EN Official Journal of the European Union C 230/17

Opinion of the European Economic and Social Committee on ‘Airport capacity in the EU’

(exploratory opinion requested by the European Commission)

(2015/C 230/03)

Rapporteur: Mr KRAWCZYK

On 4 September 2014, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on

Airport capacity in the EU (exploratory opinion).

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 11 November 2014.

At its 503rd plenary session, held on 10 and 11 December 2014 (meeting of 10 December), the European Economic and Social Committee adopted the following opinion by 117 votes in favour, with 1 abstention.

1. Conclusions and recommendations

1.1. To address capacity shortfall the EU’s existing airport assets need to be used more efficiently. More intermodality, better connectivity, more efficient use of secondary hubs and small airports, bigger aircraft and optimisation of processes could be appropriate solutions. So too would adoption of the Airport Package, and implementation of the Single European Sky (SES) and SESAR. Airport capacity must become a full-fledged pillar of the SES.

1.2. In the long-term, airport capacity will have to be built in the form of infrastructure such as terminals and runways. The main aim of airport expansion must be to improve connectivity on a sustainable economic basis. EU hubs must be provided with effective possibilities to meet growing demand, which includes the shortening of planning processes in order to be able to respond quickly to any demand that arises.

1.3. Airport expansions — where justified — should form part of a balanced approach. First, airports have a positive economic impact on the neighbourhood. It is clear to the EESC that this positive impact has to be safeguarded. Second, environmental issues have to be assessed in a transparent manner. Third, airport expansions have a public dimension. This requires a public dialogue whose interlocutors include, for example, air traffic control, airport authorities, airlines, regional parties, local residents, government, etc.

1.4. The EESC is convinced that it is critically important that Member States take immediate measures concerning land-use planning and management. Otherwise airport development will be hindered by many unforeseen and unnecessary obstacles and also, in some cases, existing airport capacity will be threatened.

1.5. Existing regional airports should only be developed where there is clear demand for more traffic. Member State governments should identify capacity challenges and define strategies to meet them. Except in the case of public obligations the EU should stop financing development of new regional green field capacity, without prejudice to the rules of Article 107 of the Treaty on the Functioning of the European Union.

1.6. The EESC considers the new EU guidelines on state aid to airports and airlines to be very valuable, because they provide legal certainty. The continued existence of non-sustainable regional airports will finally be verified based on common criteria.

1.7. If capacity crunch is to be addressed with confidence by airports, consistency and clarity of regulatory treatment is essential to providing the necessary incentives to ensure long-term investment in infrastructure.

1.8. Airport capacity also has a political dimension. The EESC strongly believes that the EU, together with Member States and stakeholders, including the social partners, has to make a general strategic decision on which airports will be important for the system and should be brought forward in the coming years. To maintain the competitiveness of EU aviation in globalised markets a European integrated aviation strategy, taking into account economic, environmental and social aspects as well as jobs creation, is urgently needed.

1.9. There needs to be an assessment of airport infrastructure projects co-financed in recent years by the EU. The EESC welcomes the European Court of Auditors’ commitment to carrying out this important work. The conclusions and recommendations of this work should be the subject of a public debate.

1.10. The EESC believes that the European Commission (EC) should simplify and streamline the structures that manage EU aviation and EU airports in particular. The Commission needs full and reliable data and information on EU airports’ operations. These data are currently not available. The EESC calls upon airport management and public authorities to provide them.

2. Introduction

2.1. Airports in the EU are valuable assets, yet several major airports will suffer from increasing congestion in the coming years while many others will remain underused. It could be argued that there is enough capacity across the EU, but the question is whether or not it is in the right place.

2.2. In recent years, public discussion on airport capacity has been conducted mainly in two contexts: the loss of central airport hub capacity to non-EU/non-European competitors such as Turkey and the Gulf countries; and the ‘Ryanair Syndrome’ of low-cost airlines rapidly boosting traffic at smaller regional airports but not being stable users in the long run. However, the problem runs much deeper than this.

2.3. In 2007 the EC published its Communication on ‘An action plan for airport capacity, efficiency and safety in Europe’ in which it identified a growing gap between capacity and demand at a number of EU hubs (1) and proposed several measures aimed at better use of existing capacity. In 2007 the European Parliament (EP) adopted an own-initiative report in response to the Commission’s Action Plan, in which it welcomed the EC’s Communication and addressed the importance of the airport capacity crunch.

2.4. In 2011, the EC published another Communication (2) on capacity as part of the so-called Better Airport Package, which identified capacity and quality as the key challenges for European airports.

2.5. Eurocontrol launched and re-launched its study ‘Challenges of Growth’ in 2004, 2008 and 2013, predicting a capacity crunch in the coming 20 years.

2.6. Such a level of activity proves the urgency of the capacity issue. Significant results have already been achieved by the aviation industry. Capacity and efficiency optimisation have taken place in all fields of action. Improvements include: — better and more intermodal connections to and from some airports; — reorganisation of internal processes across the whole aviation system, including consolidation processes; and — implementation of Airport Collaborative Decision Making (A-CDM) at an increasing number of airports.

2.6.1. Since 2004, the Single European Sky (SES) initiative has worked towards better use of the European airspace, mitigating the negative consequences of fragmentation of the European airspace. Airports involved in the SES also contribute to SES objectives within the Single European Sky Air Traffic Management Research (SESAR) programme. Without capacity on the ground, the success of SES is in jeopardy.

2.7. The Commission is currently working on detailed ideas for future airport strategy with stakeholders in the European Observatory on Airport Capacity. The mission of this Observatory is threefold: a. to assist the Commission in addressing the airport capacity and quality challenge; b. to promote sharing of experience and best practice within and outside Europe; and c. to establish a better view of the problem, its impact as well as possible solutions — including policy solutions.

The EESC welcomes the creation of the Observatory and encourages the further continuation of its already-demonstrated quality work.

3. Development of European airports over the last decade

3.1. There are more than 450 airports in Europe, and yet European airports are still facing an impending capacity crunch.

3.2. Airports Council International Europe (ACI) groups airports as follows:

ACI airport group Airport size (million passengers per annum) Number of European airports 1 > 25 14 2 10-25 23 3 5-10 34 4 < 5 390

A large share of traffic is handled by a relatively small number of airports. The explanation is found in the different airport models. Group 3 and 4 airports are rather small, providing point-to-point connections as well as feeding traffic into the bigger airports and guaranteeing public services. This means that many big airports are reliant on small airports.

A hub and spokes airport is ‘a single airport at which one or several airlines offer an integrated network of connecting services to a wide range of destinations at a high frequency’ (in: AEA, European Airports, Brussels, 1995).

3.2.1. In a point-to-point system, passengers travel directly from origin to destination without changing.

3.2.2. Both systems are complementary; they merely have different objectives: the hub and spokes system is aimed at achieving maximum connectivity, whereas the point-to-point system is meant to achieve the highest possible degree of mobility and flexibility.

3.3. The EU has financed an extraordinary number of airport-related infrastructure projects. The EESC feels that there is a lack of publicly available information about these investments and about their efficiency in providing additional connectivity and efficiency for the public.

3.4. The EESC considers the newly introduced EU guidelines (3) on state aid to airports and airlines to be very valuable, because they provide legal certainty. Furthermore, the guidelines differentiate between airports that are needed, for instance, for public services, and airports that are redundant, i.e. airports that are neither able to cover their operating costs nor needed to safeguard public services.

4. Future growth expectations

4.1. The aviation markets of the future will be the Asia-Pacific region, Latin America, Africa and the Middle East. The average annual growth of passenger flows in these regions will amount to between 6 % and 7 % until 2032. The average growth rate in Europe and North America will be around 3 %.

Furthermore, an immense amount of capacity is being built outside the EU. China has built nearly 80 airports. Turkey, Dubai and Singapore are currently building gigantic platforms that will be able to accommodate up to 160 million passengers — considerably more than the biggest airport in the world today, which is Atlanta at 96 million passengers.

4.2. Eurocontrol, in its latest Challenges of Growth report of 2013, has identified a capacity squeeze within the next 20 years. In the most likely scenario, 1,9 million flights will not be operated due to capacity constraints in 2035. This is equivalent to 12 % of demand. 20 airports in Europe will be highly congested for more than six hours a day, whereas presently this is true of only three.

4.2.1. The capacity growth that does take place will not be evenly distributed across European airports. The biggest growth will be in Eastern Europe, while intra-European traffic and the traffic share of North-Western Europe will decrease. The EESC notes this development and believes that airports in Europe must rise to these challenges.

5. Challenges of growth

5.1. The EESC believes that it is essential to enhance European competitiveness and appeal as a destination for investment in the aviation sector. Ground capacity is critically important here.

5.2. The EESC is convinced that implementing the SES is long overdue and needed to meet the capacity crunch challenge. Just minimising delays would have an immediate effect on the capacity of the system and the airports within it. The EESC agrees with ACI that ground capacity ought to be a full-fledged pillar of the SES and that objectives for ground capacity should be in line with those of the SES.

5.3. The Challenges of Growth study by Eurocontrol proposes six measures, which, in combination, could reduce the amount of unmet demand in 2035 by 42 %. This amounts to 8 00 000 additional flights, or 50 million passengers, which could then be operated. These solutions include: — bigger aeroplanes; — additional high-speed trains; — local alternative solutions: airlines should grow where capacity is available; — better use of smaller airports; — SESAR implementation; and — consolidation of flight plans.

5.3.1. The EESC understands that these measures are to be implemented to reduce unmet demand, but feels that they may not be sufficient to meet all future demand. Furthermore, not all of these measures are applicable to every airport in the EU.

5.4. The EESC also believes that the adoption of the Airport Package, as proposed by the EC, would also help to bring about better use of existing airport assets. The EESC calls for ambitious results from the ongoing work in Parliament and Council in line with what it had proposed in its Airport Package (4).

5.5. Ultimately, it would appear that the solution to the problem of insufficient airport capacity includes construction of new capacity alongside optimisation of existing capacity. This is difficult since many airports are no longer in a position to invest in further capacity. Eurocontrol, in the 2013 edition of its ‘Challenges of Growth’ report, states that ‘lack of revenue, difficulty in obtaining finance, and growing resistance to transport infrastructure projects’ have made some airports reconsider their expansion plans.

5.6. The EESC strongly recommends carrying out an assessment of the merit of EU investments in airport related infrastructure thus far. The EESC welcomes the EU Court of Auditors’ announcement that it is working on this issue, and recommends using a broad control sample.

6. Obstacles to the expansion of airport infrastructure

6.1. Airports face several challenges when they plan to enlarge their infrastructure. These challenges or obstacles can be grouped as follows: — financial and economic challenges; — regulatory requirements, including environmental factors; — public challenges, e.g. increasing resistance from the population; and — political considerations.

6.1.1. Airports tend to be very cautious about investing because of the recent economic crisis. On the one hand, revenues have tended to go down. On the other hand, airports face increasing security and safety costs (operating costs). Recent improved state aid decisions and the new state aid guidelines make it more challenging for smaller airports to remain viable. Securing financing for infrastructure projects has become a serious challenge for airports.

6.1.2. On a regulatory basis, airports have to fulfil a multitude of requirements. Administrative procedures are very complex, especially when it comes to security and environmental issues. The EESC by no means denies the importance of environmental requirements. Nevertheless, there has to be a balanced approach to these issues. The European Commission has already made good progress, for example with Regulation (EU) No 598/2014 on the establishment of rules and procedures with regard to the introduction of noise-related operating restrictions at Union airports, as part of a balanced approach. The European aviation sector is an industry sector well placed for ‘green growth’. The EESC warns the European Commission in particular against implementing non-integrated solutions to tackle environmental issues. The Committee highlights the need for integrated and global solutions. With this in mind, a useful first step could be for the European Commission to commission a large-scale project aimed at mapping out and documenting existing environmental restrictions impacting the capacity of European airports.

6.1.3. A rather new problem lies in growing public challenges in the form of increasing resistance from the population to infrastructure projects. Major EU hub airport extension projects have been put on hold, some of them for more than a decade — examples include a possible third Paris airport; additional runways at Frankfurt and Munich airports; and the UK/London discussion on how to best extend capacity in a multimodal metropolis environment.

6.1.4. Public resistance as a result of noise pollution, amongst other things, is growing. On the other hand, airports and airlines spend huge sums on noise mitigation measures. For example, Vienna airport has launched a noise protection scheme covering 12 000 households. The estimated total cost will amount to around EUR 51 million, of which EUR 37 million will come directly from Flughafen Wien AG. The budget of Liège airport and Charleroi airport for repurchase or noise insulation of 20 816 households is EUR 444 million. London Heathrow spent EUR 37 million on noise mitigation measures in the period 2007-11.

6.1.5. Member State governments should identify capacity challenges and define strategies to meet them. In this context, there is a clear need for strong leadership at European level to coordinate these national strategies on capacity and to provide financial guidance and support as appropriate. There should be very strict criteria for EU financing of green field airport assets. The EU should restrict financing of such projects to those that are financially viable or meet public obligation criteria.

6.1.6. The EESC would like to point out that the discussion on capacity also has a political dimension. The EESC strongly believes that the EU, together with the Member States and stakeholders including the social partners, has to make a general strategic decision on which airports will be important for the system and should be brought forward in the coming years. The balance of the EU’s priorities concerning the hub-system and the point-to-point-system should be assessed and reviewed if necessary. An integrated European policy is needed more than ever, taking into account the economic, environmental and social aspects as well as job creation.

6.1.7. In addition in the Commission, several DGs are working on related matters: MOVE, EMPL, COMP, JUST, etc. Their remit depends on the precise policy area, and there are many links to different areas such as international relations, state aid, SES and multimodality. This has not proven efficient while seeking to take an integrated, whole-value-chain approach to EU aviation, which is now imperative. It is urgent that the Commission’s aviation, and in particular its airport-related, activities be much better integrated.

6.2. Like any production process, the physical capacity of an airport is subject to constraints, i.e. factors reducing actual capacity. In the case of runway capacity they include: — operations (aircraft mix); — weather conditions; and — facilities.

6.2.1. In addition to this, all drivers of airport capacity are usually impacted by operating procedures and regulations, for instance special approach and departure procedures or airspace design requirements in response to noise considerations. Actual airport capacity is usually much lower than physical airport capacity. The ‘balanced approach’ of the International Civil Aviation Organization (ICAO) provides the most effective method to address noise at and around airports in an environmentally sensitive and economically responsible way.

6.2.2. The EC tends to take only runway capacity into account in its work on airport capacity. As shown above this approach is incomplete, and the EESC encourages the European Commission to take other decisive airport capacity drivers, such as airspace capacity at surrounding airports, into account in its work on airport capacity as well. The interaction between airports and airspace (or air navigation service providers) is critical in addressing the airport capacity crunch. However, the way this interaction is managed differs considerably across the European Union and even within some Member States.

6.2.3. It is critically important that Member States take measures concerning land-use planning and management. This is often in the hands of local or regional authorities who should appreciate the role of airports in national and European networks, especially in central hub areas where pressure for the usage of land for other purposes is great. The EU needs to agree on common principles in this regard and to provide a consistent legal and planning framework to optimise decisions on new capacity.

6.3. A consolidated common market in EU civil aviation needs to emerge. However, the EESC warns that hubs should not be favoured at the expense of regional airports. Both are complementary and should remain integral parts of what are referred to in TEN-T policy as the core and the comprehensive network. This sometimes results in congestion and growth going hand in hand.

6.4. The EESC encourages the Commission to look at the European airspace capacity issue both from the perspective of international competitiveness — which is, of course, key — and in terms of the smooth functioning of the EU’s internal market. Better and more rational use of regional capacity could help to alleviate pressure on busy hubs. The ongoing test of remote air traffic control towers (e.g. in Sweden) are in this context interesting as a tool to lower operating cost at such regional airports while maintaining the highest safety levels.

6.5. The Commission’s role is crucial. However, it has not been fully sketched out in detail: in order to do more than monitoring and chivvying all players to be more efficient, the Commission would first of all need full and reliable data and information on EU airports’ operations. These data are currently not available, and nor are there criteria for what an ‘efficient airport’ should be, or official figures on EU-level public funding for airports.

Brussels, 10 December 2014. The President of the European Economic and Social Committee Henri MALOSSE

(1) COM(2006) 819 final, p. 2.

(2) COM(2011) 823 final.

(3) OJ C 451, 16.12.2014, p. 123.

(4) OJ C 181, 21.6.2012, p. 173.