA/C
Main-
tenanceLoad Control/
CommsULD
ControlSurface
TransportSecurityFlt
OpsAdmin/
Super-
visionRepresent-
ation/Accom-
modationForeign
OperatorsWhere
Wha tT
O
T
A
LT F TF T F T F TF T F T F T F TFTFTF T F
CAI
Cairo87 0 70 8 0 5 0 30 7 0 7 0 7 0 808080 8 0 0
IST
Istanbul93 1 52 3 1 4 2 10 5 1 3 1 5 1 206161 7 1 1  ( C H )
Note:  This chart includes general aviation ground handlers since they also contract services with commercial airlines and have  a wide international presence (e.g. Jet Aviation, and Universal Weather).
Ramp :  Marshalling, Parking, Ramp to Flight Deck Communication, Lo ading/Embarking, Unloading/disembarking, Starting, Safety, Moving  Aircraft.
Cargo/Mail :  Cargo Handling (general), Outbound/Inbound Cargo, Transfer/transit Cargo, Post Office Mail.
Pax/Baggage :  General, Departure, Arrival, Baggage Handling, Remote/Off Airport Services, Intermodal Transportation.
A/C Servicing :  Exterior/Interior Cleaning, Toilet/Water Service, Cooling/H eating Aircraft, De-Icing/anti-icing and snow and ice removal, Ca bin Equipment/Material storage.
A/C Maintenance :  Routine/non-routine services, Material Handling, Parking and Hangar space.
Load Control/Comms :  Load Control, Communications, Departure Control System
ULD Control :  Unit Load Device - Handling and administration
Surface Transport :  General and special road transportation at the airport and interurban.
Security :  Passenger and Baggage screening reconciliation, Cargo and Post Office Mail, Catering, and Aircraft Security.
Flt. Ops :  Flight operations and crew administration, Preparation of arrival and departure documents, Inflight assistance, Inflight dis patch.
Admin/ Supervision :  Administrative and supervisory functions on behalf of airline clients
Representation/Accommodation :  Administration on behalf of airline clients.
Source:  http//:www.iata.org/ighcS/C/W/163/Add.1
Page 24
55. In order to give further meaning to the above table, comparative tables have been constructed
to provide members with an overview of the competitive relationships across countries and between
regions in the overall ground handling market, and in the individual sectors.  Africa and the Middle
East have not been included in this analysis due to the high percentage of monopolies that exist.  In
Table 9 below, the values from Table 8 have been correlated to show the percentage of world-widemonopolies and the extent to which ground handling is an internationally competitive market.  The
combined averages indicate that ground handling is not dominated by restrictive regulations.  Instead
the numbers show that international competition exists in more than 50% of the world market.
TABLE 9
Monopolies and Foreign Based Independent Foreign Operators 2000
RegionsMonopolies
(% of all services)Foreign Based 3rd Party
Providers (average %)
North America 0 27.5
US 0 20
Canada 0 57.7
Europe – Member States as Domestic Providers 0 51.2
Europe – Member States as Foreign Providers 0 18.9
Asia Pacific/India 0 48.7
Latin America 0 65
Africa/Middle East 43.5% 11.5
Global Average 16.1% N/A
Note:  Switzerland is not included in these calculations due to the small size of the country.
56. Canada and US have been separated due to the significant differences in the average
percentage of foreign-based operators between the two c ountries.  It will also be noted in Tables 9 and
10, the European Union region has been treated in two different ways due to the differences in
regulatory jurisdictions for international bilaterals over traffic rights, and international ground
handling.  Negotiating authority for bilateral air tr ansport agreements remain at the national level of
competence and jurisdiction while ground handling regulatory jurisdiction has been established at the
Community level.  It is therefore arguable that the European Union based ground handlers should be
classified as domestic operators.  However, since traffic rights remain at the national level, and it is
not definitive whether or not ground handling is directly related to traffic rights, the Europeanhandlers have been treated in two ways.  First they are calculated as domestic operators, and second
they are treated as foreign based operators.
57. The advantage gained through this exercise of separation appears when the averages found in
the US are compared with those in the European Union at the sub-sector level of operations
(Table 10) this process removes any apparent bias in favour of the EU and against the US.Additionally, Switzerland has been separated from the European Union since the air transport
bilaterals have yet to come into effect between Switzerland and the EU.  In the case of Africa and the
Middle East, average percentages have not been calculated due to the relatively high percentage of
third-party handlers that retain monopoly rights.S/C/W/163/Add.1
Page 25TABLE 10
Average % of Foreign Based 3rd Party Service Providers 2000
RampCargo
MailPax
BaggageA/C
ServicingA/C
MaintenanceLoad
ControlULD
ControlSurface
TransportSecurity Flt. OpsAdmin
SupervisionRepresentation
Accommodation
North America21.1 24.1 19.4 21.2 19.1 22.6 22.3 4 29.2 18.7 26.4 24
US 12.7 19.1 11.5 13.7 16.5 17.4 19.4 1.9 15.8 15.1 21.1 18.1
Canada 55 44.1 50.7 51.4 29.1 43.6 34.2 12.5 83.3 33.3 47.7 47.7
Europe ( Member
States as Foreign
Providers)22.9 40.3 30.5 60.3 38.4 39.5 30.8 38.9 47.3 39.1 57.4 51.4
Europe ( Member
States as Domestic
Providers)15.6 22.5 22.3 12.6 15.5 11.3 15.5 18.6 8.1 23.3 20.6 19.3
Switzerland 0 0 25 33.3 0 0 0 33.3 0 0 25 40
Asia Pacific
India26.3 24.9 31.8 20.4 40.4 26.3 25.9 13.1 11.8 35.1 34.4 24.4
Latin America 66.6 29.9 64.3 61.9 80 34.1 36.6 13.3 30 55.2 70 69.4
Africa
Middle East
Note:  Due to the number of monopoly operations within the Africa/Middle East regions the percentages have not been calculated.S/C/W/163/Add.1
Page 26
Industry Consolidation
58. Based on the top 8 global ground handling corporations, the economic value of the whole
sector (including fuelling, but not catering) amount to approximately US$ 2.6 billion, and employ
more than 76,000 persons (see S/C/W/163 for details on catering).  While these figures do not includeall ground handling service providers, they do indicate that this sector represents a significant
economic element of air transport in broad terms.  Two trends appear to be emerging:  1) there is a
competitive bidding process for the various operational licences awarded by airport authorities;  and
2) independent global operators are emerging at primary hub airports in all geographic and economic
regions.
59. Over the past two years, the global market has begun to consolidate rapidly.  What is of
particular interest in this process is the emergence of global service providers that are non-US-basedmultinational corporations.  This is in strong contrast to the pre-1996 period, whereby, US-based
independent handlers (DynAir, Hudson General, and Ogden) were among the largest providers due to
the large US market and restrictive policies that prohibited self-handling or a competitive third-party
market.
60. Table 11 is presented to highlight the number of mergers and acquisitions that have occurred
over the past two years.  It must also be noted that while Swissport appears to be the most aggressive
in this area, GlobeGround has also been very active.  However it was not possible to verify the precise
acquisitions and mergers beyond the recent purchase of Hudson General.
TABLE 11
The World Market Concentration since 1999
Buyer Acquisition/Joint Ventures
Go – Ahead 1999 UK GHI Ltd.
Castle Harlan 1999 US AMR-Services (later WFS)WFS 1999 US Miami Aircraft Support Inc.
WFS 1999 US Aerolink International Inc.
WFS 2000 US Oxford Airport Technical ServicesASIG 1999 US GAH AviationASIG 1999 US Elsinore Aviation LP
GlobeGround 1999 Germany Hudson General Corp.
Pernauille 1999 France/UK ServiceairServiceair 2000 UK Global Gr oup (US)
UK Tri-Star Airline Services (US)
Menzies 2000 UK Ogden (August 2000)
Swissport 1999 Switzerland 70% Air Littoral AssistanceSwissport 1999 Switzerland Commercial agreement with Aer Lingus (LHR)Swissport 1999 Switzerland 40% of MIASCOR (Manila)
Swissport 1999 Switzerland DynAir
Swissport 2000 Switzerland 50% Dares Salaam Airport Handling Company (block
sales agreement).
Swissport 2000 Switzerland Dutchport – Joint venture with CSC (NL
21)
Venture
Capital Group 2000 UK Northeast Aviation (UK)
Northwest Aviation (UK)
2000 UK Capital Aviation (UK)
Sources:  Going Global.   Peter Bluth President and CEO. GlobeGround 30 November 1999.  http//:www.menzies.com.
gsetoday.com, Jan 2000 May 2000 and June 2000.  The Swissport Profile , May 2000.  AirportWorld , June/July 2000.
Ground Handling International , May/June, 2000.  Airline Business,  September 2000.
                                                     
21 CSC is the Dutch international cargo handling company found in Table 8 as 'NL'.  This is one of the
largest independent cargo handling corporations in the world.S/C/W/163/Add.1
Page 27
61. To summarise the information contained in this  section, it can be said that since 1993 there
has been a substantial movement away from monopoly services at airports around the world, to an
increasingly competitive third-party market.  Th e two largest ground handling markets (US and EU)
have become very competitive resulting from liberal  policies by the regulatory authorities in both
locations.  Other markets around the world that have pursued liberal policies have also become
competitive marketplaces.  This trend applies to both passenger and cargo markets.
62. Due to the extent of competition between service providers and the distinctly different sub-
sectors which are part of ground handling, Members may wish to discuss the aspects of ground
handling that when not directly related to traffic rights, could possibly be covered by the GATS
already, or might be included in the future.  The question becomes relevant in light of the degree of
existing competition (sectoral and sub-sector levels), foreign ownership investments, internationalconsolidation, and the number of States having liberal and competitive policies in the ground handling
market.
III. AIRPORT SERVICES
63. Airport services are dealt with in paragraphs 64, 126 to 134 and Annex 4 of S/C/W/59 and
S/C/W/129.
64. Airport services are among the sectors of air transport which have changed most radically
over the last ten to fifteen years.  During this period the traditional model of an airport system, owned
and managed by a public monopoly has given way in ma ny countries to privatization and competition.
Although the first significant privatization, that of British Airport Authorities, took place only in
1987, private airports have become relatively common, and are increasingly exporting their brandnames and marketing skills.
65. Corporatization and administrative autonomy have also become common, even in systems
which have not moved as far as pure privatization.  Many functions are outsourced or subcontracted
and private employees have become the norm. For example, San Diego Airport authority has only
twenty employees, while Frankfurt Airport Authority has 15,000 for traffic that is only three timesthat of San Diego.  This reflects the fact that in San Diego almost all airport services have been
outsourced, while in Frankfurt the airport authorities not only provide all airport services but also
other services such as ground handling.  The greater part of airport revenues are now derived from
non-aeronautical services.  New actors such as airlines, construction companies, property
management companies and even bus companies have begun managing airports and financing their
investment while traditional airport services prov iders have extended their range of activities to
management, engineering, distribution and property management services.  Landing fees are nowbecoming more effectively cost-based and private financing is becoming the major source of
investment.
66. This movement is general and is affecting the developing as well as the developed world.
Indeed, some developing countries, probably because of their compelling need for private investment,
are further advanced in privatization and commercialization than certain developed countries.
67. This section consists of two parts:
- first, a description of economic and regulatory developments affecting airport
services and airport services providers over the last ten years (1989-1999);  and
- second, a description of the internationally agreed rules of the charging system, which
entails non-discrimination and cost-based obligations, and the tensions that theS/C/W/163/Add.1
Page 28
progressive movement of commercialization has created for these intergovernmental
rules.
68. Airport services and air navigation services are two of the rare areas of air transport which are
well documented.  This is due to the fact that ICAO has held two major conferences on the subject, in1989 and 2000, and for this purpose has launched a major questionnaire, the answers to which,
although incomplete, are statistically representative (over 75% of the traffic) and offer a very detailed
picture both for 1989 and 1999.  This information includes the situation of developing countries,
where traditionally economic and regulatory data are extremely scarce.  Furthermore, over one
hundred working papers were produced for this conference and the World Bank has also produced a
notable amount of literature on this subject.  Much of this data is available on the web-site
http://www.icao.int/icao/en/atb/ansconf2000/inde x.html, to which references are made where
appropriate.  Document ANSConf WP/18/Add.1 is also extremely useful since it contains the
individual breakdowns, country by country and airport by airport, of the answers to the ICAO
questionnaire.
A. A
IRPORT SERVICES AND AIRPORT SERVICE PROVIDERS
1. Introduction:  definitional  and classification issues
69. One of the difficulties in studying airports is to define airport services.  The CPC provisional
provides a definition of airports services:  "74610 Airport operation services (excl. cargo handling):
Passenger air terminal services and ground services on air fields, including runway operating services,on a fee or contract basis.  Exclusions:  Air terminal cargo-handling services are classified in subclass
74110 (Container handling services), if for containerised freight, and in 74190 (Other cargo handling
services), if for non-containerised freight or for passenger baggage" .  CPC/Rev.1 replicates this
definition under a different number (r67710).
70. However, this definition does not seem to give  a complete and disaggregated view of the
industry as it is described for instance in the ICAO Airport Economics Manual (AEM). It may
therefore be helpful to consider the industry concepts for possible future classification purposes.
71. Unfortunately, unlike ground handling, there is no universally accepted breakdown of airport
services.  However, IATA and ACI experts concur in considering that the various breakdowns
contained in the ICAO "Airport Economics Manual" could form the basis of a meaningful
classification for the industry.  This document allows for two approaches to the classification of
airport activities:  an analytical accounting-based approach and a facility-based approach.  Tables 12
and 13 (see below) list and define airport services according to the respective approaches and put in
correspondence with them the relevant items of the CPC.
72. It seems to emerge clearly from the two tables that many of the activities undertaken in
airports are also performed in many other contexts and are covered by CPC items which have no
direct relation to air transport.  They would therefore be expected to fall within the existing scope of
the GATS.  This is true of course for non-aeronautical activities of the airports, which account on
average for 50% of their revenues, but it is also true of some aeronautical activities.
73. It is also worth noting that none of the correspondences belongs to the air transport division
(CPC 73).  Some activities have an air transport-related correspondence (i.e. either group 743
"supporting services for air transport" or group 741 "cargo handling services", both belonging to
division 74 "supporting and auxiliary services").  For those activities one may therefore question
whether there is a direct relationship with traffic rights.  Finally, there are some items for which asatisfactory correspondence could not be found and for which the question of the relationship with
traffic rights remains open.S/C/W/163/Add.1
Page 29
74. As far as the first table, based on analytical accounting, is concerned, the various items have
been constructed by ICAO from the viewpoint of the airport only - hence the reference to the cost of
facilities "owned by the airport itself".  However, in many instances these activities are subcontracted.
The nature of the corresponding service delivered  (third column) remains the same whether the
service is delivered by the airport as a direct operator or by a subcontractor.  Similarly, the firstcolumns refer in some instances to costs and revenues attributable to "aircraft operators".  The
evolution of the market, especially in ground handling, where independent operators have appeared
alongside airlines, would imply to read this "aircraft operators" category as covering "airport users".S/C/W/163/Add.1
Page 30
TABLE 12
Classification of Airport Services on the Basis of Revenues and Costs
Revenues Costs Possible relevant CPC items
Aeronautical revenues
(AEM 4.43 to 4.55)Aeronautical costs
(AEM4.43 to 4.55)
Landing fees:  this includes charges andfees collected for the use of runways,taxiways and apron areas, including
associated lighting as well as for the
provision of approach and aerodromecontrol. AEM 3.34Aircraft movement areas (e.g. runways,
taxiways, aircrafts parking areas):  all operationand maintenance costs, and administrative costs
attributable to these areas and their associated
vehicles and equipment, including the expenseof all labour maintenance materials power andfuels.  AEM 3.6674610 "airport operations
services:…ground services onairfield including runways
operating services…"
Passenger charges:  this includes passengerservices charges and other charges
collected for the use of passenger terminaland other passenger processing facilities(e.g. for passengers embarked ordisembarked).  AEM 3.36Passenger terminal facilities (owned by the
airport) all operation and maintenance costs, and
administrative costs attributable to passengerterminal facilities, including, where applicable,such expenses as relate to any airport-operatedshops and services located in the terminals (e.g.personnel costs, costs of stock sold and any
spoilage and the cost of utilities and general
upkeep provided in such cases).  AEM 3.6774610 "airport operation
services:…passenger terminal
services"
Security charges:  this includes chargesand fees collected for the provision by theairport of security services for theprotection of passengers and other personsat the airport, aircraft and other property.
AEM 3.39Security services:  all operation and
maintenance costs, and administrative costssolely borne by the airport and attributable tothe provision of all aspects of airport securityincluding regular police services. This includes
personnel costs and the costs of operating and
maintaining the associated premises, vehiclesand equipment.  Also included are anypayments made to others for the provision ofsecurity services.  AEM 3.7274610 "airport operation
services excluding cargohandling"87301*"investigation services:... shoplifting protection
services"
87302 "alarm monitoringservices"87303 "armoured cars services"87305 "guards services"87309 "other security services"
91260* "police and fire
protection services: …administrative and operationalservices for regular andauxiliary police forces
supported by public authorities
and port, border and coastguards and other special policeforces.  Police services arerelated to…alien registration…"
Noise charges:  charges collected related tothe noise produced by aircraft when using
the airport.  AEM 3.40CPC 94050 "noise abatement
services:  noise pollution
monitoring, control and
abatement services, e.g. trafficrelated noise abatement servicesin urban areas"
Other charges on air traffic operationsincludes all other charges and feescollected from aircraft operators for other
types of facilities and services provided at
the airport for the operation of the aircraft.AEM 3.41? possibly 74690 "other
supporting services for airtransport"S/C/W/163/Add.1
Page 31
Revenues Costs Possible relevant CPC items
Non-Aeronautical revenues
(AEM 4.56 to 4.63)Non-Aeronautical costs
(AEM 4.56 to 4.63)
Ground handling charges: charges and feescollected from aircraft operators for theuse of facilities and services provided bythe airport for the handling of aircraft.
AEM 3.42Ground handling services provided by the
airport: all maintenance:  all operation andmaintenance costs and administrative costsattributable to these services provided by the
airport, including personnel costs and the
expense of operating and maintaining theassociated premises vehicles and equipment.AEM 3.70See section on ground handling
for CPC references
Ground access facilities and services:  alloperations and maintenance costs andadministrative costs including personnel costs
and the costs of operating and maintaining the
associated premises, vehicles and equipmentattributable to the provision by the airport ofaccess roads, rails, ramps, bridges and tunnelsas well as intra-airport transfer buses or other
form of transport used for such purposes.
AEM 3.7551310 "construction work for
highways (except elevatedhighways) streets, roads,
railways and airfield runways"
51320 "construction work forbridges elevated highways,tunnels and subways"(Note:  those construction items
only refer to the maintenance
work as maintenance is coveredby construction: see headnote ofitem 51 page 174 of the CPCprovisional)74420 "highways, bridges and
tunnels operations services"
71212 "urban and suburbanspecial transportation"
Fire fighting and ambulance services:  alloperation and maintenance costs, andadministrative costs attributable to theseservices, including personnel costs and the
expense of operating and maintaining the
associated premises, vehicles and equipment.AEM 3.7174690 "other supporting
services for air transport:  firefighting and fire preventionservices…"
93192 "ambulance services:
general and specialized medicalservices delivered in theambulances"
Air traffic control (including communications):all related operation and maintenance costs, and
administrative costs including in particular
personnel costs, the expense of power and anyspares consumed by radars and other equipmentemployed. Also any payments made to anyother entity for providing such services at theairport.  AEM 3.73See future paper on air
navigation services
Meteorological services:  all operation and
maintenance costs, and administrative costs of
any meteorological services provided by theairport itself, or payments made to others forproviding theses services.  AEM 3.7491138 "general administrative,
economic, commercial and
labour affairs related services:…administrative servicesconcerning …weatherforecasting institutions"see also future paper on air
navigation services.S/C/W/163/Add.1
Page 32
Revenues Costs Possible relevant CPC items
Non-Aeronautical revenues
(AEM 4.56 to 4.63)Non-Aeronautical costs
(AEM 4.56 to 4.63)
Aviation fuel and oil concessions(including throughput charges):  allconcessions fees, including anythroughput charges, payable by oil
companies or any other entities for the
right to sell or distribute aviation fuel andlubricants at the airport. AEM 3.43See fuelling section above
paragraphs ..to..82102 "renting or leasingservices involving own or
leased non residential property"
82202 "non residential propertymanagement services on a fee orcontract basis"
Restaurants, bars, cafeterias, and cateringservices:  fees and charges payable bycommercial enterprises or other entities for
the right to operate restaurants, bars,
cafeterias and catering services at theairport, including aircraft catering includedalso are any revenues derived from anysuch activities when operated by the
airport AEM 3.4464210 "meal serving services
with full restaurant services"64220 "meal serving services in
self-service facilities"
64230 "caterer servicesproviding meals to the outside"64290 "other food services"643 "beverage serving services
for consumption in the
premises"82102 "renting or leasingservices involving own orleased non residential property"82202 "non residential property
management services on a fee or
contract basis"
Duty-free shops:  fees and charges payableby a commercial enterprise or any otherentity for the right to operate duty-freeshop(s) at the airports, and for off-airportduty free shop to deliver goods sold at the
airport.  Also includes any revenues
derived from duty-free shops operated bythe airports itself.  AEM 3.45631 "food retailing services"
632 "non food retailingservices"82102 "renting or leasingservices involving own or
leased non residential property"
82202 "non residential propertymanagement services on a fee orcontract basis"
Automobile parking:  fees and chargespayable by a commercial enterprise (…) to
operate automobile parking facilities at the
airport.  Also includes any revenue derivedfrom such facilities when operated by theairport itself.  AEM 3.4674430 "parking services"
82102 "renting or leasing
services involving own or
leased non residential property"82202 "non residential propertymanagement services on a fee orcontract basis"S/C/W/163/Add.1
Page 33
Revenues Costs Possible relevant CPC items
Non-Aeronautical revenues
(AEM 4.56 to 4.63)Non-Aeronautical costs
(AEM 4.56 to 4.63)
Other concessions and commercialactivities operated by the airport: anyconcession fees or charges, other thanthose mentioned above, payable by
commercial enterprises or other entities for
the right to sell goods and services (such asautomobile rentals and banking andexchange bureaux concessions) at theairport.  Also included are any revenuesderived from commercial activities (shops
or services) operated by the airport itself
and not mentioned above, as well as anypublic admission fees charged for entry toareas of special interest (e.g. terminalobservation areas) or of guided tours
within the airport area.
AEM 3.47631 "food retailing services"
632 "non food retailingservices"71222 "rental services of
passengers cars with operators"
83101 "leasing or rental servicesconcerning private cars withoutoperators"8111-8119 "acceptance ofdeposits and other repayable
funds" (W120 7Ba)
81333 "foreign exchange"(W120 7Bf(ii))74720 "tourist guide services"96199 "other entertainment
services n.e.c."
82102 "renting or leasingservices involving own orleased non residential property"82202 "non residential propertymanagement services on a fee or
contract basis"
Rental:  rentals payable by commercial
enterprises and other entities for the use ofthe airport-owned building space, land orequipment.  Such rentals should includethose payable by aircraft operators for theairport-owned premises and facilities (e.g.
check-in and sales counters and
administrative offices) other than thosealready covered under "Air trafficoperations" above.  AEM 3.48(Partial correspondence):
Industrial development:  all operation andmaintenance costs, and administrative costsattributable to the development and provision bythe airport land and/or buildings and otherinfastructure solely for industrial/commercial
activities such as manufacturing, processing,
warehousing and other such commercialactivities that are not associated with theoperation of air services.  AEM 3.7682102 "renting or leasing
services involving own orleased non residential property"82202 "non residential propertymanagement services on a fee orcontract basis"
Other revenues from ancillary activities:all other revenues derived from non-
aeronautical activities. Also includes
payments received by the airport for suchservices as heating, air conditioning,lighting, water, cleaning and telephone useprovided they are not included in the rentalor concessions fees, and for any services
provided to non-aviation entities outside
the airport.  AEM 3.498740 "building cleaning
services"
7521 "public telephone
services"88700 "service incidental toenergy distribution"
All operation and maintenance costs, andadministrative costs, including personnel costsand the costs of operating and maintaining theassociated premises, vehicles, and equipment,incurred by the airport with respect to other
areas of services e.g. noise monitoring and
abatement measures.  AEM 3.77Note:  partial correspondence with the noise
charges item (above) of the first column.94050 "noise abatement
services:  noise pollutionmonitoring, control andabatement services e.g. trafficrelated noise abatement services
in urban areas"S/C/W/163/Add.1
Page 34
TABLE 13
Airport Services Classified on the Basis of Facilities
Facilities and Services to be taken into Account in
Computing Air Transport CostsPossible CPC Correspondences
Basic approach, landing and take-off facilities & services
Landing area with cleared approaches and taxiways with
necessary drainage, fencing, etc.51310 "construction work highways (except elevated
highways) streets, roads, railways and airfield runways"
Approach and aerodrome control:  air traffic control forapproach, landing, taxiing and take-off with necessarycommunications (sometimes partly or wholly provided byother than the airport operators)74620 "air traffic control services: …including approach,
landing and take off control services"
see also future paper on air navigation services
Meteorological services (see Appendix 2 as to when an
allocation of the costs of these services, proportional to their
utilisation for airport operations, should be considered)91138 "general administrative economic commercial and
labour affairs related services :…administrative services
concerning …weather forecasting institutions"
Passenger and public waiting rooms and concourse with
necessary heating, lighting, janitor service, police service,approach roads, etc.87301* "investigation services:... shoplifting protection
services.."87302 "alarm monitoring services"87303 "armoured cars services"87305 "guards services"87309 "other security services"
91260* "police and fire protection services: …administrative
and operational services for regular and auxiliary policeforces supported by public authorities and port, border andcost guards and other special police forces.  Police servicesare related to…alien registration…"51310 "construction work highways (except elevated
highways ) streets, roads, railways and airfield runways"
51320 "construction work for bridges elevated highways,tunnels and subways"(Note:  those construction items only refer to the
maintenance work as maintenance is covered by
construction:  see headnote of item 51 page 174 of the CPC
provisional)74420 "highways, bridges and tunnels operations services"
Fire and ambulance service in attendance 74690 "other supporting services for air transport :.fire
fighting and fire prevention services…"93192 "ambulance services:  general and specialized medicalservices delivered in the ambulances "
Special approach, landing and takeoff facilities & services
At night and during bad visibility by day:  lights for
approach, landing, taxiing and take-off, radio and other
special aids for approach, landing and take-off (sometimesprovided by other than the airport operator)74620 "air traffic control services:…including approach,
landing and take off control services"
see also future paper on air navigation services
Other facilities and services provided for aircraft operators
Hangar, workshop, stores, garage and other technical
accommodation74690 "other supporting services for air transport:
…hangar services…"
Space for parking and long-term storage of aircraft 7469 0 "other supporting services for air transport:…hangar
services…"
Land leased to aircraft operators for various purposes 82102 "renting or leasing services involving own or leased
non residential property"
82202 "non residential property management services on afee or contract basis"
Assistance in handling passengers and cargo, and necessaryequipmentSee ground handling services section
Towing and other handling of aircraft 74690 "other supporting services for air transport:"…aircraft
towing services..."
Special servicing of aircraft (air conditioning, cleaning, etc.) 74690 "other supporting services for air transport: …aircraft
cleaning and disinfecting services…"S/C/W/163/Add.1
Page 35
Facilities and Services to be taken into Account in
Computing Air Transport CostsPossible CPC Correspondences
Accommodation for airline offices, traffic counters and air
crews, and for the handling of passengers and cargo82102 "renting or leasing services involving own or leased
non residential property"
82202 "non residential property management services on a
fee or contract basis"
Communication facilities (aircraft operating agencymessages – Class B)Possibly 75222 "dedicated networks services" and/or 7523
"data and message transmission services"
Provision of aircraft fuel and other technical supplies, andalso of maintenance and repairs for aircraft (usually viaconcessions)See fuelling section
see maintenance section of S/C/W/163
Common services such as the provision of light, heat, power
and heating fuel88700 "service incidental to energy distribution"
Security measures, equipment, facilities and personnel for
the following functions:74610 "airport operation services (excluding cargo
handling)"87302 "alarm monitoring services"87305 "guards services"87309 "other security services"91260* "police and fire protection services: …administrative
and operational services for regular and auxiliary police
forces supported by public authorities and port, border andcost guards and other special police forces.  Police servicesare related to… alien registration …"
Inspection/screening of passengers and cabin baggage 74610, 87302, 87305, 87309, 91260*
Security in departure/arrival lounges, includingtransfer/transit lounges74610, 87302, 87305, 87309, 91260*
Security of airside areas 74610, 87302, 87305, 87309, 91260*
Security of landside areas 74610, 87302, 87305, 87309, 91260*
Accommodation for other than aircraft operators 74610, 87302, 87305, 87309, 91260*
Accommodation for shops, hotels, restaurants, parcel
checking rooms, motor transport organization, telegraph
office, post office, banks, etc.82102 "renting or leasing services involving own or leased
non residential property"
82202 "non residential property management services on afee or contract basis"
Facilities paid for directly by the public (sight-seeing, carparking, etc.)74720 "tourist guide services"
96199 "other entertainment services n.e.c"74430 "parking services"
Accommodation for necessary government activities,customs, immigration, public health, agricultural quarantine,
etc.82102 "renting or leasing services involving own or leased
non residential property"
82202 "non residential property management services on a
fee or contract basis"
Land rented to other than aircraft operators (includinggrazing rights, etc.)82102 "renting or leasing services involving own or leased
non residential property"82202 "non residential property management services on afee or contract basis"
Noise alleviatio n and prevention
Noise monitoring systems, noise suppressing equipment and
noise barriers94050 "noise abatement services, noise pollution monitoring,
control and abatement services e.g. traffic related noise
abatement services in urban areas"
Land or property acquired around airports -
Soundproofing of buildings near airports and other noisealleviation measures arising from legal or governmentalrequirements51650 "insulation work"
94050 "noise abatement services:  noise pollutionmonitoring, control and abatement services e.g. trafficrelated noise abatement services in urban areas"
75. The accounts of the airports confirm the large share in their revenues of activities which are
not classified in the CPC as being related to air tran sport.  This is illustrated in the following chart.S/C/W/163/Add.1
Page 36
Contribution of Different Activities to the Revenues of Three Airport Systems
Flughafen Frankfurt 
Other
3%
Security
4%Services 
(water, 
telecom, 
energy)
3%
Infrastructures 
(car parks, 
bridges, etc)
8%
Duty Free
20.5%
Airport charges
28.5%Ground 
handling
33%
BAA 
(*recently acquired duty free US subsidiary of BAA)
Other
6.5%
Property 
revenues
11.5%
Duty Free
23%World Duty 
Free*
30%Airport 
charges
29%
ADP
Airport 
charges
34%
Duty Free
17% Ground 
Handling
14%Infrastructures 
(car parks, 
bridges, etc)
14%Property 
revenues
10%Services 
(water, 
telecom, 
energy)
5%Other
6%S/C/W/163/Add.1
Page 37
76. Global figures shown in Table 14 on the respective shares of aeronautical and non-
aeronautical revenues confirm the importance of the latter.  It is notable that the share of non-
aeronautical activities is much larger in the more highly developed markets.
TABLE 14
Revenue by Source in 1997
RegionAeronautical Revenue
(US$ bn)Non-aeronautical Revenue
(US$ bn)
Africa 0.51 0.20
Asia Pacific 3.85 5.03
Europe 8.15 8.23
Latin America/ Caribbean 1.27 0.55
Middle East 0.45 0.35
North America 4.50 5.99
Total 18.73 20.35
Source:  ACI 1999 Airport Economics Survey
77. The following chart gives an interesting breakdown of those non-aeronautical revenues in
Europe and North America.
TABLE 15
Non-aeronautical Revenue by Sources
Region Parking Retail Real Estate Rental Cars Other Total
Europe 12.8% 44.4% 20.7% 2.7% 19.4% 100%
North
America37.4% 13.3% 7.8% 19.8% 21.7% 100%
Source:  ACI Airport Economics Survey 1998
(33 airports in North America, 54 airports in Europe:  1997 data)
78. "Airport management services", which constitute the core activities of airport services
providers, are not identified as a specific item in the CPC provisional.  However, CPC provisional has
an item p86609 "other management services not elsewhere classified", without definition, which
could possibly encompass airport management services.
79. CPC Rev.1 puts this item in partial correspondence with a new item r83190 "other
management services, except construction management services" which also includes the former
p86601 "project management other than for construction".  The definition of this "other management
services" item notably includes the following el ement,"… these services include management and
office management services with or without  the provision of their own staff".
80. Members may wish to consider whether airport management services are to be considered as
directly related to traffic rights and if not whether they fall under the definition of CPC provisional
CPC 86609.  Alternatively, they might require the elaboration of a specific, sui generis , definition in
order to facilitate commitments in this area.
81. It is also worth noting that important aspects of the activities of major airports or airport
service providers are not shown in Tables 12 and 13.  That is the case of architectural and engineeringservices which constitute an important activity.  These services are covered by CPC group 867
"architectural, engineering and other technical services" and arguably fall within the existing scope of
the GATS.  While all the items of architectural services (CPC 8671) could be potentially concerned,
only certain of the sub-items of engineering services and integrated engineering services seem to be
concerned (87621, 87624, 86729, 86731).S/C/W/163/Add.1
Page 38
2. Economic and regulatory developments
82. In the case of airport services regulatory and economic developments are closely inter-related
and cannot really be dealt with separately. This subsection will deal with developments in the
following areas:  traffic, financial situation, owne rship rules and situation, the emerging impact of
competition policy in the context of the hub and spoke system, the growing impact of environmentalconstraints in the context of global congestion, and other new commercial trends and technological
evolutions.
(a) Traffic
83. The following Tables compiled from the ICAO "World of Civil Aviation" show the number
of international airports in the period 1993 - 1999, with their traffic and ranking.
TABLE 16
Traffic:  aggregated elements
1993 1994 1995 1996 1997 1998 1999
Number of
international airports1050 1073 1118 1119 1140 1178 1192
Share of airport
charges in airlineoperating expenses4.3% 4.4% 4.5% 4.3% 4.2% 3.9% no data
available
Scheduled and notscheduled traffic at thetop 25 airports rankedby total  passengers
- millions of
passengers784.8 834 877.4 932.6 968.2 997.2 1045
- growth rate +3.9% +7.5% +5% +6.7% +4.5% +2.7% +4.8%
- percentage of
world totalpassengers30% 30% 31% 32% 32% 32% 32%
Scheduled and not
scheduled traffic at thetop 25 airports rankedby international
passengers
- millions of
passengers367.7 401 422.7 454.5 481.4 497.6 532
- growth rate +5.7% +8.9% +6.2% +8% +6.5% +3.4% +6.9%
- percentage of
world totalpassengers44% 50% 51% 46% 49% 49% 50%
Source:  ICAO, World of Civil Aviation.S/C/W/163/Add.1
Page 39TABLE 17
Scheduled and non-scheduled traffic at world's major airports, 1993 & 1999
Top 25 Airports:  ranked by
INTERNATIONAL passengersTop 25 Airports:  ranked by
TOTAL passengers, 1993
Airport (ranking by
international commercial
aircraft movements given in
brackets)1993
thousandsAirport (ranking by
international commercial
aircraft movements given in
brackets)11999
thousandsAirport (ranking by total
commercial aircraft
movements given in brackets)1993
thousandsAirport (ranking by total
commercial aircraft
movements given in brackets)1999
thousands
1. London-Heathrow (1)   40,848 1.  London-Heathrow (3) 54,826 1.  Chicago (1)    65,078 1.  Atlanta (1)   77,940
2. Frankfurt (3)   25,290 2.  Paris-Charles de Gaulle
(1)38,877 2.  Dallas/Ft. Worth (2)    49,970 2.  Chicago (2)   72,568
3. Hong Kong (11)   24,420 3.  Frankfurt (4) 37,197 3.  Los Angeles (4)    47,845 3.  Los Angeles (4)   63,877
4. Paris-Charles de Gaulle
(2)  23,338 4.  Amsterdam-Schipol (2) 36,271 4.  London-Heathrow (12)    47,601 4.  London-Heathrow (11)   62,264
5. Amsterdam-Schipol (4)   20,658 5.  Hong Kong (11) 29,090 5.  Atlanta (3)    47,088 5.  Dallas/Ft. Worth (3)   60,000
6. Tokyo-Narita (13)   18,947 6.  London-Gatwick (8) 27,628 6.  Tokyo-Haneda (48)    41,562 6.  Tokyo-Haneda (46)   54,338
7. London-Gatwick (8)   18,656 7.  Singapore (13) 24,490 7.  San Francisco (13)    32,737 7.  Frankfurt (18)   45,858
8. Singapore (9)   18,513 8.  Tokyo-Narita (17) 22,503 8.  Denver (5)    32,623 8.  Paris-Charles de Gaulle
(7)   43,597
9. New York-Kennedy (20)   14,821 9.  Brussels (5) 19,981 9.  Frankfurt (18)    32,536 9.  San Francisco (22)    40,387
10. Bangkok (17)   12,754 10.  Zurich (6) 19,410 10.  Miami (7)    28,660 10.  Denver (8)    38,034
11. Miami (10)   12,373 11.  Bangkok (20) 18,856 11.  New York-Kennedy (22)    26,790 11.  Amsterdam (24)    36,781
12. Zurich (6)   12,186 12.  New York-Kennedy (22) 17,856 12.  Paris-Charles de Gaulle
(24)   26,115 12.  Minneapolis (20)    34,216
13. Los Angeles (26)   11,945 13.  Miami (12) 15,757 13.  New York-Newark (8)    25,613 13.  Detroit (6)    34,038
14. Toronto (12)   11,077 14.  Seoul (31) 15,474 14.  Paris-Orly (38)    25,638 14.  Miami (12)    33,899
15. Manchester (21)   10,791 15.  Toronto (9) 15,422 15.  Hong Kong (62)    25,156 15.  New York-Newark (14)    33,814
16. Seoul (30)   10,327 16.  Copenhagen (7) 15,208 16.  Boston (6)    24,215 16.  Las Vegas (26)    33,669
17. Rome-Fiumicino (18)   10,263 17.  Los Angeles (33) 15,035 17.  Detroit (9)    24,171 17.  Phoenix (10)    33,533
18. Paris-Orly (24)   10,075 18.  Taipei (21) 15,015 18.  Phoenix (14)    23,609 18.  Seoul (49)    33,371
19. Copenhagen (7)      9,610 19.  Manchester (19) 14,826 19.  Minneapolis (15)    23,402 19.  Houston (16)    33,089
20. Düsseldorf (15)      9,596 20.  Palma de Mallorca (30) 14,679 20.  Osaka (67)    23,361 20.  New York-Kennedy (31)    32,003
21. Brussels (5)      9,309 21.  Madrid (14) 13,537 21.  Seoul (75)    22,634 21.  London-Gatwick (44)    30,559
22. Palma de Mallorca (32)      9,175 22.  Munich (10) 13,479 22.  Honolulu (31)    22,618 22.  St Louis (5)    30,189
23. Madrid (16)      8,621 23.  Rome-Fiumicino (16) 12,150 23.  Las Vegas (21)    22,491 23.  Hong Kong (56)    29,733
24. Munich (14)      7,879 24.  Düsseldorf (18) 12,095 24.  Tokyo-Narita (65)    22,141 24.  Orlando (34)    29,173
25. Stockholm (19)      6,270 25.  Dublin (15) 12,046 25.  Orlando (26)    21,466 25.  Toronto (28)    27,771
        TOTAL   367,742         TOTAL  531,708          TOTAL    784,850         TOTAL 1,044,701
1 Estimated values in this column.  1999 data are still preliminary;  actual ranking and percentage change may differ when final  data become available.
Source: ICAO Air Transport Reporting Form I  and Airports Council International.S/C/W/163/Add.1
Page 40
84. Several trends seem to emerge from Tables 16 and 17:
- first, the continued growth of passenger num bers at a rate higher than the growth of
world GDP;
- second, the continuing rise in the number of international airports;  and- third, the high concentration of the traffic.
The top 25 airports represent between 2,5% and 2% of the total number of airports (a
slightly declining proportion as the total number of airports is expanding) but handle
between 30 and 32% of passengers and between 44 and 50% of international
passengers.  This is largely linked to the structure of traffic but has been accentuatedby the hub and spoke system and the emergence of airline alliances.
(b) Financial situation
85. Table 18 describes the financial situation of the 35 biggest airports in the world for the last
two years.
TABLE 18
FINANCIAL RANKING OF AIRPORTS
Airport Financial Results 1998/99
Rank Airport CountryMain
airportsRevenueNet result
(US$ million)Period
EndNotes
Codes US$
millionchange
%1998 1999
1. BAA UK LHR/
LGW/STN3,241.3 19.9 658.2 454.6 Mar-99
2. Flughafen Frankfurt Main Germany FRA 1,398.8 3.6 59.1 51.6 Dec-98
3. Aeroports de Paris France CDG/ORY 1,345.4 8.4 89.0 71.1 Dec-98
4. Aena Spain MAD 1,250.0 119.1 Dec-98 Includes ATC
5. Port Authority of NY and NJ USA EWR/
JFK/LGA1,230.5 7.0 257.1 228.4 Dec-98
6. New Tokyo Int'l Airport
AuthorityJapan NRT 1,097.4 6.1 -9.4 Mar-99
7. Kansai Int'l Airport Japan KIX 923.8 -1.9 -183.4 -198.5 Mar-99
8. Aeroporti di Roma Italy FCO/CIA 632.4 -6.5 63.2 52.6 Dec-98
9. Schipol Group Netherlands AMS 614.7 9.8 150.0 126.6 Dec-98
10. Luftartsverket Sweden ARN 562.7 3.5 99.2 77.8 Dec-98
11. Flughafen Muenchen Germany MUC 506.4 -0.6 35.3 17.3 Dec-98
12. Chicago Department of
AviationUSA ORD/MDW 496.9 11.9 -169.7 Dec-98 FAA
13. Airport Authority Hong
KongHong Kong HKG 487.0 -50.1 Mar-99 Nine months
only
14. Civil Aviation Authority –
SingaporeSingapore SIN 462.3 52.2 247.3 244.6 Mar-99
15. Miami-Dade Aviation
DepartmentUSA MIA 453.0 4.3 3.4 -33.0 Sep-98 FAA
16. Los Angeles World Airports USA LAX 431.3 10.8 160.9 100.2 Jun-98
17. SEA-Societa Esercizi
AeroportualiItaly LIN/MXP 422.5 6.4 35.1 39.8 Dec-98
18. City and County of Denver USA DEN 417.4 0.7 -48.5 -68.5 Dec-98
19. Aer Rianta Ireland DUB 381.9 2.1 68.9 63.8 Dec-98
20. Manchester Airport UK MAN 372.9 -1.4 70.1 35.0 Mar-99 Pre-tax profit
21. Vienna Airport Austria VIE 351.8 6.9 57.4 Dec-98
22. San Francisco Airports
CommissionUSA SFO 348.6 118.3 136.3 Jun-98 Budget figures
23. Flughafen Dusseldorf Germany DUS 316.6 1.8 -56.3 57.1 Dec-98
24. Metro Washington Airports
AuthorityUSA IAD/DCA 287.5 23.9 29.7 29.1 Dec-98
25. Brussels International Airport Belgium BRU 267.1 58.9 19.6 22.0 Dec-98S/C/W/163/Add.1
Page 41
Rank Airport CountryMain
airportsRevenueNet result
(US$ million)Period
EndNotes
Codes US$
millionchange
%1998 1999
26. Greater Toronto Airports
AuthorityCanada YYZ 251.1 35.6 20.6 14.0 Dec-98
27. Massachusetts Port Authority USA BOS 247.7 9.3 88.6 -0.5 Jun-98
28. Copenhagen Airports Denmark CPH 247.2 8.1 58.0 48.9 Dec-98
29. Zurich Airport Authority Switzerland ZRH 245.9 -1.9 31.1 30.0 Dec-98
30. City of Atlanta Dept of
AviationUSA ATL 236.3 16.4 47.7 62.6 Dec-98 FAA
31. Dallas-Fort Worth Int'l
AirportUSA DFW 228.6 4.6 -38.0 59.8 Sep-98
32. Greater Orlando Aviation
AuthorityUSA MCO 227.3 9.1 257.4 -8.0 Sep-98
33. Airports Authority of
ThailandThailand BKK 209.5 10.6 86.7 123.2 Sep-98
34. Flughafen Hamburg Germany HAM 207.6 7.0 26.3 22.4 Dec-98
35. CAA-Finland Finland HEL 203.2 11.3 17.9 14.1 Dec-98 FAA
Note:  All figures translated into US$ at average exchange rate for period.  Revenue change is in local currency terms.
Source :  Airline Business International , December 1999.
86. ICAO document ANS/Conf WP/3 "Financial situation of airports and air navigation services"
22 shows that airports are in general profitable.  Moreover, airport profitability is increasing.   In 1990
only 30% of airports showed an operating profit  whereas in 1998, it was 75%.  In some cases
however, the figures may be misleading, since some airports covered by the study were unable to
identify their expenses and were counted as profitable by default.
87. ICAO cautiously identifies any relationship between size and profitability.  ACI for its part23
describes a slightly more complex situation summed up by the expression "small can be beautiful".
They note that in 1997 airports serving between 4 and 10 million passengers had a higher percentageof operating losses (20.7%) than those serving 1 to 4 million (16.9%);  but the financial performances
of airports serving less than one million passengers showed operating losses in the majority of cases.
However, the aggregated surpluses (EBITDA - ear nings before interest, taxes, depreciation and
amortization as a proportion of revenue) are higher for airports over 4 million passengers (21.6%)
than for airports under 4 million passengers (11.8%).
88. Operating margins measured by the EBITDA remain in all instances important; 31% in 1997
and 34% in 1998.  ACI insists that retained profits are much smaller (2.7% in 1997 and 3.2% in 1998)
and that capital expenditure by airports (US$ 5.91/passenger) is higher than their operating surpluses
(US$ 4.40/passenger), showing that internally genera ted sources of funding are insufficient to cover
current levels of capital expenditure.  This implies recourse to borrowing and/or subsidies, and 19states reported in the ICAO Study
24 operating subsidies for 61 airports and groups of airports.  These
include States in Europe and North America with major aviation activities.  In the 1989 Survey
subsidies were reported by 11 States for 121 airports or groups of airports.
                                                     
22 Covers 69 States in 1991, 88 States in 1998;  297 airports covering 71% of the total number of
scheduled passengers in 1991 and 271 airports covering 91% of the total number of scheduled passengers in1998.
23 http://www.airports.org/media/mr_19980904.html and ACI, Airport Economics Survey  – 1998.
24 ANSConf WP/3 para 2.2.4.S/C/W/163/Add.1
Page 42
89. The following regional breakdown confirms these tendencies:
TABLE 19
Financial Results by Region 1997/1998
RegionTotal
revenue
1997Total
revenue
1998EBITDA
1997EBIDTA
1998Retained
profit (loss)
1997Retained
profit (loss)
1998
Africa 658 710 254 320 96 120
Asia-Pacific 10,277 8,880 3,996 2,720 90 -600
Europe 16,158 16,380 4,331 5,400 57 570
Latin America/Caribbean1,917 1,820 375 400 -376 -900
North America 8,950 10,490 3,013 4,290 414 180
Middle east - 80 - 200 - 0
Total 37,960 39,080 11,970 13,320 281 180
Source:  ACI , Airport Economics Survey , 1998
(c) A significant evolution regarding the ownership of airports
90. Table 20 shows the growth in passenger numbers, by region, over the period 1997 - 2000,
together with forecast growth rates up to 2005 and 2010.
TABLE 20
Growth of Total Passenger Traffic (Annual Rates) as forecast by ACI
Region1997-2000
Growth rate
(%)1997-2005
Growth rate
(%)1997-2010
Growth rate
(%)
Africa 5.41 4.52 4.29
Asia/Pacific 3.11 4.36 4.70
Europe 7.19 5.25 4.78
Latin America/Caribbean 6.23 5.24 4.42
Middle East 6.41 5.47 5.24
North America 2.78 2.96 2.88
World average 4.72 4.14 3.95
Source:  ACI World-wide and Regional Forecasts , August 1998.
TABLE 21
Air Cargo:  Forecast of Annual Rates of Growth in Tonnage by Region (1997-2010)
Region Annual growth rate (%)
Africa 3.37
Asia/Pacific 7.77
Europe 6.35
Latin America/Caribbean 8.70
Middle East 6.51
North America 5.82
World average 6.43
Source:  ACI World-wide and Regional Forecasts August 1998
91. An annual 5 per cent increase means a doubling of traffic in fourteen years and implies a need
for regular and heavy investment.  ICAO evaluates the need for investment in airports and air
navigation infrastructure as between 250 and 350 billion dollars between 1999 and 2005.  For many
countries the commercialization of airport services is a way to finance these investments and create
revenue through airport sales, taxes or concession fees. This is probably the main explanation of the
steady change in the ownership of airports.S/C/W/163/Add.1
Page 43
(i) Global tendencies regarding the ownership of airports:
92. Table 22 below, compiled by ICAO, shows the pattern of airport ownership in different
regions.  It shows in particular that the most common organisational form for the 82 States responding
to the questionnaire (covering 303 airports) is still the government-owned autonomous airport
(47 States ).  The second most common was ownership by the Department of Civil Aviation (22
States), followed by other government department s (17 States), regional or municipal governments
(11 States), and private interests operating under a concession or leasing arrangement (9 States).  The
least common form was the privately-owned airport entity (7 States).25  The survey also indicated,
however, that in the future the organisational forms that were expected to grow most were private
interests operating the airport under a concession or leasing arrangement, and the privately-owned
airport entities.
TABLE 22
Ownership and Operation of Airports
Region Govt owned
autonomous
entityDirectorate
of Civil
AviationMinistry or
other govt
departmentRegional or
municipal
governmentConcession
or leasing
arrangementPrivately
owned
airport entityOther
Asia/Pacific (14 States)
C u r r e n t 1 0 532132
P l a n n e d 3210233
Middle East (8 States)
C u r r e n t 2510000
P l a n n e d 3010000
Africa (20 States)
C u r r e n t 1 3 530212
P l a n n e d 3000210
Europe (30 States)
C u r r e n t 1 9 587332
P l a n n e d 5153962
North America (2 States)
C u r r e n t 0001100
P l a n n e d 0001000
Caribbean/Central/South America (8 States)
C u r r e n t 3221200
P l a n n e d 1100310
Total (82 States)
Current 47 22 17 11 9 7 6
Planned 15 4 7 4 16 11 5
Source:  ICAO, ANS Conf WP/18
93. Compared to the 1991 Survey (Doc. 9579) conducted by ICAO, the number of States where
airports are organised as government-owned autonomous authorities have increased notably, as have
the number of States where airports are managed by privately-owned entities.
94. Regarding ownership of airports, 57 States reported their current situation and 32 on their
future plans.  From the survey it appears that 21 major airports in the world (in 7 States located in
Europe and Asia/Pacific) are currently owned by priv ate interests either completely (11 airports) or in
part (three airports where private interests have a majority holding and seven where private interests
have a minority holding).  The large majority of airports remain under government or publicownership either wholly or through a majority holdi ng. ICAO considers "tentative indications are that
private involvement in ownership will increase most in Europe, similar plans are also under active
                                                     
25 The total number of States quoted exceeds 82 because of different responses for different airports in
some States.S/C/W/163/Add.1
Page 44
consideration in the Caribbean, Central and Sout h America and the Asia/Pacific region." (ANSConf
W/18)
95. The 1999 ICAO survey also sought to establish where the differences are located between:
private domestic and/or foreign interest own and/or operate major airport areas or services.  Table 23
below shows the number of states in each region in which the relevant services are privately owned oroperated.
TABLE 23
Major Areas or Services Owned or Operated by Private Interests
Region Passenger
TerminalCargo
TerminalGround
HandlingAir Traffic
Control Security
ServicesOther
Asia/Pacific (14 States)
D o m e s t i c 81 18 81 11
Foreign 1
M i x e d 224
Middle East (8 States)
D o m e s t i c 467331
Foreign
Mixed
Africa (20 States)
D o m e s t i c 79 1 0 562
Foreign 1 1
M i x e d 13321
Europe (30 States)
Domestic 13 13 10 11 11 2
Foreign 1
M i x e d 6 1 2 122
North America (2 States)
D o m e s t i c 11211
Foreign
Mixed
Caribbean/Central/South America  (8 States)
D o m e s t i c 335331
F o r e i g n111 1
M i x e d 111 1
Total  (82 States)*
Domestic 36 43 42 31 35 7
F o r e i g n142 11
Source:  ICAO
96. This chart shows that while the number of privately-owned airport authorities remains
limited, private interests were heavily involved in ownership and/or operation of ground handling (64
States) and cargo terminals (59 States).  This pattern of distribution also broadly applies to theregional level.  Private involvement has also become increasingly important in the
ownership/operation of passenger terminals (41 Stat es) and security services (40 States).  Where
private interests were involved they were principally domestic, although in the cases of ground
handling and cargo terminals mixed domestic and foreign interests were also involved, primarily in
Europe.  Involvement by foreign interests alone was rare or non-existent.
97. In Europe, privatization is expanding rapidly.  Most major airports, with the notable exception
of Aéroports de Paris, are privatized in whole or in part, or are scheduled for privatization.  In the
United States, almost all airports remain publicly-owned, generally by municipalities or counties,S/C/W/163/Add.1
Page 45
although outsourcing and management contra cts are common.  The FAA launched in 1996 26 an
airport privatization pilot program of 5 airports.  Only one of these, Stewart Airport near New York,
has completed the various stages of the procedure and is about to be handed over for a 99 year lease to
the British airport operator National Express in a ssociation with local interests, (the real estate
developer First Columbia).  The most recent position of the United States government on airportprivatization has been expressed in an ANSConf working paper WP/41, dated 14 March 2000,
"Privatization of airports", presented by the United States.  It is worth noting that the United States
has numerous airport services providers exporting their management skills (Annex II).
98. Finally, Japan seems to have stayed aside of this movement as one can see by the same
Annex.
(ii) Developmental aspects of the commercialization of airport services
99. According to the World Bank
27 during the 1990s private sponsors have participated in
projects involving 29 airports in 23 developing and transition countries, with investment totalling US$
5.4 billion.  This private participation in the airport sector is still in the early stages and has attracted
less investment than privately sponsored projects in  other transport segments.  Still, initial patterns
have emerged:
- Operations and management contracts with major capital investment have been the
main vehicle for private participation;
- projects involving both terminals and runways have been more common than those
involving unbundled facilities;
- transferring airport networks to private sponsors has become a common alternative to
awarding single airports or stand-alone facilities; and
- Latin America and the Caribbean have led developing regions in private participation
in the airport sector.
100. Outright privatization of airports often meets political resistance, since airport assets tend to
be seen as strategic for national security. Thus, operations and management contracts with major
capital expenditure have been the most common way to involve the private sector, accounting for
about 70% of the investment in airport projects with private participation, as shown in Table 24
below.
                                                     
26 Federal Aviation Authorization Act 1996 , section 149.  See Department of Transportation docket
No. 28895 dated 9 September 1997 for the applications procedures.
27 World Bank document "Public Policy for the Private Sector", No. 202, November 1999, "Private
Participation in the Airport Sector, Recent Trends".S/C/W/163/Add.1
Page 46
TABLE 24
Total Investment in Airport Projects with Private Participation in
Developing Countries by Type of Project, 1990-98
TypeTotal investment
(1998 US$ millions)Share of total investment
in sector (per cent)
Divestiture 1,102.5 20.3
Greenfield 540.4 9.9
Operations and management withmajor capital expenditure3,801.9 69.8
Operations and management 0.0 0.0
Total 5,444.8 100.0
Source:  PPI Project Database
101. Operations and management contracts without major capital investment have been scarce.
The paucity of these schemes may result from governments' interest in private sector engagementprimarily as a way to raise funds for infrastructure rather than as a preferred approach to management.
102. Most projects have involved terminal and runway facilities or terminal facilities alone, as
shown by the chart below.  Projects involving term inals are attractive to private sponsors because they
offer potentially large "non-aeronautical" revenues.
103. Except for projects implemented in Africa in the early 1990s, all airport projects involving
terminals have granted private sponsors the right to raise revenue by selling concessions for
commercial activities (such as restaurants, parking facilities, and duty-free shops).  On average, theseprojects derive about half their revenue from non-aeronautical services.
TABLE 25
Total Investment In Airport Projects With Pr ivate Participation In Developing Countries By
Segment, 1990-98
SegmentTotal investment
(1998 US$ millions)Share of total investment
in sector (per cent)
Terminals and runways 3,997.3 73.4
Terminals alone 995.2 18.3
Runways alone 452.3 8.3
Total 5,444.8 100.0
Source:  PPI Project Database
104. Awarding airport networks to single private operators has become more common in recent
years.  Of the 89 airports with private participat ion, 55 in four countries were awarded as network
projects, accounting for about two-fifths of th e investment in airport projects with private
participation.  Other network projects are expected in the near future, notably in Latin America and
the Caribbean.  The Dominican Republic and Mexico transferred sections of their airport networks to
private sponsors in 1999, and Guatemala and Honduras are expected to do the same in coming years.
105. In Cameroon private sponsors made commitments to finance both profitable airports and
secondary facilities that have traffic flows too small to break even but are essential for integratingareas inaccessible by other transport modes.  By contrast, in the Argentine and Bolivian networks only
financially sustainable airports have been awarded to private sponsors; unprofitable airports have been
financed through concession fees from the profitable ones.
106. The geographical breakdown of these investments is shown in Table 26 below.S/C/W/163/Add.1
Page 47
TABLE 26
Total Investment in Airport Projects with Private Participation
in Developing Countries by Region, 1990-98
RegionTotal investment
(1998)
(US$ million)Share of total investment in
sector (per cent)
East Asia and the Pacific 1,243.1 22.8
Europe and Central Asia 1,153.6 21.2
Latin America and the Caribbean 2,450.3 45.0
Middle East and North Africa 197.7 3.6
South Asia 137.6 2.5
Sub-Saharan Africa 262.5 4.8
Total 5,444.8 100.0
Source:  PPI Project Database
107. Private participation in airports has been concentrated in three regions:  Latin America and
the Caribbean;  East Asia and the Pacific;  a nd Europe and Central Asia.  Latin America has
dominated in investment.  Within Latin America, Argentina has dominated, with the transfer of its
airport system to private sponsors in 1998 accounti ng for four-fifths of the investment commitment in
the region.  Private participation has also occurred in Bolivia, Chile, Colombia, Peru, Uruguay, and
Venezuela. Latin America's experience with private participation in other infrastructure sectors, and
the regulatory framework and implementation expertise that resulted, have facilitated private
involvement in airport projects.
108. Private airport projects in East Asian countries - China, Cambodia, and Thailand - have
attracted about a quarter of the investment in the sector.  In Europe and Central Asia investment in
private airport projects has been concentrated in the Czech Republic, Hungary, and Turkey.
109. In conclusion, as far as developmental aspects of airport ownership is concerned, the World
Bank considers that, although public provision of airport facilities and services remains dominant, the
prospects are strong for growth in private participation in airports.  The steady expansion in airtransport combined with the revenue security and limited competition in the sector can be expected to
continue to attract private participation in airpor t projects.  Several countries, notably in Latin
America, have announced plans to carry out projects in the near future.
(iii) The growing importance of the activities of commercial airport services providers
110. ICAO notes that "signs of globalisation in  airport management are emerging, with
transnational ownership and/or operation becoming more widespread, as a greater number of States
are seeking to transfer their airports from direct government management and control to autonomous
entities or private enterprise.  With the expanding number of privatised airports and the increased
prospects of their profitability, interest is mounting and competition increasing within private industry
to assume the leading role in airport operations globally.  As a consequence major airportmanagement companies, most of them associated with prominent airports in developed regions, are
applying for, and in many cases, obtaining management contracts for individual airports or groups of
airports in States that are located in other regions."
111. Annex II, which is reproduced, courtesy of the consultant Momberger Airport information
28,
contains probably the most exhaustive and updated information on airport management contracts andoperations available.  It contains most, if not all, of the operations which have occurred in the sector
between 1993 and May 2000.  It allows an examination both from the perspective of the airport
services providers (first column) and from that of the countries having recourse to such providers
                                                     
28 http//www.momberger.comS/C/W/163/Add.1
Page 48
(second column).  However, some important and imminent operations for which the provider has not
yet been selected, do not appear in this Annex.  Th is includes for instance the partial privatization of
the new Kuala Lumpur airport and the Indian government project to lease on a long term basis the
terminals of the four main international airports of the country:  Delhi, Bombay, Madras and Calcutta.
112. It is clear from the Annex that airport services providers are extremely diverse.  They can be
airport operators but may also be property investment groups, construction companies, financial
services companies, airlines or ad hoc consortia.
113. In terms of operations, many variations are possible, but all have certain common
characteristics:  the capping of aeronautical charges (at least for a defined period), a very detailed and
heavy investment obligation for the provider, and of course a concession fee.
(d) The growing impact of competition policy in the context of the hub and spoke system and
alliances
114. Slot allocation has become one of the main parameters through which competition authorities
enforce their decisions on airline alliances and abuse of dominant positions, and it will be dealt with
in a future section of this paper.  However, the question of the allocation of terminals to the national
carrier and to its allies at the expense of other alliances is becoming an increasingly important
question. There are a number of controversies on this point now current in Europe.
115. Another area in which competition policy tends to intervene increasingly is that of charging
policy and abuse of dominant position in that context.  For example, in January 2000 the U.S.
Supreme Court in "Air Transport Association versus the city of Los Angeles", found against the
airport authorities of Los Angeles on the ground of abuse of monopoly power. In this case, the airport
had valued its land properties as if they were to be sold at market value for construction instead ofvaluing them as dedicated for landing and had charged fees to airlines on this basis.  Another example
is the European Commission decisions 99/1 98/CEE and 99/199/CEE dated 10 February 1999 
29 which
disallowed a quantity rebate system in Finnish and Portuguese airports on the grounds that it provided
a de facto benefit to national carriers over foreign carriers.
(e) The growing impact of environmental constraints in a context of global congestion
116. Airlines and aircraft designers have made great efforts in recent years to reduce aircraft
emissions and noise pollution.  The world fleet is now 65% more fuel efficient than in 1970.  There
has been a 17% improvement since 1990 and a further reduction of 10% is  planned for the next 10
years.  In terms of gas emission new engine techno logies have almost eliminated emissions of carbon
monoxide and hydro carbons for new aircraft, and majo r reductions in emissions of other gases will
follow the accelerated introduction of satellite-based systems for communication, navigation,
surveillance and air traffic management (CNS-ATM) and other operational improvements.
117. Similar improvements have taken place in relation to noise pollution.  IATA30 and ACI 31
estimate a 75 per cent reduction of noise levels in the last 30 years.  A new aircraft entering the fleet is
typically 20 decibels quieter than the aircraft it replaces and its "noise footprint" is less than 15% of its
predecessor.
                                                     
29 Cases No. IV/35.703 and IV/35.767 Official Journal, dated 16.3.1999, No. 69 page 31, two other
similar proceedings are underway for Spain and Italy (EC ruling IP/00/874, dated 27 July 2000).
30 Source:  IATA Press Statements:  "Aviation fuel use and CO2, a message from the world airlines"
and "Aviation and the Environment", May 2000.
31 Source:  ACI Magazine "Airport World", July 2000.S/C/W/163/Add.1
Page 49
118. However, it takes at least a minimum 15 to 20 years for new technologies to be translated into
system-wide efficiency gains, and the substantial progress which has been made in modernising the
fleet has been offset and perhaps outweighed by the growth of the traffic over the last thirty years.32
Aircraft are quieter and cleaner but there are far more flights.  Aggregate figures on noise are lacking,but it is clear that sensitivity to aircraft noise has become a serious political issue, and one whichsubstantially affects airport development.  It ha s taken for instance thirty years to complete the
Munich airport project and more than ten years to  build Narita's first runway, and the second runway
is still vigorously contested.  The public enquiry for Heathrow's new terminal has been the longest in
the UK administrative history, and airport planners are now thinking with a twenty to thirty years
horizon not only because of financing constraints but also of political and environmental constraints.
Many airports in Europe or in Japan for instance have instituted curfew rules, limitations on aircraft
movements, limitations on the total volume of noise, noise charges whereby a night flight is valued asseveral day flights or where one flight by a noisy aircraft is worth several flights by a more silent
aircraft.  In Europe, airports are effectively measuring the noise of aircraft to implement these
measures.  In the United States, those questions are of a federal nature and the FAA allocates
important subsidies to airports in order to buy land and to insulate neighbouring houses.
119. These environmental constraints have with other factors (such as airspace congestion and the
multiplication of frequencies with smaller planes) contributed to a real congestion of airports in
Europe, Japan the two coasts of the United States and to a lesser extent in other regions.  In Europe
for instance among the major hubs only Roissy-Charles De Gaulle has effective expansion
capabilities.  This has been a key element in the choice of Air France as an ally by Delta or the choice
of Fedex of Paris as its hub for its European operations. This also explains the investments ofLufthansa in Munich airport, a secondary hub, or the interest of British Airways in KLM because of
Schipol airport.  However if Schipol airport is less constrained than Heathrow it still operates under
limitations on noises and its future runway may well be built on an artificial island as it is already the
case of Kansai airport in Japan.
(f) Other significant commercial developments
(i) Airport groupings and alliances
120. Another new trend is the emergence of airport networks, spurred on not only by the
globalisation trend but also by cooperative accords between airports.  The development of airport
alliances may follow.  Examples of such alliances include the shares held by Aéroport de Paris in
Liège airports and its partnership with the cargo airport of Chateauroux, or the links between Aéroport
de Montreal-Mirabel (ADM) and the French cargo airport of Vatry and the will of ADM to establish a
network of 11 platforms world-wide.
121. The main benefit of such alliances is the established reputation the leader of the alliance has
with the financial community (rating agencies and banks). The existence of operational synergies
among allied airports, claimed by some, is still a disputed subject and such synergies may be more
apparent in the area of non-aeronautical activities, such as the successful management by BAA of the
retail facilities of Pittsburgh airport.  The e xportation of know-how and the creation of value for
shareholders also motivate alliances.
                                                     
32 This progress per unit has, however, allowed in certain instances the replacement of limitation based
on the number of movements of aircrafts by limitation on the aggregate level of noise allowing more movements
for the same level of noise.S/C/W/163/Add.1
Page 50
(ii) Generalization of the hub and spoke system and emergence of secondary hubs
122. The hub and spoke system was the great commercial evolution of the seventies and eighties.
The phenomenon has spread world-wide and has been fostered by a series of new commercial
developments.
- Alliances, by connecting at least two main hubs, greatly increase the number of city
pairs available but place new constraints on flights (because of the need for sufficient
slots) and on airport organization (because of the need to locate alliance partners in
the same or neighbouring terminals).
- Code sharing permits the maintenance of routes which do not generate sufficient
traffic to maintain two competing airlines and which in the absence of code sharing
might disappear, but which may generate significant business for hub airports.
- The development of franchising and/or of regional aviation resembles code sharing in
that it can facilitate traffic between the hub and poorly served locations.
- Liberalization in the United States in the seventies and eighties and in the EU in the
nineties has led to the multiplication of flights with smaller planes in a shuttle type
organization, as between New York and Washington.
123. The generalization of the hub and spoke system has increased the proportion of connecting
passengers as compared to point-to-point passengers.  This has introduced competition betweenairports formerly considered and regulated as natural monopolies:  thus, passengers flying from
Geneva to Kuala Lumpur may choose to connect in Zurich, Frankfurt, Paris or even London.
Consequently, airports have begun to monitor closely the charges of their competitors and have
sometimes engaged in price wars.  They also compete with other airports to attract airline alliances.
124. All these developments have contributed to th e growing congestion of airports and help to
explain the development of "secondary hubs" and low cost airports.  Secondary hubs are hubs located
relatively close to the main hub to which important airlines channel part of their traffic, principally
connecting traffic, or used to serve a regional market.  Manchester (17,7 million passengers), Munich
(21,2 million), Lyons (5,5 million), Marseille (6 million), Nice (8,6 million) and Basel (3,6 million)
are examples of such secondary hubs.
(iii) Emergence of low-cost airports
125. Another new interesting commercial tendency is the emergence of "low-cost airports" which
often host low-cost carriers such as Beauvais and Ryanair.  These can be downtown airports or
smaller regional airports.  Stansted and Luton in the UK, Shannon in Ireland, Torp in Norway,
Charleroi in Belgium and Scanda in Sweden are examples.
(iv) New constraints and opportunities in the design of airports
126. Airports are preparing for the arrival on the market of very large aircraft such as the A3XX or
the stretched version of the Boeing 747.  ICAO has defined a "code F standard" for a maximum
dimension of 80 metres in length and wingspan.  Although manufacturers have tried to the maximum
extent possible to minimize additional investments for airports, dealing efficiently with the arrival of
larger groups of passengers often entails significant investments in terminal facilities.  It implies also
new administrative arrangements with customs and immigration services for instance.  An ACI studyconsiders that retrofitting a facility for that purpose will cost between US$ 100 million and
US$ 600 million.S/C/W/163/Add.1
Page 51
127. Automated check-in procedures have not yet become generally available or wholly effective,
but various experiments with "Smart Cards" and "Smart Tags" for luggage, and other electronic
systems, are underway.  IATA began work in February 2000 on industry standards through its
"Simplifying Passenger Travel (SPT) Interest Group ".  The schema drawn up by this Group and set
out below gives an idea of probable future developments in the automatization of passenger andbaggage handling.
Reservation
/g105 The passenger will make the airline reservation using a personal travel smart card through his own PC, 
providing  personal information, which can also be us ed for initial controls such as the need for a visa.
/g105 The card will also contain an option area for service preferences, frequent flier memberships and travel 
information.  Seat selection, check-in location and itinerary will be provided on screen.
/g105 Payment is by credit card or direct bank transfer.
Check-in terminal
/g105 Passenger inserts travel smart card into reader at ai rport and enters flight number on an interactive 
screen.  A biometric scan verifies identity match with travel card.
/g105 Reservation record accessed and boarding details (seats, gate, etc.) confirmed.
/g105 System prints a boarding card/baggage receipt and th e passenger passes through the security check to 
the departure area.
Baggage checks
/g105 Baggage is placed on an automated device which registers the number of pieces/weight and produces a 
tag containing a radio frequency (RF) chip  used to track the bag to destination.
/g105 The system will assess any excess baggage charge, which would be paid automatically by credit card.
/g105 Baggage may be checked before leaving for the airport at a dedicated secure baggage check-in facility.
Again this uses the travel smart card, which checks flight number and name against the reservation.
Departure control checks
/g105 Passenger identity checking can be integrated into the one-stop check, with the details passed 
automatically to the exit control authority's system for review.
/g105 If more extensive information is required, the passenger will be moved into a separate area for further 
examination.  But his would be the exception rather than the norm.
/g105 Check-in will also provide passenger and flight details to the control authorities at destination.  The 
passenger may have to respond to a series of simple on-screen questions.
Airport shopping
/g105 Passengers wishing to shop would check-in at normal positions at least 45 minutes before departure, 
while fast-track passengers would check in at special counters 30 minutes or even less before departure, but might pay a premium for this service.
Aircraft boarding
/g105 The passenger will enter the gate lounge or board the aircraft by inserting his travel smart card and 
completing a biometric scan.
/g105 Simultaneously, this confirms to the automated baggage reconciliation system that the passenger is 
abroad and checked baggage is authorised to travel.
Arrival at destination
/g105 The passenger picks up luggage in the baggage hall and proceeds to an electronic exit gage which, 
unless there is some discrepancy or security issue, will be the only barrier to exiting the airport.
/g105 Again, the smart card and a biometric scan are used to confirm identity, while the RF baggage chip will
be matched to ensure that correct bags have been collected.
/g105 Unless the control authorities wish to interview the passenger, the screen will tell the passenger to 
proceed and the gate will open into the arrivals hall.
/g105 If the passenger himself wishes to make a customs declaration or similar, this can be requested on the 
interactive screen.
/g105 The interactive screen can also be used to provide any further information, such as ground transport 
arrangements and meeting details.
Source:  IATA quoted by airline Business International, August 2000.S/C/W/163/Add.1
Page 52
128. Finally ICAO has now begun work on the establishment of a world wide safety framework
for airport including safety and design regulations.  Details on this are not yet available.
B. THE INTERNATIONAL CHARGING SYSTEM UNDER GROWING STRAIN
129. This section will describe the internationally agreed charging system and the tensions it has
been experiencing in recent years. The charging system is an essential feature of the operating
conditions of airlines, determining how landing ch arges are established and levied.  The following
Table shows charges levied in 1993-1998.
TABLE 27
Landing and associated charges, 1993-1998
1993 1994 1995 1996 1997 1998
Amount (US$ million) 9260 10480 11440 11600 11210 11000
Proportion of operating
charges (%)4.1 4.4 4.5 4.3 4.1 3.9
130. The information will be drawn primarily from ICAO documents: 9582 "Airports economic
manual"(1991);  9082/5 "Statements by the Council  to contracting states on charges for airports and
route air navigation facilities" (1997); and the relevant ANS/Conf documents.
1. The internationally agreed charging system
131. The ICAO charging principles are contained in two documents.  The first is Article 15 of the
Chicago Convention which is legally binding on ICAO members and therefore subject to the seldom
used ICAO dispute settlement system.  The sec ond is constituted by the non-binding, but very
detailed, Statement by the Council to contracting states on charges for airports, whose fifth and last
edition is dated 1997 and which is about to be revised following the ANS/Conf conference.
(a) Article 15 of the Convention on International Civil Aviation
132. The basic policy established by ICAO in the area of airport (and air navigation facility)
charges is expressed in Article 15 of the Chicago Convention as follows:
"Every airport in a contracting State which is open to public use by its national aircraft shall
likewise, subject to the provisions of Article 68, be open under uniform conditions to theaircraft of all the other contracting States. The like uniform conditions shall apply to the use,
by aircraft of every contracting State, of all air navigation facilities, including radio and
meteorological services, which may be provided for public use for the safety and expedition
of air navigation.
Any charges that may be imposed or permitted to be imposed by a contracting State for the
use of such airports and air navigation facilities by the aircraft of any other contracting State
shall not be higher,
(i) As to aircraft not engaged in scheduled international air services, than those that
would be paid by its national aircraft of the same class engaged in similar operations, and
(ii) As to aircraft engaged in scheduled international air services, than those that would
be paid by its national aircraft engaged in similar international air services.S/C/W/163/Add.1
Page 53
All such charges shall be published and communicated to the International Civil Aviation
Organization:  provided that, upon representation by an interested contracting State, the
charges imposed for the use of airports and other facilities shall be subject to review by the
Council, which shall report and make recommendations thereon for the consideration of the
State or States concerned."
In other words, Article 15 sets out the fo llowing two basic principles, which are very
comparable to those of the GATT on transit, and those of GATS access to and use of harbour
services or telecommunications networks.
- Uniform conditions shall apply to the use of airport and air navigation facilities in a
Contracting State by aircraft of all other Contracting States;  (MFN)
- The charges imposed by a Contracting State for the use of such airports or air navigation
facilities shall not be higher for aircraft of other Contracting States than those paid by its
national aircraft engaged in similar international operations;  (national treatment for foreign
air carriers operating international flights as compared with national carriers operatinginternational flights).  A similar national treatment principle applies to aircraft not engaged in
international scheduled traffic.
133. Two other aspects are also addressed in Article 15.  The first is that States shall publish their
airport (and route air navigation facility) charges, and also communicate them to ICAO, obligationswhich are comparable to the provisions of Article III:1, II:4 of the GATS, to paragraph 4 of the
telecommunication annex and to point 2.3 of the telecommunication reference paper.  This
information is collected and published annually by ICAO in the Manual of Airport and Air Navigation
Facility Tariffs  (Doc 7100).
134. Article 15 also provides for ICAO, upon representation by an interested Contracting State, to
review charges imposed and make recommendations thereon to the State or States concerned. It
should be observed that the Article specifically refers to representation by an interested Contracting
State, not by an aircraft operator.  However,  as stated by ICAO itself, "Article 15 has never been used
perhaps partly due to lack of awareness of its existence".
33  In another document ICAO even adds that
this mechanism should preferably continue to be pre-empted".34
135. At the multilateral level respect for Article 15 itself should be ensured by the ICAO dispute
settlement system contained in Articles 84 to 88  of the Chicago Convention, but this has been used
only 4 times since 1944, and never in cases involving Article 15.
136. Finally, at bilateral level the majority of bilateral air service agreements include a clause
related to user charges reflecting the basic principles of Article 15.  However, the bilateral air services
dispute resolution mechanism is also rarely used in the context of airport and air navigation charges,
probably because they call for representation at the contracting state level rather than at the level ofthe users and providers concerned and can therefore be costly and lengthy.
35
137. In practice however, according to the airlines, the provisions of Article 15 are frequently
violated by States.36  Examples include the non-publication of charges, together with a rebate or
                                                     
33 ANSConf WP/12 "prior consultations and handling of complaints" paragraph 4.6.
34 ANSConf WP/9 "economic regulation" paragraph 4.4.
35 See  ANSConf WP/12 "prior consultations and handling of complaints" paragraphs 4.5 and 4.6.
36 For instance IATA's Director-General indicated in his speech at the recent ICAO ANSConf
preparatory seminar (Montreal, 20 June 2000) that "we also know that agreeing on principles or even enforcingS/C/W/163/Add.1
Page 54
failure to apply the charges to the national airline while foreign airlines pay an arbitrary tariff.  Other
examples involve hidden rebates or gratuities to national airlines.  A more sophisticated practice is to
grant quantity rebates which de facto  give an advantage to national airlines since they necessarily
have more flights to and from the hub.  Peak hour charging having a de facto  national treatment
discrimination effect is also another example.  This practice has been condemned by an arbitraltribunal in 1989, on the basis of Article 15 of the Chicago Convention and of the Bermuda II
Agreement in a case involving the UK and the USA on peak charges in Heathrow.
138. There are thus a number of difficulties in ensuring respect of the MFN, national treatment,
publication, notification and consultation obligations contained in Article 15 of the Chicago
Convention.  This is even more apparent for the detailed charging principles of the Statement by the
Council to Contracting States on charges for airports and route air navigation facilities, since this
statement is not binding.
(b) Statement by the Council to contracting states on airport charges (Doc. 9082)
139. Additional and more detailed policy guidance in the area of airport charges is provided in the
Statement by the Council to Contracting States on Airport Charges, which is reproduced in Annex II.
The Council Statement has been revised periodically by the Council following major international
conferences on airport economics, with amendments published when required.  However, the basicphilosophy and principles expressed in the Council Statement have remained unchanged over the
years.
140. It is worth noting, from a WTO perspective, that the prevention of discrimination between
airlines is not the only purpose of this statement, which is in fact largely focused on the establishment
of a finely tuned and very detailed economic balance between airlines and airports.  It is closer inessence to the Telecom Annex and reference paper than to the provisions of the model maritime
schedule on "access to and use of" harbour services.
141. As ICAO puts it "the Council Statement differs in status from the Chicago Convention in that
an ICAO Contracting State is not bound to adhere to the Statement's provisions and
recommendations, unlike the articles of the Chicago Convention. However, since therecommendations in the Council Statement have been  developed by major international conferences,
there is a strong moral obligation  for States to ensure that their airport cost recovery practices
conform to the policies and philosophy set out in the Council Statement. This appears to be the
general practice  amongst ICAO Contracting States."
142. The only mention of an attempt to go further than the moral obligation mentioned by ICAO
and to make these principles legally binding is to be found in a 1997 draft directive adopted by the
European Commission but still pending before the Council of Ministers 
37 Airport operators are in
favour of this transposition into EU hard law sinc e this document is more "airport oriented" than the
ICAO statement and recognizes the possibility of pr efinancing the investment, peak hour charging,
and of cross-subsidization of airports through the constitution of networks.  These are the same
reasons the airlines do not favour such a transposition.   In any case, the text of the draft directive as it
stands may have to be redrafted in the light of the new version of document 9082, following the workof ANSConf.  This new version is not expected to be final before the next ICAO General Assembly in
autumn 2001.
                                                                                                                                                                    
them is one thing but it is quite another for States to implement agreed policies: there is a poor  record on the
part of some States in relation to Article 15 of the Chicago Convention…".
37 Com(97) 154 final, OJ C 257, 22.8.1997, p.2.S/C/W/163/Add.1
Page 55
143. The principles contained in the Council Statement address such subjects as the cost basis for
airport charges, airport charging systems, passenger-service charges, security charges, noise-related
charges, consultation with users regarding charges and airport planning, and the development of
revenues from concessions and rental of premises.
144. Among the basic principles included in the Council Statement is that it is desirable:
- where an airport is provided for internationa l use, that the users ultimately bear their
full and fair share of the cost of providing the airport;  and
- also that in determining the cost basis for ai rport charges, the cost to be shared be the
full economic cost, including depreciation and interest, to the community of
providing the airport and its ancillary services, but allowing for all revenues,
aeronautical or non-aeronautical, accruing from the operation of the airport (Doc9082, paragraphs 11 and 12 (i)).
145. The Council Statement (Doc 9082, paragraphs 20 and 21) also actively encourages the full
development of revenues from non-aeronautical activities in general.
146. Other principles and recommendations of particular relevance in the context of the cost basis
for airport charges and charging systems are:
- that airports should maintain accounts that provide a satisfactory basis for
determining and allocating the costs to be recovered, and should provide adequate
financial information to the users (Doc 9082, paragraph 11);
- that the proportion of costs allocable to the various categories of airport users should
be determined on an equitable basis, so that no users shall be burdened with costs not
properly allocable to them according to sound principles (Doc 9082,
paragraph 12 (v));
- that charges should not be imposed in such a way as to discourage the use of facilities
and services necessary for safety (Doc 9082, paragraph 13 (ii));  and
- that landing charges should be based on aircraft maximum permissible take-off
weight (Doc 9082, paragraph 14 (i)).
147. Special attention is invited to the principles established in the Council Statement concerning
security charges (Doc 9082, paragraph 16), and in particular to the principle that any charges or
transfers of security costs should be directly related to the costs of providing the security services
concerned and should be designed to recover no more than the relevant costs;  involved (paragraph 16
(iii)).
148. This is an exception from the general principle (Doc 9082, paragraph 12 (vii)) that airports
may produce sufficient revenues to exceed by a reasonable margin all direct and indirect costs. (The
only other exception from this general principle applies to noise-related charges, which similarly
should be designed to recover no more than the costs applied to the alleviation or prevention of noise
problems at airports where such problems are being experienced (Doc 9082, paragraph 17 (i).)
149. Trying to ensure respect of the charging principles of document 9082 and therefore
challenging the level and structure of airport charges is a traditional function of IATA.  IATA sets up,
coordinates and advises negotiating teams of airlines to discuss those items with airport authorities orS/C/W/163/Add.1
Page 56
civil aviation authorities if the airport is not autonomous.  IATA is even able to quantify the savings
for airlines produced by this activity.
150. Airlines consider therefore that the enforcement of the charging principles requires constant
vigilance.  It should also be borne in mind that, in spite of its length, the statement is often ambiguous
and has led to diverging interpretations between airlines and airports.
2. A system under strain
151. The privatization or commercialization of airports has added a new dimension to this picture.
For instance, airlines have engaged in lengthy discussions with the consortium operating the
Argentinian airport system on the risk of escalation of charges and the alleged absence of a cost-
related budget justifying the charges.38  (Aeronautical charges have been capped for five years but
non-aeronautical charges have not and airlines consider that non-aeronautical services provided in amonopoly situation, such as accommodation for airlines - offices, check-in counters, lounges - should
also be somehow capped).
152. More widely, as the Latin American region has been a test case for the movement of
commercialization, IATA has taken the initiative of a "Santiago Statement" dated 28 March 2000 (see
ANSConf WP/104) listing a series of considerati ons that States should take into account in the
privatization process.  These include:  inter alia  the definition of the responsibilities that the State
should retain to guarantee user rights (point 1);  the application of fair and reasonable charges and
rates established in all transparency in relation with related operational costs and the investment
actually made by the private concessionaire (point 4);  the need for regulatory mechanisms in order to
control the operations of the contract and the application of fair prices (point 7);  and finally (point 8)compliance with the Chicago Convention (Article 15) and adherence to the charging policies stated in
document 9082 (the Council Statement).
153. The Latin American Civil Aviation Commissi on (LACAC) had also issued a recommendation
on airport privatization (LACAC A13–4 see ANS Co nf WP/89) which according to its own terms
largely coincides with the Santiago Statement.
154. More generally the position of IATA, favorable in principle to the commercialization
movement but demanding a strong regulatory oversight and showing extreme caution on its
commercial consequences such as peak hours char ging, pre-financing of investment and marginal
tariffication has been expressed in detail in various ANS Conf documents (WP/26, 80, 81, 82, 83, 85).
Airports Council International, the international associ ation of airports, has of course a different point
of view on these issues (see ANS Conf WP/48, 50, 51, 52, 53, 54 and 55) and has in particular
insisted on the need to abolish the single till - i.e. the obligation to use non-aeronautical revenues to
reduce aeronautical charges).
155. For its part, ICAO acknowledges the problem of growing disregard for the charging
principles.  For instance in its presentation to the ANS Conf conference it indicates that the
monopolistic characteristics and capacity limitations of airports and air navigation services, together
with the liberalization of air transport services, have in certain circumstances given rise to questionsregarding the application of basic non-discrimination principles and equitable cost recovery practices.
156. The result of the ICAO questionnaire seems to confirm those concerns, since out of the 75
responding countries only 38 confirmed that they follow the ICAO cost recovery policy in setting
                                                     
38 See among others Airline Business International , September 1998.S/C/W/163/Add.1
Page 57
charges for airports.39  ICAO lists the consequences:  overcharging for services provided and charges
not being properly cost-based;  lack of transparency in particular with regard to revenues and
expenses;  lack of efficiency in airport operations;  inconsistent standards of service;  delay by airports
in investing in new infrastructures to allow for traffic growth;  and denial of access (ANS-Conf WP/9,
paragraph 3.3).
157. In considering possible solutions ICAO first recalls that the State has responsibilities under
the Chicago Convention which it cannot delegate.  This is the case for the enforcement of the
non-discrimination principles of Article 15 of the Chicago Convention but also in Article 28, which
makes the State responsible for the standards of the facilities and services provided.
158. The following developments will describe the solutions suggested by ICAO each proposal
made, the discussion that took place in Montreal, and the decision that was taken.
159. The first ICAO proposal was to insert a paragraph in the Council Statement recommending
that States consider either individually or in cooperation with other States, the establishment of an
independent economic regulatory authority to oversee the financial practices of the airports and/or air
navigation services providers.  This regulatory body should be empowered to intervene when
necessary.  Its functions would include:  preventing overcharging and other monopolistic practices;
ensuring transparency and assessing efficiency in the operation of the providers;  reviewing standardsand quality of services providers;  and monitoring investments planned in relation to traffic forecasts
(WP/9,  paragraph 3.3 to 3.8 and 4.2).
160. The debate on this proposal led first to the conclusion that such an autonomous regulatory
body may not be necessary since generic competition la w was already applied to the providers.  It was
also felt that the purpose of regulatory oversight should be wider than financial practices alone.  It wasagreed that the objectives listed in WP/9 as well as others discussed in the Conference could serve as
basis for an illustrative set of principles that co uld be incorporated in ICAO guidance.  While agreeing
to this additional guidance, the Conference nevertheless recognized that States would choose their
own regulatory regimes and mechanisms according to their particular needs and circumstances and
that therefore before establishing an independent authority they may wish to give consideration to thecosts of regulation and the need for regulatory simplicity.  (WP/115 points 4.6.1 to 4.6.4 and
recommendation 4/4).
161. The second ICAO proposal was to strengthen its policy regarding to consultations with an
emphasis on guidance aimed at pre-empting disputes rather than on dispute resolution.  This would
imply the inclusion in document 9082 of a statemen t to the effect that where an autonomous body or
entity is established, whether by a government or private interests, to operate an airport(s) and/or air
navigation services, the State should stipulate as a condition for the approval of the new body or entitythat it observes all relevant ICAO policies and practices, notably those specified in the Chicago
Convention, its annexes and document 9082 (WP/12, point 5.2.1) .
162. During the discussion, some delegates considered that this condition was too strong and that it
should be formulated with a more permissive tone. The conference agreed that the text be amended to
reflect the mandatory nature of the obligations that States retain under the Chicago Convention but theless mandatory nature of the ICAO-recommended policies and practices (WP/115 point 4.2.1 and
recommendation 4/1).
163. The third ICAO proposal is the establishment of a "first resort mechanism" that is to say a
neutral party at local level to preempt and resolve disputes before they enter the international arena.
                                                     
39 (ANS-Conf WP/9, paragraph 2.2.2, see appendix B, page 9 for the individual and regional
breakdown of the answers).S/C/W/163/Add.1
Page 58
This function could be assumed either by the general supervisory body suggested above or separately
by an ad hoc body (WP/12 point 3.1 and 3.2).
164. During the discussion the conference agreed that the concept of such a first resort mechanism
for dealing with complaints should  be included in the Council Statement and as guidance in the
Airports Economics Manual (document ICAO No. 9582), (WP/115 point 4.2.2 and recommendation
4/2).
165. The conference also endorsed a proposition made by the European Conference of Civil
Aviation (ECAC) in document WP/69 to include in document 9082 guidance on the principles of best
commercial practices for airport and air navigation systems which could cover inter alia  quality and
timeliness of service, assessment of investment proposals, consultation processes, accounting
practices, subsidization, development plans and treatment of users (ANSConf WP115,
recommendation 4/5).
166. It will be possible to have an overview of the new disciplines when ICAO is finished
redrafting the Council declaration and had it approved.  This is expected to take place at the spring
2001 meeting of the ICAO Council or the autumn meeting of the General Assembly.
167. The question of making statement 9082 compulsory at world wide level has never really been
discussed.  As a preliminary reaction airlines could live with a compulsory statement if it remained asit stands (including the "single till" but excludin g the prefinancing and the modulation according to
economic principles) and airports could not.  Airports place their hope in the redrafting of the
statement and hope that the study they managed to obtain on the "single till" will lead finally to the
disappearance of this concept.
168. In total, it appears clearly that the airport charging system is based on principles in essence
similar to those of GATS, although much more sophis ticated and detailed. In spite of this degree of
detail and of its ability to take into account, through periodical redrafting, the new economic and
regulatory developments,  the system seems to lack the necessary enforcement and dispute settlement
mechanisms to produce its full effects.  In that respect it is in a situation similar to the WIPO
intellectual property conventions before the creation of the TRIPS Agreement or of interconnectionrules in telecommunication before the creation of the reference paper.
ANY OTHER SUPPORTING SERVICES
169. The 'other supporting services' to be reviewed include:  cleaning and disinfecting; fire fighting
and fire protection services; and hangar services.  Each of these services are considered to be sub-
sectors of ground handling and/or airport management.  Therefore, please refer to the ground handling
section for information on cleaning and disinfecting, and to airport management for fire fighting andhangar services.S/C/W/163/Add.1
Page 59
ANNEX I
European Union Council Directive
96/97/EC
LIST OF GROUNDHANDLING SERVICES
1. Ground administration and supervision2. Passenger handling3. Baggage handling4. Freight and mail handling
5. Ramp handling
6. Aircraft services7. Fuel and oil handling8. Aircraft maintenance9. Flight operations and crew administration
10. Surface transportation
11. Catering services
Source:  Official Journal of the European Communities  No L 272/36.  Council Directive 96/97/EC, October
1996, Annex.S/C/W/163/Add.1
Page 60
ANNEX II
Airport Management Contracts and Operations, 1993 -2000
Company Activities
ADC  (Airport Development
Corporation), CanadaHolds a 34% stake in the project comp any for Terminal 2/B at Budapest-
Ferihegy Airport (Hungary)
ACSA, South Africa
<27> (11) 453 9354Manages Pictersburg's Gateway Inte rnational Airport and Pilanesberg
Airport, Sun City (South Africa) in addition to its own nine airports
ACV  (Airport Consulting Vienna)
& Vienna International Airport,
Austria
Fax: <43> (1) 700 72 636Vienna Airport runs Voslau/Austria and part-owns Budaörs/Hungary ;
joint-venture partner in the BOT contract for a new international terminal
at Istanbul's Atatürk International Airport (Turkey), holding a 5% stake in
TEPE Akfen-VIE Investment, Construction & Operation Inc.; interested
in operating airports in Germany (e.g. Eberswalde-Finow near Berlin and
Berlin-Schönefeld), Greece (Eastern Crete), Italy  (Trieste), South Africa
and Argentina;
ADM Capital Inc., Canada
(owned by ADM – Aéroports de
Montréal)Fax: <l> (514) 394-7356Member of a consortium that overse es the financing, construction and
operation of the new terminal at Budapest Airport (Hungary); won the
concession for the Vatry cargo airport in France as a member of the
SEVE consortium formed with SNC-Lavallin of Canada, Via GTI,
Sogarls, Pingat, Iénair, and the CCIs of Reims/Epernay,
Chalons-en-Champagne and Troyes of France; holds 23.3% of SEVE.
Interested in managing airports in Latin America and South Africa
ADP Management, France
(airport management holding
company owned by Aéroports deParis (59%), Groupe GTM (34%),banks (remainder)Fax: <33> (1) 4335 7443ADP owns and operates 14 airports and airfields in the Paris region; ADP
Management has a 35% stake in Aéroports du Caméroun (ADC), which
manages three international and four provincial airports; 34% stake in
Aéroports de Madagascar (ADEMA), which manages twelve airports;
operates Phnom Penh Airport in Cambodia as a majority partner (60%) of
CAMS, which also provides ground-handling services at the airport;partner in SOGEAC which runs Conakry Airport in Guinea under a
five-year concession and Kan Kan Airport; acquired a 25% stake in SABS.A., the operating company of Liège Airport in Belgium, specializing in
air freight and charter flights.Together with GTM, a subsidiary of Suez Lyonnaise des Eaux, preferredjoint bidder for up to 49% of the shares of a yet-to-be privatized Sukamo-Hatta International Airport, Jakarta/Indonesia.
Will manage and operate Mersa Alam Airport in Egypt when completed
in 2001.Interested in U.S. airports (Boston-Logan Terminal 1) and Latin
American airports (together with Groupe GTM), in Portuguese  and Italian
airports, Sofia Airport/Bulgaria, Shanghai-Pudong/China , and in St.
Petersburg/Russia (together with U.S. investors).
AENA, Spain
Fax: <34> (91) 321 3001Owns 38% of Aeropuertos del Caribe which manages Barranquilla
Airport in Colombia; handles the former Schiphol involvement in
Cartagena Airport/Colombia; owns 25.5% of the Mexican-Spanish
consortium which acquired a 15% stake in Grupo Aeroportuario delPacifico (GAP) package of Pacific airports in Mexico, the other partners
being Unión Fenosa, Dragados, and the Angeles Group; involved in
building a new airport at Samaná/Dominican Republic; interested in
managing other airports in Colombia as well as Montevideo/Uruguay
Aeroporti di Roma SpA, Italy
Fax: <39> (6) 6595 3776
(owned 54.2% by the State holdingcorporation IRI through Cofiri andFintecria; listed on the Milan stock
exchange since 1997) Owns and operates the Rome airports Flumicino and Clampino (Italy);
acquired the Alitalia stake (15 %) in Aeroporto di Genova SpA (Genoa
Airport) and a 9% stake in SACAL (Lamezia Terme Airport); won thetender for South African airports and now holds 20% of ACSA, with an
option to acquire another 10%; interested in managing airports elsewhere
in Italy and in Latin AmericaS/C/W/163/Add.1
Page 61
Company Activities
Aer Rianta, Ireland
Fax: <353> (1) 844 5113Owns and operates three Irish airports (Dublin, Shannon, Cork); holds a
40% stake in Birmingham International Airport Ltd/U.K. together with
NatWest Ventures (ARI/NWV Ltd) and 40% in the Air Partners GmbH
joint venture with Hochtief at Düsseldorf Airport (Germany); interested
in other European airports; Aer Rianta International (ARI), (Ireland) has
duty-free operating and management contracts at airports in Bahrain,
Canada/Montreal-Dorval + Mirabel, Cyprus /Lamaca + Paphos, Kuwait ,
Lebanon/Beirut, Pakistan /Karachi, Russia /Moscow + St Petersburg,
Syria/Damascus, and Ukraine /Kiev, plus consultancy contracts
Air-India, India Holds a 5% stake in Cochin International Airport Ltd in India
Airis Corp., USA
Fax: <l> (404) 874-6545
(third-party developer)Operates a USD 100 million two-building cargo facility at New York's
JFK International Airport for the Port Authority of New York & NewJersey, a mixed-use facility (offices/cargo) for LanChile at MiamiInternational Airport, and the International Air Cargo Center (IACC) atNewark International Airport for six major airlines, (USA)
Airport Group International,
Inc. (AGI) , USA
Fax: <l> (818) 409 7979
AGI was jointly owned byLockheed Martin (38.7%) andSoros Capital (28.4%). Strategicinvestors in AGI include GECapital Services (9.4%), the DFS
Group (3.5%), SunAmerica and
United Infrastructure, a jointventure of Bechtel and Kiewit(4.7%); TBI plc in the U.K.
acquired AGI on 20 Sept. 1999 by
paying USD 45.4 million in cash
and USD 98 million in new TBIsharesManages 29 airports, including Burbank-Glendale-Pasadena Airport, CA
(since 1978), Albany County Airport, NY; Rickenbacher Int. Airport;
Columbus/OH; Stewart International, Newburgh/NY; the International
Terminal (Concourse E) at Atlanta-Hartsfield, GA; and under a five-yearcontract the Trillium Terminal at Pearson International Airport,Toronto/Canada (which AGI had owned and sold back to the Government
in early 1997); Haikou-Mellan Int. Airport in Hainan/China;
Perth/Australia (through Airstralia Development Group, of which AGI
owns 16%); Darwin, Alice Springs, Tennant Creek/Australia through
Airport Development Group (of which AGI owns 49%); HobartInternational, Tasmania/Australia through HIAPL; member with a 25%
share in a consortium that won a 30-year concession for London LutonAirport (U.K) and also includes Bechtel Enterprises (10%), Barclays
Private Equity (32.5%), Barclays UK Infrastructure Fund (32.5%);20-year concession to manage San José International Airport in Costa
Rica together with local partners; preferred bidder for the new Ciudad
Real Airport near Madrid/Spain; interested in other Latin American and
European airports
Alpar AG, Switzerland
Fax: <4l> (31) 960 2201Owns and operates Bern Airport, (Switzerland) since 1985
Angels Group, Mexico
(Grupo Angeles, 100%
Mexican-owned)Leading partner of the consortium which won a concession for the Grupo
Aeroportuario del Pacifico (GAP) pack age of Pacific airports in Mexico,
the other partners being A-ENA, Unión Fenosa, and Dragados
APAC (Australia Pacific
Airports Consortium) , AustraliaOperates Melbourne-Tullamarine International Airport and Launceston
Airport (Australia); AMP, Australia's largest insurance and financial
services company, owns 49.9% of APAC, BAA 25. 1 %, and AxiomFunds Management 25%
Arkia Israeli Airlines, Israel Owns and operates the civil part of Ovda Airport, 40 km north of Ellat,
(Israel)
ATCO Airports Ltd, Canada
(50:50 Joint venture of ATCO
Frontec Corp. and WinnipegAirport Services Corp.)Operates Edmonton City Center Airport (since January 2000) and the
airports at Castlegar, B.C.; North Bay, Ont.; Iqaluit; Moose Jaw, Sas.; andSt. Andrews, Man., all in Canada; also provides security services at
Winnipeg Int. Airport
BAA International
(wholly owned by BAA plc, U.K.)
Fax: <44> (171) 932 6699
BAA USA, Inc.
Fax: <l> (703) 708-7991
(BAA plc has been a privatecompany since 1987)Owns and operates seven U.K. airpor ts; manages the entire airport system
at Indianapolis/IN and the Harrisburg/PA International Airport and the
Capital City/PA reliever airport in th e USA (10-year contracts) and the
concessions at Pittsburgh Airport/USA and in Newark's Terminals A & B
(15-year contracts); 65% stake in GESAC, the Naples/Italy airport
company; owns 15.1 % in APAC (Australia Pacific Airports Corporation)
which runs Melbourne International Airport and LauncestonS/C/W/163/Add.1
Page 62
Company Activities
Airport/Australia under a 50-year lease; interested in Indonesian, Latin
American, and other Italian airports; signed a contract with the CIR
holding of Italy's De Benedetti group for the acquisition and development
of Italian airports, including ADR (Rome) and entered a joint venture inChina to manage airports
Baden-Airpark AG, Germany
Fax: <49> (7229) 662 109
(owned by Schmider-KleiserHolding, now bankrupt)Owns Baden-Airport GmbH, the operator of Baden Airport Karlsruhe/
Baden-Baden, (Germany), an ex-Canadian air base in the upper Rhine
valley
Bangkok Airways, Thailand Operates Samui International Airport, (Thailand) under a 20-year lease
agreement
Barclays Capital, U.K.
(investment division of the
Barclays Group)The Barclays Group has a 65% stake in the consortium which acquired a
30-year concession to operate London-Luton Airport from the LutonBorough Council (U.K.). Barclays Private Equity holds 32.5%, Barclays
UK Infrastructure Fund 32.5%; other consortium members are AGI andBechtel Enterprises
Bechtel Enterprises & Bechtel
Civil, USA 
AGI which manages San José
Airport in Costa RicaHolds a minority stakes in the London-Luton consortium (U.K.), in
Consorcio
Bharat Petroleum, India Holds a minority stake in Cochin International Airport Ltd in India
Bologna Airport (SAB), Italy Owns about 60% of SEAF, the operator of Forli Airport, (Italy)
Bordeaux CCU Airport , France
Fax: <33> (5) 5634 2301 Partner in SALT (Société Aéroportuaire de Lomé-Tokoin), the operator
of Lomé-Tokoin Airport in Togo
British Aerospace plc, U.K.
Fax: <44> (1252) 383 000Owns the Filton airfield near Bristol, U.K.
British Airways, U.K. Owned the Plymouth and Newquay airports through Brymon Airways,
(U.K.); now sold to Sutton Harbour Holdings
CAAS , Singapore
<65> 545 6222Owns and operates the Singapore airports; interested in managing foreign
airports via Singapore Changi Airport Enterprise (SCAE)
Capital Airport Group, Australia Owns and operates Canberra International Airport in Australia
Catullo SpA, Italy Operates the Verona-and Brescia airports in northern Italy
Cintra, Spain
(Concesiones Infraestructuras de
Transporte, S.A.; subsidiary of the
Madrid-based Grupo Ferrovial,
S.A.)Fax: <34> (91) 555 1241Owns 24.5%of the Tribasa consortium which won the concession for
Mexico's nine south-eastern airports – Aeropuertos Sureste ASUR
(Cancún, Cozumel, Huatulco, Mérida, Minatitlán, Oaxaca, Tapachula,
Veracruz, and Villahermosa), the three other partners are Copenhagen
Airports A/S, (Denmark), Grupo Tribasa (Mexican  contractors), and
GTM of France; winner of the Antofagasta Airport/Chile  and Niagara
Falls Airport/USA concessions
Comarco Services, USA
Fax: <l> (714) 796-1802Manages twelve small-carrier and general-aviation airports in the United
States
Connaught Airport Development
Co. Ltd , Ireland
Fax: <353> (94) 67 994Operates Knock International Airport in Co. Mayo/Ireland which was
privately financed and built
Copenhagen Airports A/S,
(through Copenhagen Airport
Development International A/S-CADI), Denmark
Fax: <45> (32) 313 100(Copenhagen Airports A/S hasbeen a private company since1994)Operates the Copenhagen-Kastrup and Roskilde airports, (Denmark);
through its 25.5% equity stake in ITA S.A., partner in the Tribasa
consortium which won the 50-year concession contract for nine airportsin Mexico's south-eastern region - Aeropuertos Sureste (ASUR); bought a
33.3% share in Rygge Sivile Lufthavn A/S in Norway and plans to
convert the Rygge military airfield into a civil airport; was interested inthe Berlin (BBI) airport project, (Germany) and still is in Latin American
airportsS/C/W/163/Add.1
Page 63
Company Activities
Corporación Aeropuertuaria ,
Dominican RepublicOperates Punta Cana International Airport (PUJ) del Este, (Dominican
Republic)
Diversified Asset Management
Group, USAWill own and develop Brown Field near San Diego, California, (USA)
Dragados y Construcciones,
Spain
Fax: <34> (91) 279 2168Owns 29% of the Mexican-Spanish consortium which acquired a 15%
stake in Grupo Aeroportuario del Pacifico (GAP) package of Pacificairports in Mexico, the other partners being AENA, Unión Fenosa, and
the Angeles Group; member of the consortium which operates theinternational terminal at Santiago de Chile's Arturo Benitez International
Airport; participates in the management of Bogotá's Eldorado Airport in
Colombia
Diisseldorf Airport – FDG ,
Germany
Düsseldorf Express AirportFax: <49> (211) 4212205Majority-shareholder (70%) in Mönchengladbach Airport, which it runs
as Düsseldorf Express Airport, (Germany)
FAA , USA Owns Atlantic City Airport (USA), which is managed by Johnson
Controls
FAC – Federal Airports
Corporation , Australia
Fax: <6l> (2) 9667 9962Has operated 21 Australian airports, of which all except Sydney and four
smaller ones have been sold; has provided management assistance at SSR
International Airport, Mauritius through AMS – Airport Management
Services Ltd.
FirstBus, U.K. Owns 51 % of Bristol International Airport, (U.K.); plans to acquire more
airports
Frankfurt Airport – FAG
Airconsult, Germany
Fax: <49> (69) 690 55441Acquired a 20% stake in Flughafen Hannover GmbH, with Nord/LB
holding 10% and the remaining 70% continue to be owned equally by theState of Lower Saxony and the City of Hannover; acquired a 64.9% stake
in Flughafen Halin GmbH, the operator of the Hahn/Germany cargo
airport, and 74.9% of the Hahn Hold ing company; holds a 51% stake in
the Saarbrticken Airport operating company; holds a minority stake in theFAL cargo handling company at Leipzig/Halle Airport; has beenproviding management assistance at Sharjah International Airport sincethe 1970s; provides advisory services for Athens International Airport
S.A. at the new Athens airport (through FASP – Flughafen Athen-Spata
Projektgesellschaft mbH); handling co ntracts at seven Spanish airports
through Ineuropa Handling U.T.E., in which FAG has a 20% stake; holdsa stake in Goldair Aviation Handling in Athens/Greece; holds a 10%
stake in African Cargo Handling Ltd of Nairobi/ Kenya; holds a 25%
stake in the Philippine International Air Terminals, Co. (PIATCO)
consortium for building and operating Terminal 3 at Ninoy AquinoInternational Airport, Manila; interested in managing other airports
throughout Europe and Latin America
Gautschi Group, Switzerland Owns and operates St. Gallen/Altenrhein Airport in Switzerland through
Airport Altenrhein AG
GlobeGround Berlin GmbH
(ex-B.L.A.S. GmbH), Germany in
Latvia
Fax: <49> (30) 3816517Will build, operate and own a cargo terminal at Riga International Airport
Groupe GTM, France
(GTM Concessions)
Fax: <33> (1) 4695 7570(subsidiary of Suez Lyonnaise des
Eaux)Partner in ADP Management (34%), the airport management subsidiary
of Aéroports de Paris. Holder of the concession to operate Phnom PenhAirport in Cambodia. Minority shareholder in the Tribasa consortium
which won the concession for Mexico's nine south-eastern airports
(Cancún, Cozumel, Huatulco, Mérida, Minatitlán, Oaxaca, Tapachula,Veracruz, and Villahermosa), the three other partners are CopenhagenAirports A/S, (Denmark), Grupo Tribasa (Mexican
 contractors), and
Cintra of Spain;S/C/W/163/Add.1
Page 64
Company Activities
Together with ADP, preferred joint bidder for up to 49% of the shares of
a yet-to-be privatized Sukarno-Hatta International Airport,Jakarta/Indonesia.
Hainan Airlines, China Owns 25% of Haikou-Mellan International Airport (China); George
Soros has a 21.2% stake
Hochtief AirPort GmbH,
Germany
Fax: <49> (201) 824 2777Owns 36.1 % of Athens International Airport S.A. (Greece), the operator
of the new Athens airport at Spata, (Greece); purchased a 50% stake in
the Düsseldorf Airport company together with Aer Rianta of Ireland.
Their joint-venture company Airport Partners GmbH is owned 60% by
Hochtief and 40% by Aer Rianta; was leader of the preferred consortium
bidding for the new BBI–Berlin Brandenburg International Airport,
(Germany) and the management of the three existing Berlin airports,
which are to be replaced ultimately by a 100% privatized BBI; in theconsortium, Hochtief has a share of 56.4%, with Flughafen FrankfurtMain AG holding 28.6%, Bankgesellschaft Berlin 10% and ABB AirportTechnologies 5% (retendering planned)
Hutchison Port Holdings, Hong
Kong 
Authority and has management
controlOwns Grand Bahama Airport jointly with the Grand Bahama Airport
Authority and has management control (Bahamas)
IIU, Ireland
Fax: <353> (1) 670 0925
(International Investment &
Underwriting Ltd, owned by
Dermot Desmond)Owns and operates London City Airport, U.K.
Infrastructure Management
Group & Rothschild, USAManages Allegheny County Airport, PA/USA
Infratil International Ltd,
Australia
Infratil NZ Ltd, New Zealand
<64> (4) 473 2388
(subsidiaries of H.R.L. Morrison &
Co., Brisbane, owned 25% by
Lendlease Corp.)Through Infratil Australia Ltd holds a 49.5% stake in Airstralia
Development Group, which manages Perth Airport, and 51 % in Airport
Development Group (ADG) which manages Alice Springs, Darwin andTennant Creek in Australia; partnered with AGI in these projects;
interested in a stake in Hamburg Airport/Germany
Infratil NZ owned 1% of Auckland Int. Airport Ltd before AIAL wentpublic in July 1998 and holds a 66% stake in Wellington Int. Airport Ltd
(WIAL), (New Zealand) through the NZ Airports consortium, in which
Infratil NZ has a 40% stake
Inter-Consult, Tanzania Owns 2% of Kilimanjaro Airports Development Company (KADCO),
(Tanzania), operated under a 25-year concession together with Mott
MacDonald of the U.K. (75%) and the Tanzania Government (1%)
Inverness Air Terminal Ltd, U.K.
(partners in the company are the
M.J. Gleeson Group, Canmore
Partnership, Noble & Company,
and MPM Adams)Has privately financed a GBP 9 million terminal refurbishment project at
Inverness Airport in Scotland, U.K. under the Private Finance Initiative
(PFI)
Johnson Controls Worldwide
Services, Inc .,
Airport Management ServicesDivision
(owned by American Port
Services), USA
Fax: <l> (201) 288-5143Manages and develops Teterboro Airport under contract to PANY&NJ
and manages Atlantic City International Airport in New Jersey;Westchester County Airport and the 60th Street Metroport heliport inNew York City; the FBO AvCenter at the Greater Pittsburgh International
Airport; and Johnson Controls AvCenter at Sandiford Field,
Louisville/Kentucky, (USA)
Kallax Cargo AB, Sweden Has acquired the Luleå-Kallax air base in northern Sweden for
development into a cargo centreS/C/W/163/Add.1
Page 65
Company Activities
Kato Investment Group,  Egypt Developing the new EI Alamein Airport in Egypt on a BOT basis
John Laing Investments, U.K.
Fax: <44> (18 1) 906 5577Equity holder in Birmingham International Airport – BIA Ltd (4%) in the
U.K. and in the Adelaide Airport Ltd consortium which owns the
Adelaide and Parafield airports in Australia
London Supply, Argentina
Fax: <54> (1) 111443Owns and operates Ushuhaia Airport/Tierra del Fuego and five airports in
Neuquén province in Argentina; member of the Consorclo Aeropuertos
Internacionales which owns and operates the new terminal at Punta delEste Airport in Uruguay; partners are Impregilo SpA/Italy
,
NAPA/Canada, and Carlos Ott & Associates/Argentina ; builds and
manages a new duty-free zone at Puerto Iguazúl on the border with Brazil
Lufthansa Cargo, Germany
Fax: <49> (69) 6969 1185Has a 29% stake in a consortium building and operating a cargo terminal
at Shanghai's new Pudong International Airport(China)
Lyon CCI/Airport, France
Fax: <33> (4) Manages Grenoble-St. Geoirs Airport in addition to the two Lyon
airports, Satolas (international) and Bron (general aviation)
Malaysia Airports Bhd, Malaysia
Fax: <60> (3) 755 2379 Operates 21 airports in Malaysia; holds a 40% stake in CAMS which
operates Phnom Penh-Pochentong Airport in Cambodia; interested in
South African airports
Manchester Airport plc, U.K.
Fax: <44> (161) 489 3647Manages the Adelaide and Parafield airports in Australia owned by the
Adelaide Airport Ltd consortium, together with Serco Asia Pacific;
acquired an 82.7% stake in the former municipally-owned HumbersideAirport, (U.K.), interested in Mexican airports
Marseille CCI/Airport , France
Fax: <33> (4) 4214 2724Partner in SEGA.P, a manager of airports in Africa (see there)
Mott MacDonald Group, U.K.
Fax: <44> (181) 681 5706Majority stakeholder (75%) of Kilimanjaro Airports Development
Company (KADCO), (Tanzania), operated under a 25-year concession
together with Inter-Consult of Tanzania and the Tanzania Government
National Car Parks, U.K. Equity holder in Birmingham International Airport – BIA Ltd (4.25%) in
the U.K.
National Express Group Plc,
U.K.
(Airports Division)
Fax: <44> (1332) 263 791Owns the East Midlands & Bournemouth airports in the U.K.; provided
management consultancy at Subic Bay/Philippines for a 12-month period;
signed a lease agreement to operate Stewart International, NY/USA;
interested in Australian, Latin American and other U.K. airports
Ogden Aviation, USA
Fax: <l> (212) 868-5895Managing partner (29%) in the MASC-Ogden ground-handling joint
venture, Macau International Airport, (Macau); partner in the
Aeropuertos Argentina 2000 S.A. consortium, (Argentina) that purchased
33 Argentinian airports; BOT partner in runway consortium at Bogotá
Airport/Colombia;
Managing partner in the 'Aeropuertos Dominicanos Siglo XXI, S.A.'consortium that manages four airports in the Dominican Republic: Santo
Domingo ('Las Americas'), Puerto Plata ('Gregorio Luperón'), Samaná('Arroyo Barril'), and Barahona ('Maria Montez');Partner in ADR Handling at the Rome airports, (Italy); manages the fuel
facilities at Tocumen International/Panama and San Juan-Luiz Muñoz
Marin/Puerto Rico; operates cargo terminals, e.g. in Amsterdam (The
Netherlands), Barcelona, Madrid (Spain ), Prague (Czech Republic ), and
other airport facilities. Altogether, Ogden is present at 121 airports in 25countries.
Peel Airports Ltd, U.K.
(subsidiary of Peel Holdings, the
owners of the Manchester ShipCanal)
Fax: <44> (161) 629 8332Owns 76% of Liverpool Airport, U.K. after having acquired British Aero
space (Liverpool Airport) Ltd; acquired the Doncaster-Finningly RAF
station in South Yorkshire which is to be transformed into a regionalairport (Doncaster International)S/C/W/163/Add.1
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Company Activities
The Perot family, USA Owns Alliance Airport in Texas, (USA) where American Airlines has
built a USD 480 million maintenance base
Piaggio Aero Industries, Italy
Fax:<39>(010)65 0160Owns 13% of SAT, the operator of Pisa Airport, Italy
Regional Airports Ltd, U.K.
Fax: <44> (125 6) 862 115Owns and operates Southend Airport (London Express Airport), Exeter
Airport, and London Biggin Hill Airport, U.K.
San Francisco Int. Airport, USA
Fax: <l> (415) 794-5383Leads the "Inter Airport consortium which has won a 20-year concession
to operate the four international airports in Honduras
(Tegucigalpa-Toncontín, San Pedro Sula-La Mesa/'Ramón VilledaMorales', La Celba/Bay Islands-Golosón, and Roatán/Bay Islands 'Juan
Manuel Gálvez')
SATS , Singapore
(Singapore Airport Terminal
Services (Pte) Ltd)Fax: <65> 542 1197 Has a 24.5% stake in Asia Airfreight Terminal Co Ltd (AAT), Hong
Kong International Airport, (Hong Kong, China) and a 30% stake in Tan
Son Nhat Cargo Services Ltd(TCS), Ho Chi Minh City/Vietnam; has a
joint venture in Beijing/China since 1995, Beijing Aviation Ground
Services (BGS)
SCAE, Singapore
(Singapore Changi Airport
Enterprise Pte Ltd)
Fax: <65> 545 5369Acquired a 7.14% stake in Auckland International Airport in New
Zealand, previously held by North Shore City Council
Schiphol Group, The Netherlands
(N.V. Luchthaven Schiphol, the
parent, is owned 75.8% by the
State of the Netherlands, 21.8% by
the City of Amsterdam, and 2.4%by the City of Rotterdam)Fax: <3l> (20) 6014602Schiphol Group owns and operates the Amsterdam-Schiphol and Lelystad
airports, operates Rotterdam Airport, and acquired a 51% stake inEindhoven Airport, all in The Netherlands; Schiphol Group may take a
stake in the new Brussels International Airport Company (BIAC) with
whom it has a co-operative IT and communications alliance; through itsSchiphol International division, it is a partner in the managementcompanies of Brisbane Airport in Australia (15.38% stake in BACL,
which has a 50-year lease) and of Cartagena Airport/Colombia (now
handled by AENA of Spain); management contract with Angkasa Pura
II/Indonesia (nine airports), Banjul-Yundurn Int./The Gambia , and
Kilimandjaro Int./Tanzania; through Schiphol USA LLC manager of the
future International Air Terminal at JFK International, New York withpartners LCOR Inc. and Leliman Brothers; holds a 1% stake in ViennaInternational Airport plc, (Austria); formed an alliance with Flughafen
Frankfurt AG, (Germany); interested in managing other European, U.S.,
Latin American and Australasian airports
SEA SpA - Milan Airports, Italy
Fax: <39> (2) 7485 2054Owns and operates the two Milan airports, Linate and Malpensa, as well
as Bergamo-Orio Airport (49.98% share of Sacbo), (Italy); acquired 33
airports in Argentina as a member of the Aeropuertos Argentinas 2000
S.A. consortium (28%); acquired a 12.5% stake in Rimini Airport –
Aeradria from Alitalia, raising its stake to 30%; owns 5% of GESAC, theoperator of Naples Airport, and 0.96% of SAGAT, the operator of TurinAirport; interested in managing airports elsewhere in Italy (e.g. Trieste,
Palermo) and Latin America; provides consultancy in Italy and abroad
SEGAP, France
(owned 50% by Sofréavia-Service
and Marseille Int. Airport)Fax: <33> (1) 4638 2678Holds a 35% stake in AERIA (Aéroport International d'Abidjan S.A.)
which operates Abidjan Airport/Ivory Coast and a 34.7% stake in ADL
S.A. (Aéroport de Libreville) which operates Libreville Airport/Gabon
Serco, U.K. through Serco Asia Pacific partner in the Adelaide Airport Ltd
consortium, together with Manchester Airport plc, (U.K.)
Short Brothers plc, U.K.
(owned by Bombardier Aerospace
Airport Ltdof Canada)Fax: <44> (232) 454 406Owns and operates Belfast City Airport (STOLport) through Belfast City,
(U.K.)S/C/W/163/Add.1
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Company Activities
Stagecoach Aviation Group, U.K.
(subsidiary of Stagecoach Holdings
Plc)
Fax: <44> (173 8) 4422 111Owns Glasgow Prestwick International Airport, (U.K.), operated by PIK
Ltd; interested in developing other airports
Sutton Harbour Holdings plc,
U.K.
Fax: <44> (1752) 205 403Purchased Plymouth City Airport Ltd in the U.K., together with the
management contract for Newquay Cornwall Airport from British
Airways in April 2000
Sverdrup Aviation, USA
Fax: <l> (314) 552-8086.Operates the new MidAtlantic Airpor t, the second-largest privatized
airport in the USA
TAG Aviation SA, Switzerland
(subsidiary of TAG-Heuer watch
makers and aviation sponsors of
Switzerland and theGeneva/Switzerland Saudi familyAziz Ojeh)Fax: <4l> (22) 717 0007Manages and plans to develop the former Ministry of Defence aerodrome
at Farnborough, U.K. into a business aviation centre under a conditional
leasing agreement; operates the Prangins/V1) general aviation airfieldnear Geneva/Switzerland
TBI Airport Holdings Ltd, U.K.
(now owns AGI)
Fax: <44> (1222) 361 555Owns and operates Cardiff-Wales & Belfast International/U.K.; owns
Central Florida Terminals, the owner and operator of Orlando Sanford
International Airport, (USA); acquired 90.1 % of Skavsta Airport in
Sweden; by acquiring AGI, gained  access to airports in Australia , Bolivia ,
Costa Rica, North America  and to Luton/U.K ., i.e. a total of 33 airports;
interested in other airports worldwide
TradePort International Corp .,
Canada
Fax: <l> (905) 679 2100Manages Hamilton/Mount Hope Airport in Ontario/Canada under a
40-year concession
Tribasa, Mexico
(construction company owned by
the Pefialoza family)The Tribasa consortium had won the 50-year concession contract for nine
airports in Mexico's south-eastern region – Aeropuertos Sureste (ASUR),
together with three other partners: Copenhagen Airports A/S, (Denmark),
Cintra of Spain and GTM of France
Unión Fenosa, Spain & Mexico Member of Grupo Aeroportuario del Pacifico (GAP) with operates the
Pacific airports in Mexico, the other partners being AENA, Dragados, and
the Angeles Group;
Via GTI (Paribas Group), France
Fax: <33> (1) 4129 7220 Partner in the consortium which manages Europort Vatry, the
multi-modal airport in France; manages the new Angers-Marcé Airport in
France and ground transport services at a number of French airports
Vienna International Airport,
Austria
(see: ACV )(Vienna International Airport plc, (Austria) has been a private company
since 1992)
Warsaw Airport – Polish Airports
State Enterprise, Poland
Fax: <48> (22) 846 6824Operates Mazury Airport at Szymany in Poland through Port Lotinczy
Mazury S.A.
Wayss & Freytag , Germany
Fax: <49> (69) 792 9491Sold to FAG (Frankfurt Airport) its 74.9% stake of the Halin Airport
holding company, Holding Unternelmien Halm GmbH & Co. KG, which
in turn holds 10% of the Halin Airport company, Flughafen Hahn GmbH;the Rhineland-Palatinate government holds 25. 1 % of the twocompanies, (Germany)
Westralia Airports Corp.,
Australia 
National Airport and Cocos
(Keeling) Island AirportOperates Perth International Airport; manages Christmas Island
International Airport and Cocos (Keeling) Island Airport, (Australia)
Wiggins Group plc, U.K.
Fax: <44> (171) 493 0189Owns Kent International Airport, Manston/U.K. and will develop it as
London-Manston Airport in partnership with MEPC; acquired a 50-year
lease of Sinyma Airport, Nashville, IN/USA, through its PlaneStation
U.S. subsidiary; plans to acquire long leaseholds at the airports inGermany, the Czech Republic
 (Ostrava-Mošnov & Plzen-Lin) and ItalyS/C/W/163/Add.1
Page 68
Company Activities
World Investment Group, Egypt Will develop the Farafira Oasis and AI Bahria Oasis airports in Egypt
under BOT projects
YVR Airport Services Ltd –
YVRAS, Canada (100% owned by
the Vancouver International
Airport Authority; set up in 1994 asa for-profit company)Fax: <l> (604) 276-6070Manages Bermuda International Airport and six local Canadian airports
(Cranbrook, BC; Fort St. John, BC; Hamilton, ON; Grande Prairie, AL;
Kamloops, BC; Moncton, NB) via incentive contracts and a management
fee. Won the 15-year Santiago/Chile passenger terminal concession as a
member of the SCL Terminal Aéreo Santiago consortium, formedtogether with Agencias Universales S.A. (Agunsa; 47%) and SabcoAdinfflistrador de Fondos de Inversión S.A. of Chile (13%), contractors
FCC and Dragados of Spain (30%), with YVRAS holding 10%.
Won a 15-year contract to manage the new terminal and carpark ofProvidenciales International Airport in the Turks & Calcos Islands.
Partner in the 'Aeropuertos Dominicanos Siglo YXl, S.A.' consortium thatmanages four airports in the Dominican Republic: Santo Domingo ('Las
Americas'), Puerto Plata ('Gregorio Luperón'), SamanS ('Arroyo Bamil'),
and Barahona ('Maria Montez').
Partner in the consortium for a 25-year concession to manage and developMontevideo's Carrasco Int. Airport. Adviser to Wellington Airport/New
Zealand on commercial and retailing matters; bidding for airports in Latin
America and Canada ; providing consultancy in China , Norway , Oman ,
Russia, Thailand ; parent company owns and operates Vancouver
International Airport, (Canada)S/C/W/163/Add.1
Page 69
ANNEX III
STATEMENT BY THE COUNCIL
ON AIRPORT CHARGES
Introduction
4. Since the last review in 1981 of the Council's recommendations on charges for aeronautical
facilities provided for international civil aviation, the financial position of the scheduled airlines as a
whole has fluctuated, although it has remained po sitive for most of these years.  Landing and
associated airport charges expressed as a percentage of total airline operating expenses have remained
fairly stable at just over 3.5 per cent.
5. The number of airports where revenues exceed expenses has continued to grow, principally
where high traffic volumes and high levels of facility utilization are being experienced, and where
strong emphasis has been placed on the development of airport revenues from non-aeronautical
sources (mainly concessions and rentals).  However, the large majority of international airports still
operate at a loss, a prevalent reason being under-utilization of capacity.
6. Experience gained worldwide indicates that where airports (and air navigation services) have
been operated by autonomous authorities, almost all of which have been established by governments,
their over-all financial situation and managerial efficiency have generally tended to improve.
Governments may therefore wish to explore the possi bility of establishing autonomous authorities to
operate their airports where this is in the best interest of providers and users.
7. Guidance on the organizational structures of airports is contained in the ICAO Airport
Economics Manual (Doc 9562), Chapter 2.  In this context, the Council also wishes to stress the
importance of observing all relevant ICAO practices and principles, notably those specified in the
Convention on International Civil Aviation, its Annexes and in these Council Statements.
8. The financial situation of airports is expected to continue to be affected by other
developments.  These include the liberalization of air services, airline concentration including
mergers, changes in approaches to financing with  airports being expected to assume increasing
responsibility for financing investments in new airports and airport expansion projects, capacity
management, airport and airspace congestion, and environmental concerns.
9. Under these circumstances many airport authorities may find it necessary to increase their
charges and place greater emphasis on further developing revenues from non-aeronautical sources.
However, recognizing that users face restrictions with regard to their choice of particular airports, the
Council recommends that caution be exercised when attempting to compensate for shortfalls in
revenue and that account be taken of the effects of increased charges on air carriers which may need
to adjust their tariffs to deal with increases in cost arising from higher charges.  The Council also
considers that there should be a balance between the respective interests of airports and airlines in
view of the importance of the air transport system to States and its influence in fostering economic,
cultural and social interchanges between States.  This applies particularly during periods of economic
difficulty.  The Council therefore recommends that States should encourage increased co-operation
between airports and air carriers to ensure that economic difficulties facing both of them are shared in
a reasonable manner.
10. The financial situation of most airports in less advanced economies remains particularly
challenging.  Although traffic is increasing, the majority of these airports are still greatly under-
utilized and revenues frequently fall short of covering even the cost of maintenance and operation.S/C/W/163/Add.1
Page 70
The provision of capital for development constitutes a further problem, and difficulties are also
experienced in recruiting sufficient numbers of qualified personnel.  The Council will therefore
continue to take appropriate action for obtaining more assistance for the States facing these challenges
in planning and financing airport facilities as well as with regard to the provision of adequate human
resources.
11. The broader economic impact of international airports is a particular aspect of their operation
which continues to deserve close attention.  Airports by virtue of their function and location have
effects extending beyond the users they directly serve, and the Council considers that, in
contemplating the establishment and development of such facilities, States should carefully weigh
their advantages and disadvantages from a cost-benefit standpoint: for example, adverse
environmental effects such as airport noise may be considered a disadvantage while, on the other
hand, industrial development, tourism, transportation and communication may be considered asadvantages.  Specific note should also be taken of the direct and indirect economic benefits to the
public and the community arising from an airport.  National policies in the matter of reducing or
eliminating disadvantages will vary, but governme nts, when contemplating action in any particular
situation, should however recognize that the responsibility for remedies does not necessarily fall
solely on any one of the parties involved.
12. The Council also expresses concern over the proliferation of charges on air traffic and the
retaliatory effects this could lead to and recommends that States should:
i) Impose charges only for services and functions which are required for international 
civil aviation.
ii) Refrain from imposing charges which discriminate against international civil aviation
in relation to other modes of international transport.
The cost basis for airport charges
13. As a general principle it is desirable, where an airport is provided for international use, that
the users shall ultimately bear their full and fair share of the cost of providing the airport.  It is
therefore important that airports maintain accounts which provide information which is adequate for
the needs of both airports and users and that the facilities and services related to airport charges be
identified as precisely as possible.  In determinin g and allocating the total cost to be met by charges
on international air services, the list in Appendix 1 may serve as a general guide to the facilities and
services (including satellite services) to be taken into account.  Airports should maintain accounts thatprovide a satisfactory basis for determining and a llocating the costs to be recovered, should publish
their financial statements on a regular basis and should provide adequate financial information to
users in consultations.  The guidance on accounting contained in the ICAO Airport Economics
Manual, Chapters 3 and 4, may be found useful in this general context although there are other
approaches to this problem.
14. In determining the cost basis for airport charge s the following principles should be applied:
i) The cost to be shared is the full cost of providing the airport and its essential ancillary
services, including appropriate amounts for cost of capital and depreciation of assets,
as well as the cost of maintenance and operation and management and administration
expenses, but allowing for all revenues, aeronautical or non-aeronautical, accruingfrom the operation of the airport to its operators.S/C/W/163/Add.1
Page 71
ii) In general aircraft operators and other airport users should not be charged for
facilities and services they do not use, other than those provided for and implemented
under the Regional Plan.
iii) Only the cost of those facilities and services in general use by international air
services should be included and the cost of facilities or premises exclusively leased or
occupied and charged for separately should be excluded.
iv) An allocation of costs should be considered in respect of space or facilities utilized by
government authorities.
v) The proportion of costs allocable to various categories of users, including State
aircraft, should be determined on an equitable basis, so that no users shall be
burdened with costs not properly allocable to them according to sound accounting
principles.
vi) Costs related to the provision of approach and aerodrome control should be separately
identified.  (Principles applicable to the recovery of such costs are addressed more
fully in the Statement on Charges for Air Navigation Services.)
vii) Airports may produce sufficient revenues to exceed all direct and indirect operating
costs (including general administration, etc.) and so provide for a reasonable returnon assets (before tax and cost of capital) to contribute towards necessary capital
improvements.
viii) The users' capacity to pay should not be taken into account until all costs are fully
assessed and distributed on an objective basis.  At that stage the contributingcapability of States and communities concerned should be taken into consideration, it
being understood that any State or charging authority may recover less than its full
costs in recognition of local, regional or national benefits received.
Airport charging systems
15. Charging systems at international airports should be chosen in accordance with the following
principles:
i) Any charging system should, so far as possible, be simple and suitable for general
application at international airports.
ii) Charges should not be imposed in such a way as to discourage the use of facilities
and services necessary for safety.
iii) The charges must be non-discriminatory both between foreign users and those having
the nationality of the State of the airport and engaged in similar international
operations, and between two or more foreign users.
iv) Where any preferential charges, special rebates or other kinds of reduction in the
charges normally payable in respect of airport facilities are extended to particular
categories of users, governments should ensure, so far as practicable, that any
resultant under-recovery of costs properly allocable to the users concerned is notshouldered onto other users.S/C/W/163/Add.1
Page 72
v) To avoid undue disruption to users, increases in charges should be introduced on a
gradual basis.  However, it is recognized that in some circumstances a departure from
this approach may be necessary.
vi) Where charges are levied by different authorities at an airport, they should, so far as
possible, be consolidated into a single charge or a very small number of different
charges, the combined revenues being distributed among the authorities concerned in
a suitable way.
vii) Maximum flexibility should be maintained  in the application of all charging methods
to permit introduction of improved techniques as they are developed.
viii) Airport charges levied on international general aviation should be assessed in a
reasonable manner, having regard to the cost of the facilities needed and used and the
goal of promoting the sound development of international civil aviation as a whole.
16. The Council recommends:
i) That under normal circumstances, user charges should be expressed and payable in
the local currency of the State concerned.
ii) That under special circumstances, for example where economic conditions are not
stable, when a State proposes, or allows, denomination of user charges in other thanlocal currency, airlines could apply the same currency of denomination, using the
same exchange rate, for their local ticket sales.
iii) That remittance problems be resolved.
Landing charges
17. The Council recommends that the following prin ciples be taken into account when landing
charges are established:
i) Landing charges should be based on the weight formula, using the maximum
permissible take-off weight as indicated in the certificate of airworthiness (or other
prescribed document) as the basis for assessment.  However, allowance should bemade for the use of a fixed charge per aircraft or a combination of a fixed charge with
a weight-related element, in certain circumstances such as at congested airports and
during peak periods.
ii) The landing charge scale should be based on a constant rate per 1,000 kilograms or
pounds in weight, but the rate may be varied at a certain level or levels of weight if
considered necessary.
iii) Where charges for approach and aerodrome control are levied as part of the landing
charge or separately, they could take aircraft weight into account but less than indirect proportion.  (Principles applicable to such charges are addressed more fully in
the Statement on Charges for Air Navigation Services.)
iv) No differentiation in rates should be applied for international flights because of the
stage length flown.S/C/W/163/Add.1
Page 73
v) A single charge should be applied for costs of as many as possible of airport-provided
facilities and services for normal landing and take-off of aircraft (generally excluding
hangars and certain terminal-building and other facilities as are normally handled by
leases or other usual commercial practices).
vi) Where restrictions on aircraft payload are imposed by airport limitations,
consideration should be given locally to adjusting the landing charge indicated by the
weight scale in cases where the restrictions are of a severe and long-lasting nature.
vii) The ordinary landing charge should cover the use of lights and special radio aids for
landing where these are required, since it is in the interest of safety that aircraft
operators should not be discouraged from utilizing aids by the imposition of separatecharges for their use.  If separate charges are made for facilities of this kind, they
should not he levied on the basis of optional use but should be uniformly imposed on
all landings occurring during periods established by the airport operators.
Parking and hangar charges
18. It is recommended that the following principles he applied in establishing parking and hangar
charges:
i) For the determination of charges associated with use of parking, hangar and
long-term storage of aircraft, maximum pe rmissible take-off weight and/or aircraft
dimensions (area occupied) and length of stay  should be used so far as possible as the
basis.
ii) The period of free parking time for aircraft immediately following landing should be
determined locally by considering aircraft scheduling, space availability and otherpertinent factors.
Passenger-service charges
19. The Council reaffirms that passenger-service charges are not objectionable in principle and
recognizes that the revenue accrued from such charges is essential to the economy of a significant
number of airports.  There are however practical objections to the collection of passenger-servicecharges directly from the passenger, especially at large airports, and the difficulties associated with
that mode of collection will become more and more acute with the continuing growth of passenger
traffic and the increasing number of high-capacity aircraft operated, especially at busy terminal
buildings during peak hours.  Methods to alleviate these difficulties have been found and are
implemented at a number of airports, and the Council considers that these could serve as useful guidesto other airports experiencing similar difficulties.  The Council also emphasizes the need for
consultations between airport authorities and airlines at the local level, with a view to alleviating
collection problems.  More specifically, the Council considers that where the collection of a
passenger-service charge directly from passengers at an airport gives rise to facilitation problems, this
charge should be levied on the airlines where practicable.
Security charges
20. The Council notes that States are responsible for ensuring the implementation of adequate
security measures at airports pursuant to the provisions of Annex 17 and that they may delegate the
task of providing individual security functions to such agencies as airport authorities, airlines andlocal police.  The Council also notes that States may determine in which circumstances and the extent
to which the costs involved in providing security facilities and services should be borne by the State,S/C/W/163/Add.1
Page 74
the airport authorities or other responsible agencies.  With reference to the recovery of security costs
from the users, the Council recommends that the following general principles be applied:
i) Consultations should take place before any security costs are to be assumed by
airports, airlines or other entities.
ii) The authorities concerned may recover the costs of security measures at airports from
the users in a fair and equitable manner, subject to consultation.
iii) Any charges or transfers of security costs should be directly related to the costs of
providing the security services concerned and should be designed to recover no more
than the relevant costs involved.
iv) No discrimination should be exercised between the various categories of users when
charging for the level of security provided.  Additional costs incurred for extra levels
of security provided regularly on request to certain users may also be charged to these
users.
v) When the costs of security at airports are recovered through charges, the method used
should be discretionary, but such charges should be based either on the number of
passengers or on aircraft weight, or a combination of both factors.  Security costs
allocable to airport tenants may be recovered through rentals or other charges.
vi) Charges may be levied either as additions to other existing charges or in the form of
separate charges but should be subject to separate identification of costs and
appropriate explanation.
Noise-related charges
21. The Council recognizes that although reductions are being achieved in aircraft noise at source,
many airports will need to continue the application of noise alleviation or prevention measures.  The
Council considers that the costs incurred in impl ementing such measures may, at the discretion of
States, be attributed to airports and recovered from the users and that States have the flexibility to
decide on the method of cost recovery and charging to be used in the light of local circumstances.  In
the event that noise-related charges are to be levied, the Council recommends that consultationsshould take place on any items of expenditure to be recovered from users and that the following
principles be applied:
i) Noise-related charges should be levied only at airports experiencing noise problems
and should be designed to recover no more than the costs applied to their alleviation
or prevention.
ii) Any noise-related charges should be associated with the landing fee, possibly by
means of surcharges or rebates, and should  take into account the noise certification
provisions of Annex 16 in respect of aircraft noise levels.
iii) Noise-related charges should be non-discriminatory between users and not be
established at such levels as to be prohibitively high for the operation of certain
aircraft.S/C/W/163/Add.1
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Consultation with users regarding
charges and airport planning
22. The Council recognizes the desirability of consultation with airport users before significant
changes in charging systems or levels of charges are introduced, it being understood that the purpose
of consultation is to ensure that the provider gives consideration to the views of users and the effect
the charges will have on them; that consultation implies discussions between users and providers in an
effort to reach general agreement on any proposed charges; and that, failing such agreement, airport
authorities would continue to be free to impose the charges concerned.  It is not possible to lay down a
specific procedure for consultations of this kind ow ing to the diversity in the administrative, financial
and legal frameworks within which airports function, but the Council recommends that:
i) When any significant revision of charges or imposition of new charges is
contemplated by an airport operator or other competent authority, appropriate prior
notice should, so far as possible, be given at least two months in advance to the
principal users, either directly or through their representative bodies, in accordance
with the regulations applicable in each State.
ii) In any such revision of charges or imposition of new charges the airport users should,
so far as is possible, be given the opportunity to submit their views to and consult
with the airport operator or competent authority.  For this purpose the airport users
should be provided with adequate financial information.
iii) Reasonable advance notice of the final decision on any revision of charges or
imposition of new charges should be given to the airport users.  This period of notice
should take into account the implications for both the users and the airport.
23. The Council furthermore considers it desirable in the light of the enormous and
ever-increasing cost of new airports and major developments at existing airports that the regular users
or their representative organizations be consulted from the beginning of such projects.  Equally, in
order that airport authorities may better plan their future financial requirements, airport users,
particularly airlines, should for their part provide advance planning data to individual airport
authorities on a 5- to 10-year forecast basis relating to future types, characteristics and numbers of
aircraft expected to be used; the anticipated growth of passengers and cargo to be handled; the specialfacilities which the airport users desire; and other relevant matters.  Such planning could best be
accomplished by two-way discussions between airports and airlines, either directly or through their
respective representative organizations.
Development of revenues from concessions,
rental of premises and 'free zones'
24. The Council recognizes the continuing importance to airports of income derived from such
sources as concessions, rental of premises and "free zones".  The Council recommends that, with the
exception of concessions that are directly associated with the operation of air transport services, such
as fuel, in-flight catering and ground handling, the full development of revenues of this kind beencouraged having regard to the need for moderation in prices to the public, the requirements of
passengers and the need for terminal efficiency.  In the development and determination of the fees for
concessions directly associated with the operation of air transport services, the Council also
recommends that consideration be given to the relevant guidance contained in the ICAO Airport
Economics Manual, Chapters 4 and 6.  All  possibilities for developing airport concession revenues
should be studied and ICAO should be kept informed of practices and conclusions in this regard so
that the benefit of experience may be made available to all.S/C/W/163/Add.1
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Fuel concession fees
25. The Council recommends that where fuel "throughput" charges are imposed, they should be
recognized by airport authorities as being concession charges of an aeronautical nature and that fuel
concessionaires should not add them automatically to the price of fuel to aircraft operators, although
they may properly include them as a component of their costs in negotiating fuel supply prices with
aircraft operators.  The level of fuel "throughput" charges may reflect the value of the concessions
granted to fuel suppliers and should be related to the cost of the facilities provided, if any.
Alternatively, consideration may be given, where feasible, to replacing fuel throughput charges by
fixed concession fees reflecting the value of the concession and related to the costs of the facilities
provided, if any.  The Council also recommends that any such charges or fees where imposed should
be assessed by airport operators in such a manner as to avoid discriminatory effects, either direct orindirect, for both fuel suppliers and aircraft operators and to avoid their becoming an obstacle to the
progress of civil aviation.
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