Own-initiative opinion of the Committee of the Regions on ‘Low-cost airlines and territorial development’
Date: 2004-06-17
Institutions: European Committee of the Regions
Subjects: State aid, air transport, airport, common transport policy, public investment, transport company

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Official Journal of the European Union

C 318/7

urges the Commission, in simplifying regional policy, to

56.
take account of the ‘user viewpoint’;

asks the European Commission to clarify what role the
57.
proposed political framework document will play in relation to
the programming phase at national/regional
level, and what
consequences the yearly drafting of national progress reports
will have; the CoR assumes that the constitutional situation of
the Member States will be taken into consideration and asks for
assurance that the preparation of these political
framework
documents will be based on an equal partnership in accordance
with the subsidiarity principle;

considers it sufficient for the European institutions to
58.
address priorities and results at most every two years. This

Brussels, 16 June 2004.

examination could take place at the Spring European Summit,
which is to focus on the Lisbon and Gothenburg Agenda. In
this way the implementation of the programmes at regional
level will not be delayed and their structure will not be
changed;

notes that the European Commission has not taken on
59.
board the CoR proposal to modify the n+2 rule with an n+3
rule as it would reduce the problems linked to the implementa-
tion of large-scale projects and calls on the Commission to
reconsider these proposals (of local and regional authorities)
and provide a full explanation should it decide to reject them.

The President

of the Committee of the Regions

Peter STRAUB

Own-initiative opinion of the Committee of the Regions on ‘Low-cost airlines and territorial
development’

(2004/C 318/02)

THE COMMITTEE OF THE REGIONS,

Having regard to the decision of its Bureau on 19 March 2004, and the fifth paragraph of Article 265 of
the Treaty establishing the European Community to draw up an opinion on the role played by low-cost
airlines in territorial development, and to instruct the Commission for Territorial Cohesion Policy to under-
take the preparatory work;

Having regard to the opinion (CdR 388/2002 fin) of 9 April 2003 on Territorial Cohesion (rapporteur: Mr
Ramón Luis Valcárcel Siso, President of the Autonomous Community of Murcia (ES/EPP));

Having regard to its opinion of 15 May 2002 on the Proposal for a Regulation of the European Parliament
and of the Council on the granting of Community financial assistance to improve the environmental
performance of the freight transport system (COM(2002) 54 final — 2002/0038 COD) (CdR 103/2002
fin) (1);

Having regard to its outlook opinion on The capacity of regional airports (CdR 393/2002) (2) adopted on 2
July 2003 (rapporteur: Mr Bob Verburg, Vice-Governor of the Province of Noord-Holland, NL, EPP);

Having regard to the Guidelines for the Application of Articles 92 and 93 of the EC Treaty and Article 61
of the EEA agreement to State aids in the aviation sector COM(1994) 350 final;

Having regard to the rulings of the Court of Justice C-159/91 and C-160/91 of 17 February 1993 on
‘Christian Poucet v Assurances Générales de France and Caisse Mutuelle Régionale du Languedoc-Rous-
sillon’ and C-82/01 of 24 October 2002 on ‘Aéroports de Paris v Commission of the European Commu-
nities’;

(1) OJ C 278 of 14.11.2002, p. 15.
(2) OJ C 256 of 24.10.2003, p. 47.

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Having regard to the draft opinion (CdR 63/2004 rev. 1) adopted on 5 May 2004 by the Commission for
Territorial Cohesion Policy (rapporteur: Mr Keymer, Leader of Tandridge District Council (UK/EPP));

Whereas:

1)

2)

3)

4)

5)

The exponential development of low-cost carriers in Europe has allowed for the development of a
network of services that provide point-to-point inter-regional air connections, as well as connections
from the regions to international hub airports.

The continued development of this network has a clear and undisputed regional dimension; it facili-
tates region-to-region connection; supports citizens' mobility, encourages economic development
and employment growth, promotes tourism, aids the regeneration of peripheral and less-developed
regions in particular and thereby has a positive impact on economic, social and territorial cohesion
in Europe.

The recent decision of the European Commission in the Ryanair/Charleroi (Belgium) case confirms
the support of the Commission for the further development of the low-cost airline sector; however
it has highlighted the uncertainty that exists with regard to the future development of inter-regional
air connections for the regions, their airports and the airlines providing low-cost services, as well for
the business community and the ordinary citizen.

The soundness of investments made by the regions in their airport infrastructure and by the airlines
in low-cost air services has been called into question by the Commission's application of European
competition and State aid rules.

This situation substantially weakens the opportunity for public authorities to target public-sector
investment in airport infrastructure and air services where that is consistent with the need to
improve economic, social and territorial cohesion across the European Union.

adopted the following opinion at its 55th Plenary Session on 16 and 17 June 2004 (meeting of 17 June).

Views of the Committee of the Regions

Introduction

enlargement of the Union and that air services operating from
regional airports, including those provided by low-cost carriers,
enable a region to have faster and easier access to the major
centres in the EU and the rest of the world;

T h e Commi tte e of t h e R e g i ons

1.
stresses that the preparation of a communication from
the European Commission on regional airports and the
preparation of revised guidelines on the role of State aid in
support of
regional airports and air
services, presents
the opportunity to provide the clarity
required to ensure that the positive role played by low-cost
services in encouraging regional development is realised;

the development of

welcomes the opportunity to take a position in advance
the

2.
of
Committee's views can inform the Commission's documents;

the Commission's work so that

the preparation of

6.
stresses that regional airports are another element of a
region's access infrastructure, which also includes roads, rail,
etc. and just as public sector investment in these access modes
is supported, so too should public sector investment in regional
airport
the
Committee further welcomes European Commission acceptance
for public-sector investment to support the start-up of regional
air services operating from them, including those provided by
low-cost carriers;

facilitated and encouraged;

infrastructure be

stresses to the European Commission that the key issues

7.
to be taken into account are:

3.
confirms that the Committee's outlook opinion on the
Capacity of regional airports (CdR 393/2002), adopted on 2
July 2003, represents a fundamental background for these
views;

— the importance of identifying regional airports and regional
air services as an essential tool to help regional and local
authorities promote delivery of
territorial cohesion and
development;

4.
reiterates its view that regional airports must be consid-
ered as an asset, one that is particularly important for the
development of regional and local economies;

5.
draws to the attention of the Commission that the social
and economic importance of air transport will grow with the

— the contribution that the development of regional airports
and regional air services make to wider employment crea-
tion, regeneration, social inclusion and regional and local
economic development programmes;

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— the significant role that low cost air services can play in
supporting the sustainable economic development of small
and medium sized regional airports;

— the need for the Commission to provide clear guidelines
that can be used in considering the future use of public-
sector funds to support the development of the network of
regional air services.

international hub airports. The development of the network of
inter-regional air services can therefore help relieve pressure on
international hub and national airports. Congestion at such
hubs can further be relieved by the development of a number
of regional airports to serve as gateway airports, based on their
location, capacity, facilities and current operations. The provi-
sion of low-cost inter-regional air services has a significant role
to play as part of the development of this broader network of
regional air services.

Recommendations of the Committee of the Regions

T e r r i tor i a l c oh e si on a nd de v e l op me nt

interchange. This will,

Transport is a key factor in the economic and social inte-
1.
gration of Europe. With the enlargement of
the European
Union there will be greater mobility of labour, resulting in
greater social
in turn, heighten the
importance of the network of regional air services, including
those provided by low-cost carriers, providing connections
between regions. The importance of air travel for the develop-
ment of the social fabric of the EU will increase. The existence
of regional airports and inter-regional air services is therefore
intrinsically linked to the economic and social development of
the regions.

2.
Regional airports enable faster and easier access to a
region. Air services operating from regional airports provide
point-to-point connections between regions, as well as links
from the region to international hub airports. Such services
enable citizens in island communities, regions in Central and
Eastern Europe and countries on the periphery of the EU to
participate more fully in Europe, thus promoting social inclu-
sion.

the network of

Further development of

3.
regional air
services would enable a citizen to make a return trip from any
region in the EU to the major economic, political and research
centres within the Member State and the European Union in
one day's travelling time.

7.
In providing a planning framework within which the
development of regional airports and inter-regional air services
can take place, public-sector authorities must seek an appro-
priate balance between inter-regional and region-to-hub air
services. This balance will in part be a function of the economic
and social objectives of individual regions.

The formulation of EU-wide air travel agreements (such
8.
as Open Skies) should not be at
the expense of regional
airports. Any such agreements or policies must take the wider
regional territorial considerations into account and be counter-
balanced to ensure that regional competitiveness is maintained.

Conc lu si on

9.
Regional airports are critical access points to the regions.
Air services operating from regional airports, including those
provided by low-cost carriers, have the potential to play a key
role in contributing to territorial cohesion. In order to realise
this potential there is a need to provide a greater degree of
certainty within which investment by the public and private
sectors can take place. This is particularly the case with regard
to investment in airport infrastructure, investment that is made
for the longer term. The Commission should give greater
prominence to the significant role of regional airports and
regional air services as part of the multi-modal approach to the
development of the Trans-European Transport Networks.
In
particular, the Commission should give consideration to the
potential
inter-regional air
services to complement the development of high-speed rail
networks.

in point-to-point

for investment

4.
The development of regional airports and air services,
including those provided by low-cost carriers, must take place
as part of the development of an inter-modal transport system
serving the economic, environmental and social objectives of
the Commission's regional framework for territorial cohesion.

5.
The development of regional airports and regional air
services must be planned in accordance with the principles of
sustainable development, where development meets the needs
of
future
generations to meet their own needs.

the present without compromising the ability of

Regional airports have surplus capacity in terminal space
6.
and runway slots that can be utilised to provide point-to-point
inter-regional air services that are in addition to, and comple-
ment, feeder air services operating from the regional airport to

E c ono mi c c o mp e t i ti v e ne ss

The availability of regional air services, and in particular
10.
low-cost air services, operating from regional airports improves
access to the global economy. This, coupled with the lower
labour costs and facilities costs associated with the more
remote regions, can encourage the business community to
locate new economic investment within the region. Existing
businesses in the region could develop their market share by
being able to reach other parts of the Member State, the EU
and the rest of the world.

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The overall economic impact

11.
that can be realised
through the development of regional air services operating out
of regional airports should be considered under the following
four headings:

Stat e a i d

— Direct Impact: employment and income that is wholly or

largely related to the operation of the airport;

— Indirect Impact: employment and income generated in the
economy of the study area in the chain of suppliers of
goods and services;

— Induced Impact: employment and income generated in the
economy of the region by the spending of the incomes of
those direct and indirect employees;

— Catalytic Impact: employers and income generated in the
regional economy by the wider role of
in
improving the productivity of business and in attracting
and
economic
inbound tourism.

inward investment

the airport

activities,

such as

The improved access to European and international
12.
markets that a regional airport is capable of providing can
assist in the retention of a skilled labour force within a region.
The development of low cost inter-regional air services when
based at a regional airport can provide additional employment
and training opportunities locally and within the region as a
whole. In particular, the basing of engineering and support
services at a regional airport will
increase the requirement
within the region for well-trained engineers and technicians
capable of supporting the aviation industry. The resulting
in employment opportunities within the region
increase
reduces the need for welfare support whilst at the same time
increasing wealth creation. In addition,
low-cost airlines can
help to diversify, de-seasonalise and boost tourism products,
which in turn will improve the quality of these products and
therefore the attractiveness of a region for tourists.

Conclu si on

The development of

low-cost air services providing
13.
point-to-point inter-regional air services from regional airports
can act as an effective catalyst for regional economic develop-
ment in accordance with the economic and social objectives of
the Commission's regional framework for territorial cohesion.
The development of the network of low-cost point-to-point
inter-regional air services operating from regional airports can
be a major factor in raising the economic competitiveness of
the regions, and therefore the EU.

in new infrastructure.

14.
The smaller regional airports are likely to require funds
from the public sector in order to cover operating costs and
investment
In return they offer the
to act as the base for regional air services that
potential
improve overall
levels of accessibility to the more remote
regions that in turn gives rise to significant economic and
social benefits within the region they serve.

15.
There is a need to give greater weight to the public
service function of low-cost point-to-point inter-regional air
services operating from such airports that provide a link for
the region with the rest of the EU and the world.

Public-sector

16.
investment should be applied using a
targeted approach to provide infrastructure and services that
afford citizens the opportunity to fulfil their capabilities by
improving the economic competitiveness of the regions.

17.
The use of public-sector investment to secure a more
balanced spread of economic activity across the EU is consis-
tent with the Commission's regional policy objectives of
achieving a more sustainable pattern of development by redu-
cing the pressures of over-concentration, congestion and bottle-
necks within the transport system.

Any consideration of the role for public-sector invest-
18.
ment must be sufficiently flexible to reflect the diverse degree
of development within individual regions across the EU, and
the specific economic and spatial priorities for an individual
region as identified by the relevant regional and local authori-
ties.

Conc lu si on

19.
There is a need to recognise that it is in the public
interest to maintain and develop the network of regional air
including those provided by low-cost carriers, oper-
services,
ating from regional airports. Carefully targeted public-sector
investment can provide modest pump-priming investment that
can lead to substantial benefits to the local and regional
economy. The removal of public-sector investment in these
circumstances can result in the loss of opportunities for low-
cost inter-regional air services to act as a catalyst for delivering
territorial cohesion and improved economic competitiveness.
The framework for the use of public-sector investment must
the wider
therefore be capable of
employment creation, regeneration, social
inclusion, environ-
mental
economic development
programmes within a region.

taking due account of

and regional

and local

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R e q u i r e me nts of g u i de l i ne s o n Sta t e a i d

20.
The guidelines should provide sufficient clarity on how
the Commission will interpret European competition and State
aid rules in order to provide regional and local authorities with
the necessary guidance to positively use public-sector invest-
ment to support the realisation of the potential for regional
airports and low-cost air services to contribute to delivery of
the Commission's regional policy objectives.

21.
The guidelines must be developed by the Commission in
full consultation with representatives of regional and local
authorities.

The guidelines must acknowledge and respect the prin-
22.
ciple of regional diversity. They must reflect the diverse degree
of development of the different regions across the European
Union. They must take account of the existence of natural
handicaps in the region in question, as well as the degree of
development of other means of transport in the region and the
peripheral and dependent nature of major airports. They
should allow regional and local authorities to identify certain
airport
infrastructure and regional air services as being of
regional significance, where these are consistent with the
specific economic and spatial priorities identified by the autho-
rities concerned.

The guidelines

should not contain strict or

23.
rigidly
applied thresholds, instead allowing regional and local authori-
ties to consider the merits of public-sector investment on a
case-by-case basis.

24.
They should clearly state that public-sector investment is
permitted to support the provision of regional air services,

Brussels, 17 June 2004.

conditional only on open access to the investment by all
carriers and allocated by prior stated criteria. These criteria
should include the particular benefit to regional economies
low-cost inter-regional air
arising from the development of
services acting as a catalyst for investment in the regions.

They should allow public-sector investment to make a
25.
substantial contribution towards the start-up costs,
including
regionally targeted marketing campaigns funded through local
tax revenues, associated with the establishment of
such
services.

26.
The guidelines should allow consideration of public-
sector investment in the development or provision of additional
airport
to
support the development of new regional air services.

infrastructure where that

is necessary in order

The guidelines should not be limited in their application
27.
to pure principles of the market economy but should take into
account the wider social, environmental and territorial develop-
ment aspects arising from the development of new regional air
services, including those provided by low-cost carriers.

28.
The guidelines must promote the development of
regional airports and inter-regional air services as part of the
broader Trans-European Transport Networks.

The guidelines must have embedded within them the
29.
requirement for investment to be planned in accordance with
the principles of sustainable development, where development
meets the needs of the present without compromising the
ability of future generations to meet their own needs.

The President

of the Committee of the Regions

Peter STRAUB