Opinion of the Economic and Social Committee on the 'Proposal for a Council Directive on Airport Charges` (98/C 73/08)

On 11 July 1997 the Council decided to consult the Economic and Social Committee, under Article 84(2) of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Transport and Communications, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 12 November 1997. The rapporteur was Mr von Schwerin.

At its 350th plenary session (meeting of 10 December 1997) the Economic and Social Committee adopted the following opinion by 106 votes to 3, with 7 abstentions.

1. Introduction

The adoption of the third civil aviation package by the Council in July 1992 represents the final stage in the liberalization of the aviation sector within the framework of the completion of the Internal Market. The new market organization makes it essential that ancillary aspects of air transport, such as groundhandling services, computerized reservation systems, air traffic management and slot allocation, meet the requirements of the Single Market. This is also the case with airport charging systems.

The Commission feels that the proposal for a directive will create a Community framework for airport charges based on the principles set out below.

The directive will basically apply to all Community airports open to commercial traffic where the annual volume of traffic is at least 250 000 passenger movements or 25 000 tonnes of freight.

1.1. Cost-relatedness

1.1.1. Because the airport management body is in a monopoly situation as regards the provision of airport facilities and services for which charges are levied, it is necessary that charging systems set the level of charges in a reasonable relation to the cost of the facilities and services which these charges are intended to cover.

1.1.2. The level of charges should be in a reasonable relation to the cost of the facilities and services provided, allowing for a reasonable return on invested capital and the proper depreciation of assets. They serve to cover the costs incurred by the relevant airport.

1.2. Transparency

1.2.1. In order to ensure that both the principles of non-discrimination and cost-relatedness are properly implemented and complied with, transparency requirements will be essential to complete the Community framework.

1.2.2. The exchange of information between airports and users should enable air carriers to be better informed about the services provided by the airport management body and their cost and airports must be enabled to take better account of airlines' future needs when planning infrastructure extensions.

1.2.3. This is the precondition for an economically active management both of airports and of air carriers, and corresponds to the requirements of the basic principles laid down by the International Civil Aviation Organization (ICAO), more particularly in Article 15 of the Convention on International Civil Aviation signed on 7 December 1944 in Chicago, as well as in the Statement by the Council on Charges for Airports and Air Navigation Services (ICAO Doc. 9082) and included in the 'Airport Economics Manual` (ICAO Doc. 9562).

1.2.4. The principle of transparency should be introduced and applied in such a way as to take account of practices and procedures already in use at airports. All this will help to make the air transport system more efficient, especially for passengers but also for the shipment of air freight.

1.3. Non-discrimination

1.3.1. The implementation of the Single Market requires the abolition of any form of discrimination between air traffic services within the EU, since these are incompatible with the principles of the Single Market. Member States are called upon to take all the measures necessary to ensure that the same level of airport charges is applied at airports to equivalent intra-Community air services in terms of the aircraft type and/or characteristics, the distance flown and/or the administrative and customs formalities.

1.3.2. Current differences in the treatment of equivalent intra-Community services must be eliminated.

1.4. Procedure for modulating charges

1.4.1. Rational airport management and the requirement of sustainable mobility should enable airports to tailor charges to demand, available capacity and environmental protection requirements. The proposal also provides for the introduction of a compulsory consultation process between airports and their users, which must be implemented before any adjustment to charges.

2. Gist of the Commission proposal

2.1. The provisions of this proposal are to apply to all airports and airport systems subject to the provisions of the Treaty and open for commercial traffic. For smaller airports there are to be limits with regard to cost-relatedness, modulations of charges, transparency and consultations.

2.2. The concept of airports and airport systems derives from Annex II to Council Regulation (EEC) No 2408/92 of 23 July 1992. The other terms are as far as possible identical to the definitions in Council Directive No 96/67/EC of 15 October 1996 on access to the market in ground handling services at airports in the Community.

2.3. The Member States should take all necessary measures to stop discrimination against users (air carriers) in connection with charges at airports within the Community.

2.4. The Member States have to develop a procedure that discloses whether charges are fair or not. The Commission feels that information should, in principle, be provided on:

- the cost of financing the facilities, including depreciation in the value of the assets during the period concerned and the financing of any facilities for which the project and the date of commencement of the works have been duly agreed and, where appropriate, any administrative permits have been issued;

- the financial charges;

- the expenditure on operation and maintenance;

- the general administrative charges and various taxes;

- a reasonable return on the capital invested.

Particulars on the regional development of an airport are approved.

2.5. Without prejudice to the application of the competition rules of the Treaty, the airport charges applicable in the major national airport of a Member State are established at a level which permits airport management bodies, in order to promote economic and social cohesion, to support financially the levels of airport charges in regional airports in the same Member State.

2.6. The efficient operation of many small airports, which play a key role in the Community's economic and social cohesion, requires considerable and regular state or local authority support or, in certain cases, financial support from larger airports in order to avoid introducing excessively heavy charges. Moreover, the number of carriers serving these small airports is very limited and they may often have daily contacts with the management body.

2.7. The costs should be determined using the principles of accounting and evaluation generally accepted in each of the Member States.

2.8. It is possible to include the environmental costs due to air traffic and modulate the charges to reflect the requirements in terms of management of the airport facilities or any changes in demand and use of the airport during a given period.

2.9. Of course, these shall not lead to additional revenue.

2.10. The airport management body should modulate charges in a transparent and non-discriminatory manner. In this connection it may:

- take account of all or part of its income that is not derived from airport charges when establishing the total levy of its charges; and

- grant discounts in accordance with the provisions of the Treaty.

2.11. There are factors that should be made known to airport users (air carriers) when setting charges. These are:

- a clear list of the various services provided by the airport in return for the amount requested and the method of calculation used by the airport's management body;

- the amount of each category of charges collected at the airport and the total number of staff deployed to services which give rise to the collection of charges; and

- forecasts of the situation at the airport as regards charges, traffic growth and any proposed investments.

2.12. To help airport planning, Member States should see that airport users (air carriers) provide the following information:

- forecasts as regards traffic;

- forecasts as to the composition of their fleet;

- their development projects at the airport; and

- their requirements at the airport concerned.

2.13. The Member States should take the necessary steps to see that consultations are held at each airport at least once a year between the airport management body and airport users (air carriers), with the aim of going into the charging system or level, especially in the event of changes. Consultations should be held at least two months before any change in the system or the level of charges.

2.13.1. Member States shall also ensure that airport users are able to request to be consulted a second time.

2.14. If national provisions are violated, the Member States should be obliged to apply effective and appropriate sanctions.

2.15. The directive is to be incorporated into national law by 1 January 2002 at the latest. The Member States are obliged to tell the Commission what legal provisions are to be used for this.

3. General comments

3.1. The ESC welcomes the Commission's initiative aimed at bringing more transparency into the relationship between charges and services at airports within the Community that are covered by this directive.

The Commission fits in here with the ESC's views as expressed in point 3.2 of its Opinion () on the Proposal for a Council directive on access to the groundhandling market at Community airports:

'Initially it will be necessary to establish business transparency. It will be impossible to contemplate any further measures for opening up the market until transparency has been created and one can see how services relate to prices at the moment.`

3.2. The Commission's view that airports are becoming increasingly important for the economic development of regions and for business and passenger traffic is shared. They play an important role in maintaining a region's existence, yet they have to operate more and more in a competitive market. For this, framework conditions that ensure fair treatment must be guaranteed. This includes maintaining a proper balance between the rights and duties of airports and airport users (air carriers). Care should be taken to see that a dominant market position is not abused.

3.3. The ESC considers that any possible improvement of cost structure for reasons of greater transparency must not be allowed to lead to higher administrative input in airports or from national authorities. It therefore feels, for instance, that consultation is only necessary when there is an need for it, as when infrastructure changes or modifications to charges are envisaged.

3.4. The ESC assumes that existing arrangements at national level are sufficient to implement penalties at national level in the event of infringements. The Commission is asked to illustrate the relevant possibilities. Extra red tape would be contrary to the aims of this directive!

3.5. Member States where liberalization is already underway or completed need take no measures to comply with EU legal requirements.

3.6. As far as the current situation in the EU is concerned, the ESC is in favour of distinguishing between airport charges and the usual national taxes. Here too the aim should be EU-wide harmonization in order to create a level playing field. As regards airport charges, the thing is to harmonize the criteria for adjusting charges.

3.7. The ESC feels that the proposal should explain more clearly what is expected from airport management bodies when assessing costs and cost-efficiency, for instance by giving some concrete figures, and also bearing in mind quality characteristics.

4. Specific comments

4.1. The ESC thinks that in the directive the Commission has drafted the discrimination concept in terms that are too general. As regards calculation and risk, there is a difference for an airport management body between a user (air carrier) using an airport once a day or accounting for a significant share of traffic, such as 30, 40 or even 60 %. The ESC therefore feels that the usual trade and industry bulk discounts should be allowed where, for example, a better employment of production equipment results, provided such discounts are publicly known, cost-related and non-discriminatory.

4.2. For passengers (consumers) the possibility should also be considered of allowing lower charges for transit passengers and/or transit flights to hub airports. This would counteract discrimination against a whole series of passengers who are assigned to connecting flights because of their place of residence.

4.3. The ESC agrees with the Commission that adjustments to airport charges to reflect external costs involved in environmental protection and airport infrastructure management must not be allowed to generate additional revenue for airports.

4.4. Charges and costs within the Community can only be compared if the generally recognized principles of book-keeping, accounting and evaluation as well as environmental protection rules are harmonized. For instance, there are differences regarding the obligation to include leasing liabilities in the balance sheet. There are also differences in assessing the value of fixed and current assets. Whereas in Germany, for example, the basic obligation is to list the original value in the balance sheet, in Britain one has the choice of listing either the original value or the current market value.

Considerable differences also exist in the handling of pension funds and in the methods used for calculating employees' retirement pensions.

Comparison on this basis is extremely difficult.

4.5. To improve planning at airports, the ESC supports the Commission's call for Member States to see that users (air carriers) provide the information referred to in point 2.12. This is in the interests of improving planning security for airports.

However, in this particular case there are no possibilities of proportionate compensation by users for investment errors if the information provided by them is not taken into account.

4.6. The ESC welcomes the Commission's view that it should be permissible for airport charges to be staggered depending on the different noise levels of aircraft. This also applies to the possibility of increasing the level of take-off and landing charges at certain times of the day or night in order to reduce noise emissions. In line with the ESC Opinion on the Green Paper on future noise policy (), there must be an EU-wide framework directive on staggered charges, in order to avoid distortions of competition.

4.7. The ESC proposes that the Commission add the following extra wording to the end of the eighth recital (whereas):

'... and therefore requires appropriate incentives to force through efficiencies, while paying due regard to quality standards, and improve cost performances.`

4.8. The first sentence of Article 1 (Aim and scope) should be expanded to take account of the concepts of cost and quality effectiveness and should read:

'The aim of this Directive is to ensure compliance with the principles of non-discrimination, cost-relatedness, transparency and cost and quality-effectiveness as regards airport charges.`

4.9. The ESC feels that in Article 4 (Cost-relatedness) a new point 4 should be added, reading as follows:

'Due to the fact that airports are exposed to limited competition, Member States must set up criteria and parameters to measure performances of airports and develop appropriate incentives to optimise the cost and quality-effectiveness of airport infrastructure, facilities and services.`

4.10. Point 3 in Article 7 (Consultation) should be worded as follows:

'If no agreement results from the consultation process, the interested parties may call upon an independent arbitrator designated by the Member State.`

4.11. The Commission and the Member States must ensure that air carriers from non-EU countries can only call upon the application of this directive if the principle of mutual recognition is guaranteed in their country of origin.

4.12. The ESC considers the directive's implementation deadline of 1 January 2002 to be realistic.

4.13. The ESC calls upon the Commission to include it (i.e. the ESC) among the institutions mentioned in Article 10.

Brussels, 10 December 1997.

The President of the Economic and Social Committee

Tom JENKINS

() OJ C 301, 13.11.1995, p. 28.

() OJ C 206, 7.7.1997, p. 1.