Commission staff working document - Accompanying document to the Proposal for a Directive of the European Parliament and the Council on aviation security charges - Impact assessment {COM(2009)217 final} {SEC(2009)616}
Date: 2009-05-11
Institutions: European Commission
Subjects: European Aviation Safety Agency, air transport, airline, carriage of passengers, freight rate, provision of services, transport safety

EN 

EN 

   EN 

 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 11.05.2009 
SEC(2009)615 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 

Proposal for a Directive of the European Parliament and the Council on aviation 
security charges 

IMPACT ASSESSMENT  

{COM(2009)217 final} 
{SEC(2009)616} 

EN 

   EN 

 
 
 
 
 
 
COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 

Proposal for a Directive of the European Parliament and the Council on aviation 
security charges 

IMPACT ASSESSMENT  

{COM(2009)217 final} 
{SEC(2009)616} 

Lead DG: TREN 

Other involved services:  

Agenda planning or WP reference: 2009/TREN/020 

Executive summary 

The terrorist attacks of 11 September 2001 in the United States had a profound impact on the 
global  aviation  sector  as  well  as  on  the  European  aviation  sector.  Strong  measures  were 
essential  to  address  the  threats  posed  by  international  terrorism  and  to  restore  public 
confidence in the aviation sector. 

Consequently, the cost of aviation security has increased over the last years. A study for the 
Commission  estimated  that  in  2002  more  than  90%  of  these  costs  are  recovered  through 
security charges (or taxes) levied on air passengers, airlines and cargo shippers. In 2007 these 
security  charges  yielded  estimated  revenue  of  €1.6  billion  in  the  EU,  which  constitute 
approximately 1 percent of the average air fare. 

Problem 

The rise in aviation security costs has drawn the industry's attention to such costs. Each airline 
therefore  tries  to  minimise  its  security  costs  by  attempting  to  influence  the  structure  for 
security charges. Usually the largest airline at the airport has a considerably stronger position 
compared to the other airlines and may use this to ensure that the level of security charges are 
lower  for  markets  where  the  airline  has  a  proportionally  larger  share  of  the  traffic  than  the 
other airlines. In addition, focus is also increasing  on  security  charges because other airport 
fees are regulated by the recently adopted Directive on airport charges. However, this report 
has not managed to establish that these risks are translated into differentiated security charges 
in all Member States. 

EU action justified 

Current structures that differentiate security charges mainly benefit the main national airlines 
when operating from airports in the same Member State. Airlines from other Member States 
benefit less from the differentiated security charges. 

EN 

2 

   EN 

 
 
 
 
Objectives 

As  aviation  security  is  a  core  state  responsibility,  security  charges  shall  therefore  not  be 
subject  to  commercial  decisions  between  an  airport  and  an  airline.  The  main  objective  is, 
firstly,  to  ensure  that  security  charges  do  not  unduly  differentiate  between  airlines,  air 
passengers or cargo shippers in the EU. Secondly, security charges shall not generate profit or 
be  used  to  cross-subsidise  between  airlines.  Revenues  from  security  charges  shall  therefore 
only be used to cover the costs to which the security services give rise. 

Options 

This  impact  assessment  evaluates  four  different  options  that  are  based  on  existing 
international  principles  on  security  charges  or  responses  received  during  the  consultations 
process from March to September 2008. 

Option  1  examines  the  consequences  of  no  EU  action.  If  no  EU  action  is  taken,  security 
charges  are  more  likely  to  discriminate  among  airlines  and  passengers.  In  particular,  as  the 
Directive on airport charges prohibits other charges to discriminate.  

Option 2 examines whether self-regulation by the industry can ensure consumers' interest and 
promote  more  efficient  aviation  security  services.  Such  self-regulation  could  be  based  on 
certain international principles that already are endorsed by ICAO. These principles are: non-
discrimination, consultation with the airlines, transparency of security cost and revenues from 
security charges shall only be used to cover security costs. The objective of consultation is to 
allow  for  the  airlines  to  have  the  possibility  to  make  suggestions  on  how  to  increase  the 
effectiveness and efficiency of security services. Consequently, this option will encourage a 
dialogue between airlines and airports to look for more efficient ways to comply with security 
requirements.  However,  these  principles  were  published  already  in  1981  and  are  still  not 
respected.  Self-regulation  by  the  industry  is  therefore  not  likely  to  effectively  address  the 
problems identified. The effects of option 2 are the same as if the Commission were to issue 
non-binding  recommendations  on  how 
identified  risks  because  such 
recommendations would be the same as the already existing ICAO-principles. 

to  solve 

the 

Option 3 is similar to the second option, but makes the principles legally binding through an 
EU Directive. In addition, the third option allows for airlines to appeal decisions by airports if 
the  security  charges  are  discriminatory  or  cover  other  costs  than  security  costs.  This  will 
increase  the  effectiveness  of  the  transparency  obligation  and  is  estimated  to  reduce  overall 
costs for aviation security by 10 percent. This option is also supported by other Commission 
policies and in line with Member States policies. 

Option 4 suggests that Member States should fully finance airport security. This will remove 
any  security  charges  and  their  discriminatory  aspects.  This  is  the  preferred  option  by  all 
industry  representatives  and  it  also  most  effectively  removes  any  discriminatory  aspects  of 
security charges. However, this option discourages a more efficient aviation security services 
because there are no incentives for the security providers to control the costs. In addition, it is 
unlikely to be accepted by the Council as it is vehemently opposed by Member States. 

This  impact  assessment  concludes  that  consumers'  interest  and  more  efficient  provision  of 
airport  security  services  are  best  addressed  by  option  3.  The  administrative  burden  for 

EN 

3 

   EN 

Member  States  and  the  increased  cost  of  business  of  option  3  are  negligible  as  that  option 
builds upon already existing structures established by the Directive on airport charges1. 

Monitoring and evaluation 

The Commission will continuously monitor the developments in the aviation security sector 
and  especially  evaluate  on  a  regular  basis  the  number  of  airports  publishing  their  security 
charges. 

SECTION 1: PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1.1 

Organisation and timing 

This  impact  assessment  has  been  prepared  by  DG  Energy  and  Transport  (TREN)  with  the 
contribution of an Inter-services Steering Group in which the following Directorates General 
participated:  DG  JRC,  DG  ECFIN,  DG  ENTR  and  DG  COMP.  The  Steering  Group  met  2 
times. 

Work  on  this  impact  assessment  started  in  2008.  This  proposal  is  part  of  the  Commission's 
2009 work programme and has the agenda planning number 2009/TREN/020. 

1.2 

Consultation and expertise 

1.2.1  Consultation with Member States and stakeholders 

On  17  March  2008  DG  TREN  submitted  a  questionnaire  to  Member  States  asking  for 
information on existing national legislation and the most recent estimates of national security 
costs.  DG  TREN  wished  to  have  their  comments  before  15  April  2008.  On  2  April  2008  a 
similar  questionnaire  was  sent  to  organisations  representing  industry  and  consumers.  The 
recommended  deadline  for  stakeholders  to  submit  their  comments  was  30  April  2008.  This 
questionnaire  asked  for  estimates  of  security  costs,  the  impact  of  security  measures  on  the 
industry  and  whether  existing  national  legislation  allowed  the  industry  to  recover  security 
costs.  The  consulted  parties  were  asked  to  reply  before  the  end  of  May.  Consequently,  the 
Commission's minimum standards for consultation have been met. 

5  Member  States  replied  that  existing  airport  charges  consultations  provide  airlines  with 
sufficient  information  on  security  costs  as  well.  Similarly  for  cost-relatedness  of  security 
charges, 11 Member States replied that the same consultations ensure that security charges are 
used  to  exclusively  to  meet  security  costs.  However,  these  consultations  do  not  require  the 
approval of the operators to modify security charges and do therefore not ensure transparency 
and  cost-relatedness.  Actually,  only  the  Netherlands  have  specific  legislation  in  force 
requiring  security  charges  to  be  both  transparent  and  cost-related.  The  Italian  legislation, 
which is the other national legislation  targeting security charges, only ensures transparency. 
The replies also confirmed that aviation security is mainly financed through security charges 
on  airlines,  air  passengers  and  cargo  shippers.  This  is  usually  referred  to  the  "user-pays" 
principle.  11  Member  States  rely  almost  entirely  on  such  charges.  6  Member  States 
sometimes make significant contributions to the security costs. 4 Member States did not reply 

1 

Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on  airport  charges 
COM(2006)820 final of 24.1.2007 

EN 

4 

   EN 

                                                 
or  did  not  reply  in  sufficient  detail  for  the  Commission  to  draw  any  conclusions  on  their 
replies. 

Organisations representing airlines, airports and consumers were asked to provide information 
on  the  cost  and  impact  of  aviation  security.  9  organisations,  mainly  airport  and  airline 
organisations, replied and they all argued that States should cover for security costs because 
the  threats  are  targeted  against  States  and  not  against  the  industry.  Unfortunately,  only  one 
consumer organisation replied to the questionnaire. Several replies argued that aviation is at a 
disadvantage  in  comparison  with  financing  security  in  other  transport  modes  and  that  this 
negatively  impacts  the  competitiveness  of  the  European  aviation  sector.  All  stakeholder 
replies  endorsed  increased  cooperation  within  the  International  Civil  Aviation  Organization 
(ICAO) as the best solution to harmonise international aviation security measures and address 
differences in the level of state-funding between the EU and its main trade partners. 

In  addition  to  the  questionnaire,  a  consultation  meeting  was  also  held  on  17  July  2008  to 
which Member States, some members of the transport committee of the European Parliament 
and  the  following  organisations  were  invited:  PostEurop,  European  Regions  Airline 
Association  (ERA),  International  Air  Transport  Association  (IATA),  International  Airline 
Association  (IACA),  European  Transport  Workers'  Federation  (ETF),  Freight  Forward 
International  (FFI),  European  Travel  Retail  Council  (ETRC),  European  Shippers  Council 
(ESC),  European  Cockpit  Association  (ECA),  European  Aviation  Safety  Organisation 
(EASA), European Consumer Centre Network (ECC-Net), Bureau Européen des Unions des 
Consommateurs (BEUC), Forum of European Regional Airports (FARE), European Business 
Aviation  Association  (EBAA),  Airports  Council  International  (ACI),  European  Low  Fares 
Association  (ELFAA),  Association  of  European  Airlines  (AEA),  European  Express 
Association (EEA), EUROCONTROL, and European Association for Forwarding, Transport, 
Logistic and Customs Services (CLECAT).  

In  advance  of  the  consultation  meeting,  DG  TREN  submitted  a  paper  to  the  invited 
organisations which outlined four different options to address the issue of financing aviation 
security:  transparency  of  security  costs,  Commission  approval  of  more  stringent  measures, 
mandatory  "one-stop"  security  and  regulatory  convergence  through  increased  international 
cooperation.  The  organisations  were  also  invited  to  comment  on  the  consultation  paper  and 
the  discussions  in  the  consultation  meeting  in  writing  before  1  September  2008.  Late 
submitted comments have also been examined. Annex II gives an extensive overview of the 
replies submitted by the stakeholders. 

In the consultation meeting, all industry organisations emphasised that aviation security is a 
state responsibility and the costs should therefore be borne by the states. IATA compared with 
the situation in the US where the government covers a substantial share of the total security 
costs.  ELFAA  made  a  comparison  between  the  railway  sector  and  short-haul  flights. 
Differences  in  security  financing  between  the  different  modes  of  transport  may  also  cause 
distortions of competition. AEA stressed  that different  levels  of security control at different 
airports strongly affect competition between airlines. 

Members of the European Parliament were also invited to the meeting on 17 July 2008. One 
Member of the European Parliament argued that increased transparency of security measures 
and  charges  are  the  most  important  elements.  This  will  also  allow  for  a  clearer  distinction 
between  measures  that  are  imposed  through  the  security  regulation  and  more  stringent 
measures  imposed  by  Member  States.  The  same  Member  of  the  European  Parliament  also 
emphasised  that  the  views  of  the  citizens  and  the  passengers  are  essential  and  therefore 

EN 

5 

   EN 

regretted that the invited representatives from consumer organisations did have the possibility 
not attend this hearing. 

No Member State has supported an obligation on them to cover security costs. One Member 
State  representative  stated  that  security  costs  should  be  seen  as  a  cost  of  business  for  the 
aviation sector and therefore paid by the industry. Other industries have to cover similar costs, 
such  as  improved  safety  of  cars  in  the  road  sector.  Another  Member  State  representative 
believed  that  financing  security  is  a  national  matter  that  should  be  decided  by  the  national 
parliament.  Several  Member  States  were  cautiously  in  favour  of  more  transparency  coupled 
with  a  prohibition  of  profit-making.  It  was  also  preferred  that  the  Commission  should  issue 
guidelines rather than a binding Directive. 

1.2.2 

Expertise 

No external expertise was used for this impact assessment. However, DG JRC estimated the 
impact of some of the measures. The note of DG JRC is attached in Annex XII. This impact 
assessment used statistics that are publicly available, mainly from Eurostat, and also relied on 
statistics  provided  by  stakeholders  and  Member  States  in  their  replies  to  the  questionnaire. 
Some  Member  States  made  it  clear  that  this  information  is  sensitive  and  asked  the 
Commission to handle it accordingly.  

The preparation of this proposal has been preceded by a report from the Commission to the 
Council  and  the  European  Parliament  on  Financing  Aviation  Security  COM(2009)30  of 
2.2.2009.  The  report  analysed  four  issues:  whether  security  charges  are  exclusively  used  to 
meet security costs, the transparency of security charges, the impact of aviation security and 
its financing on competition between airports and between airlines, and consumer protection 
as regards the distribution of the costs of security measures between taxpayers and users. The 
main conclusion of the report is that transparency is necessary to ensure that security charges 
do not impact the internal aviation market. 

1.2.3  Opinion of the Impact Assessment Board 

This report was discussed with the Impact Assessment Board on 14 January 2009. The Impact 
Assessment Board published its opinions on 20 January 2009 and on 24 February 2009. 

The opinions of the Board listed the following recommendations for improvements: 

–  To establish more precisely and substantiate the distortions of competition and strengthen 
the case for EU action. Better demonstrate the benefits and disadvantages of the preferred 
option. 

–  Develop the content of the options and expand the available range of alternatives. 

Following these recommendations, the impact assessment has been revised along these lines. 

–  The  economic  reasoning  has  been  reinforced  across  the  report.  Complaints  on 
discriminatory  or  excessive  security  have  been  assessed.  The  case  for  EU  action  with 
regard to "one-stop" security could not be substantiated due to unavailability of necessary 
data.  The  report  does  therefore  not  anymore  suggest  any  EU  action  with  regard  to  "one-
stop" security. 

EN 

6 

   EN 

–  The  options  are  described  in  more  detail  and  explicitly  mention,  where  appropriate,  the 
preferred legal instrument. The option on mandatory transparency without the possibility to 
appeal security charges has been replaced by an option on increased transparency through 
self-regulation  by  the  industry.  This  new  option  also  covers  the  case  if  the  Commission 
were to issue non-binding guidelines to address to problems identified. 

SECTION 2: PROBLEM DEFINITION 

2.1 

What is the issue or problem that may require action? 

2.1.1  Discriminatory and excessive security charges 

Background 

Following  the  implementation  of  new  European  rules  in  2002,2  the  overall  cost  of  aviation 
security increased. Significant new investments were necessary, such as the refurbishment of 
some airport terminals and the acquisition of additional screening equipment and recruitment 
of  additional  staff  to  comply  with  the  increased  requirements  on  security  controls  of 
passengers and cargo. 

The three main cost components of aviation security are: airport security costs, airline costs 
and costs for Member States. The main cost concerns the security controls of passengers and 
cargo  at  airports.  This  usually  has  two  main  cost  elements:  staff  costs  and  costs  for 
infrastructure  and  equipment.  The  national  authorities  are  responsible  for  the  provision  of 
these  services  as  they  are  a  core  state  responsibility.  The  security  services  are  usually 
provided  by  the  national  authorities  themselves  or  delegated  to  the  airport  or  to  a  private 
contractor. 

The  Commission  published  a  report  on  financing  of  transport  security  in  2006.3  To  prepare 
for  this  report,  external  consultants  analysed  the  actual  situation  and  published  their 
conclusions in 2004 on the Commission website.4 The conclusions of the study describing the 
actual situation in 2002 can be summarised as follows: 

–  The  security  costs  for  airports  and  States  in  2002  for  the  then  15  Member  States  and 
Norway, Iceland and Switzerland were estimated at €2 billion. Including  the costs to the air 
carriers to comply with new European rules, total security costs were estimated to €2.6 to 
€3.5 billion, which at that tim e corresponded to between 1 and 2 percent of an average air 
fare. 

–  These costs to Member States and industry are mainly recovered charges and taxes levied 
on the users of the European air transport system. This is usually referred to as the "user-
pays"  principle.  Airlines,  air  passengers  and  cargo  shippers  cover  more  than  90%  of  the 
aviation  security  costs.  Member  States  only  cover  6-7%  of  the  costs  through  the  general 
budget. 

2 

3 
4 

Regulation (EC) No 2320/2002 of the European Parliament and of the Council of 16 December 2002 
establishing common rules in the field of civil aviation security (OJ L 355, 30.12.2002) 
COM(2006) 431 final of 1.8.2006. 
http://ec.europa.eu/transport/air_portal/security/studies/index_en.htm 

EN 

7 

   EN 

                                                 
Since 2002 the overall cost for aviation security has decreased as the need for investments has 
reduced. AEA estimated that the average cost for security per passenger was €2.60 in 2007. 
This gives a total cost of aviation security in 2007 of approximately €1.6 billion for the 27 EU 
Member States.5 

The industry also pointed out during the consultation that the main trading partners of the EU 
cover  significant  parts  of  the  overall  security  costs.  In  the  USA,  for  example,  estimates  for 
2006  suggest  that  56%  of  the  overall  expenditure  (US$5  billion)  has  been  funded  through 
appropriations  whereas  38%  has  been  funded  through  user  fees  paid  by  travellers.  The 
situation in Japan is similar to the situation in the US. 

Discriminatory security charges 

Air passengers are subject to the same security control and the level of aviation security does 
normally not alter with the destination for intra-EU travel. Consequently, the cost of security 
control  is  usually  the  same  for  a  passenger  travelling  to  a  domestic  destination  as  for  other 
destinations within the EU. 

The  increased  cost  of  security  has  given  the  airlines  stronger  incentives  to  minimise  these 
costs.  An  airline  may  therefore  use  its  bargaining  power,  where  possible,  over  an  airport  to 
modify the structure of security charges. This is most commonly accomplish by setting lower 
level  security  charges  for  the  traffic  segments  where  the  largest  airline  has  a  proportionally 
higher share of the traffic than other airlines operating from the same airport. Lower charges 
for  one  segment  mean  that  other  segments  have  to  compensate  this  through  higher  charges. 
The  consequence  of  this  is  that  some  segments  subsidise  other  segments  through  a  charges 
structure that discriminate between categories. 

The national airline usually has the strongest position at an airport. Sometimes this position is 
sufficiently strong to ensure that the airline benefit from the charges structure, usually through 
lower  charges  for  domestic  destinations.  The  national  airline  has  almost  always  a  higher 
proportion of the domestic traffic. 

Table 1. Security charge per passenger for intra-EU and domestic travel 

Intra-EU 

Domestic 

Romania 
airport 

– 

Bucharest 

€7.50 

Spain – all airports 

Cyprus 

Lithuania – Vilnius 

€1.39 

€0.39 

8 

LTL 
of 
per 
Maximum  Take-Off  Weight 
of the aircraft. 

tonne 

€3.81 

€1.18 

0 

4 

LTL 
of 
per 
Maximum  Take-Off  Weight 
of the aircraft. 

tonne 

Source: IATA 

5 

According  to  Eurostat,  631.572.637  passengers  were  departing  from  an  EU  airport  in  2007.  Security 
taxes/fees/charges only are levied on departing passengers.  

EN 

8 

   EN 

 
 
                                                 
For example, table 1  presents a  non-exhaustive overview of airports where security charges 
differentiate between passengers departing to domestic and other destinations within the EU. 
Such  structures  are  discriminatory  unless  it  can  be  shown  that  they  are  based  on  actual 
differences  in  the  cost  of  security  control  between  domestic  and  other  intra-EU  destination. 
However, passengers travelling to domestic or other EU destinations are normally subject to 
the same security control under circumstances. It is therefore not possible to argue that these 
different  passenger  categories  generate  different  costs  and  that  the  level  of  the  charge 
therefore should differentiated. 

The situation described above mainly refers to the situation at large airports which one airline 
uses  as  a hub airport. The  picture  is  somewhat different for smaller and regional airports to 
which  mostly  low-cost  airlines  operate.  At  those  airports,  airport  and  security  charges  are 
increasingly set in long-term individual contracts with each airline. These charges are usually 
fixed  even  if  the  level  of  security  cost  varies  over  the  duration  of  the  contract.  Airlines 
operating from the same airport will therefore face different security costs depending on their 
bargaining power and when the contracts were finalised. 

In  conclusion,  the  objective  of  security  charges  is  to  recover  the  cost  of  protecting  citizens 
from  terrorist  attacks  and  these  charges  shall  therefore  not  discriminate  between  air 
passengers,  airlines  or  cargo  shippers.  However,  airlines  use  their  bargaining  powers  to 
minimise  their  security  costs  which  risks  resulting  in  discriminatory  security  charges.  In 
addition, discriminatory security charges may impact competition between airlines operating 
from the same airport. The airlines that are discriminated against are disadvantaged over the 
competitor airlines with lower security costs per passenger. The same market 

Excessive security charges 

Aviation  security  is  a  core  State  responsibility  and  not  a  commercial  activity  that  shall 
generate profit. Revenues from security charges shall therefore only be used to meet security 
costs. For the purposes of this impact assessment, security charges that recover more than the 
security costs are considered as excessive. 

As  table  1  above  shows,  some  airports  differentiate  security  charges  between  categories  of 
passengers.  Cross-subsidisation  of  revenues  between  these  categories  is  often  necessary  to 
attain for this differentiation. In a situation where there few or no contributions from the State, 
a  cross-subsidisation  means  that  one  passenger  category  has  to  be  overcharged  to  cover  for 
the  losses  generated  by  other  categories.  Discriminatory  charges  therefore  require  that 
excessive security charges are levied on some passenger categories. The Commission has also 
found that discriminatory and excessive security charges can have implications for state-aid.6 

Article 5 of the framework Regulation 300/08 on aviation security  already requires security 
charges  to  be  cost-related.7  However,  this  provision  is  too  vague  to  ensure  its  applicability 
because only applies as far as may be practicable and is therefore not effective. 

6 

7 

State aid — Germany — State aid C 29/08 (ex NN 54/07) — Germany — Flughafen Frankfurt Hahn 
and Ryanair — Invitation to submit comments pursuant to Article 88(2) of the EC Treaty, (OJ C 12 of 
17.1.2009) 
Regulation  (EC)  No  300/2008  of  the  European  Parliament  and  of  the  Council  of  11  March  2008  on 
common rules in the field of civil aviation security and repealing Regulation (EC) No 2320/2002, (OJ L 
97, 9.4.2008, p. 72) 

EN 

9 

   EN 

                                                 
Security charges 

The  authority  responsible  for  aviation  security  charges  a  security  tax,  fee  or,  most  often,  a 
security  charge  on  airlines,  passengers  and  cargo  shippers,  to  recover  the  cost  of  airport 
security. Security charges are almost always levied on a per passenger basis. The level of this 
levy is often based on forecast passengers at the airport and estimated airport security costs. 
Any under- or over-recovery of costs from previous years are also taken into account. 

Airports  sometimes  consult  with  airlines  and  airline  organisations  on  airport  and  security 
costs. Security charges are distinct from airport charges; security charges shall cover security 
costs while airport charges shall cover mainly terminal and runway costs. The consultations 
often take place on a regular basis, usually once every year to adjust the level of security and 
airport charges to changes in traffic and costs. 

Frequently  the  relevant  authority  delegates  the  responsibility  to  implement  aviation  security 
requirements to the airports, which then are responsible for the levying of security charges. 

Annexes I and VI give an overview of security costs and corresponding charges levied at the 
main airport in each Member State. Security charge per passenger can vary between Member 
States. Firstly, the passenger security charge is often lower at airports with high traffic due to 
economies  of  scales  which  allow  the  airport  to  allocate  the  cost  over  more  passengers. 
Secondly,  security  charges  are  lower  in  Member  States  that  finance  a  large  share  of  airport 
security through the public budget. 

In addition to airport security costs, airlines and Member States also have other security costs. 
These costs usually are not covered by security charges levied on air passengers. 

2.2 

Drivers of these problems 

2.2.1 

Lack of transparent security costs 

Security charges have historically been part of airport charges which airports levy on airlines 
to recover terminal and runway costs. Recently, all charges are increasingly differentiated to 
adjust to the needs of the individual airline. This has sometimes raised questions with regard 
to the State aid rules as most airports still have significant proportion of public ownership and 
differentiated  charges  may  unjustly  benefit  one  airline  over  other  airlines.  Differentiated 
airport charges are not necessarily discriminatory provided that such differentiation is based 
on objective grounds, such as providing incentives for starting-up new routes from an airport. 

The Commission has intervened and developed guidelines over time to clarify how to apply 
the State aid rules on airports.8 The Commission also clarified in its 2006 report on financing 
of  transport  security  that,  measures  to  protect  European  citizens  against  terrorist  attacks  are 
not  primarily  an  economic  activity  as  they  are  essentially  a  state  responsibility.9  Public 

8 

9 

Community  guidelines  on  financing  of  airports  and  start-up  aid  to  airlines  departing  from  regional 
airports, (OJ C 312 of 9.12.2005)  
COM(2006) 431 final of 1.8.2006 

EN 

10 

   EN 

 
                                                 
financing of such measures does therefore not fall within the scope of the rules on State aid.10 
However,  if  security  charges  recover  more  than  the  security  costs  such  charges  are  then 
excessive.  The  additional  revenues  from  excessive  security  charges  have  to  be  investigated 
under State aid rules. The Commission has recently opened an investigation under the State 
aid  rules  that  an  airport  set  the  level  of  security  charges  above  the  level  needed  to  recover 
security cost11. 

Discriminatory  or  excessive  security  charges  are  not  possible  to  detect  without  having 
detailed information costs and revenues. Charges for aviation security are seldom levied in a 
transparent  manner.  Both  the  replies  from  Member  States  and  industry  organisations  made 
this evident.  

The  bodies  levying  security  charges  –  be  it  either  national  authorities  or  airports  -  have  no 
incentives  to  provide  airlines  with  financial  information  on  security  costs  because  this  will 
allow  the  airlines  to  criticise  the  ways  the  security  activities  are  performed.  Airlines  and 
airports  have  discussed  the  relevant  rate  of  return  on  security  activities.  Airlines  argue  that 
security  activities  should  not  generate  any  return.  Airports  claim  that  a  reasonable  return  is 
necessary.  Disclosing  financial  information  would  inevitable  lead  to  a  discussion  on 
reasonable rate of return. Member States' views are often close to the airports' because most 
airports are still publicly owned. 

In  addition,  an  airline  benefiting  from  differentiated  security  charges  does  not  require  that 
financial  information  is  made  public  to  all  airlines.  Furthermore,  the  body  levying  security 
charges  may  have  other  incentives  no  to  fully  disclose  all  financial  information  on  security 
costs.  As  the  Commission  investigation  mentioned  above  found,  the  revenues  from 
overcompensation from security activities may be used to fund activities by the airport are in 
competition with other activities. This overcompensation therefore risks distorting the market 
for  airport  services  at  an  airport  because  the  activities  being  subsidised  by  security  charges 
have an advantage over other activities. 

As pointed out by Peel Airports Group, airport charges and security charges are increasingly 
set  in  multi-annual  contracts  between  airports  and  airlines.  The  level  of  these  charges  will 
consequently depend on the circumstances when the parties entered the contract and such on 
economic  and  traffic  forecasts  made  at  the  time.  Such  long-term  contracts  will  increase  the 
risk  of  discriminatory  charges.  In  addition,  the  traffic  volumes  at  an  airport  may  change  so 
that the security levy is too low to recover the security costs for an airline. The airport may 
then recover these losses by overcharging other airlines, air passengers or cargo shippers for 
their security costs. Security charges will therefore become more and more discriminatory and 
excessive over time as the industry becomes less aware of certain fundamental principles with 
regard to recovering security costs. 

The replies to the questionnaire confirmed that only very few Member States have legislation 
in force explicitly prohibiting windfall profits in conjunction with the imposition of security 
charges/taxes/fees.  Other  Member  States  refer  to  legislation  obliging  security  charges  to  be 
based on the actual cost of providing the service, which would imply that the level of security 

10 

11 

Community  guidelines  on  financing  of  airports  and  start-up  aid  to  airlines  departing  from  regional 
airports, (OJ C 312 of 9.12.2005)  
State aid — Germany — State aid C 29/08 (ex NN 54/07) — Germany — Flughafen Frankfurt Hahn 
and Ryanair — Invitation to submit comments pursuant to Article 88(2) of the EC Treaty, (OJ C 12 of 
17.1.2009) 

EN 

11 

   EN 

                                                 
charges  cannot  exceed  the  cost  of  security  measures.  In  some  Member  States  modified 
security  charges  have  to  be  approved  by  the  authorities  before  the  entry  into  force.  An 
overview of the replies from Member States to the questionnaire is given in Annex I. 

2.2.2 

Security charges are the only airport fees not regulated 

Community law already covers other major fees levied on airlines at an airport. The Directive 
on  groundhandling  opened  up  the  market  for  passenger  and  cargo  handling  at  EU  airports. 
The Directive also establishes certain principles for levying the fees the groundhandler has to 
pay to the airport for using airport infrastructure. The aim is that the airport shall not be able 
to  use  its  dominance  to  levy  fees  that  are  abusive.  These  fees  shall  therefore  be  non-
discriminatory and cost-related.12 

The Directive on airport charges has recently entered into force.13 It establishes new European 
rules  for  levying  airport  charges  and  addresses  financing  airport  infrastructure  in  general.14 
The  Directive  is  based  on  internationally  accepted  principles  already  endorsed  by  the 
International  Civil  Aviation  Organization  (ICAO)15:  transparency,  consultation  and  non-
discrimination.16  An  overview  of  the  main  elements  of  the  Directive  can  be  found  in  annex 
VIII. 

The air transport industry has been increasingly deregulated during the last 20 years with the 
privatisation of more and more state-owned airlines and airports. At the same time, previously 
military airfields are being conversed into airports open for commercial traffic. This increased 
competition between airport and between airlines has led to more consumer choice and lower 
air fares. 

More competition has increased the pressure on each airport to attract traffic by lowering the 
level  of  airport  charges,  in  particular  at  smaller  and  regional  airports  where  airport  charges 
often  are  set  in  individual  contracts  with  each  airline.  Airport  charges  are  therefore 
increasingly differentiated according to the individual airline's bargaining power. At the same 
time,  very  few  airports  actually  recover  all  their  costs  through  airport  charges.  Airports 
therefore  recover  more  of  their  costs  from  airlines  with  a  weaker  bargaining  position  than 
from other airlines. Airlines in a strong position vis-à-vis the airport have therefore managed 
to have a significant competitive advantage over other airlines operating from the same airport 
through differentiated airport charges. 

In the same way as for airport charges, the increasingly competitive internal aviation market 
has also drawn airlines' attention to security charges. While the recently adopted Directive on 
airport  charges  will  provide  for  procedures  ensuring  that  airport  charges  are  set  in  a  non-

12 

13 

14 
15 
16 

Council Directive 96/67/EC of 15 October 1996 on access to the groundhandling market at Community 
airports, (OJ L 302 of 26.11.1996, p. 28) 
Directive  2009/12/EC  of  the  European  Parliament  and  of  the  Council  of  11  March  2009  on  airport 
charges (OJ L 70, 14.3.2009, p. 11) 
COM(2006) 820 final of 24.1.2007 
ICAO’s Policies on Charges for Airports and Air Navigation Services (Doc 9082/7), 2004, point 15. 
In general, a charge, unlike a tax, is levied in return of a service provided to the user. The level of the 
charge should therefore correspond to the cost of providing this service. This is usually referred to cost-
related  charges.  There  is  some  confusion  on  the  terms  used;  a  charge  is  often  called  a  tax.  If  the 
revenues from the tax are used to cover the cost of providing a service rendered to a user, it is still a 
charge.  This  impact  assessment  does  therefore  not  make  a  distinction  between  taxes/fees/charges  and 
uses "levy" to cover for all three terms. 

EN 

12 

   EN 

                                                 
discriminatory  way  following  a  dialogue  between  airlines  and  airports,  security  charges  are 
not covered by the Directive. 

2.3 

Who is affected, in what ways, and to what extent? 

Three  stakeholder  groups  can  be  identified  as  the  most  affected:  airlines,  airports  and 
consumers. 

Airlines  pay  security  charges  to  the  body  responsible  for  airport  security  –  be  it  either  an 
airport  or  the  national  authorities.  These  charges  constitute  approximately  1  percent  of  the 
average  air  fare.  Airport  security  also  often  impacts  the  daily  airline  operation  with  delays 
through  longer  passenger  check-ins  and  increased  costs  to  implement  requirements  specific 
for  airlines.  Discriminatory  security  charges  impact  the  level  playing  field  between  airlines. 
Airlines operating to smaller and regional airports are expected to be more affected as security 
charges tend to be more differentiated among airlines at those airports. 

Airports provide the facilities and infrastructure to the security service providers. As airport 
security is an increasingly large share of an airport's daily operation, other airport operations 
are also affected. Aviation security also increases the overall cost for airports as the airports 
not  always  can  recover  the  full  cost  of  airport  security.  ACI  stated  in  its  reply  that  security 
costs  account  for  on  average  35  percent  of  the  airports'  operating  cost.  The  corresponding 
figure  before  the  EU  aviation  security  measures  entered  into  force  was  5  to  8  percent. 
Similarly, on average 41 percent of the staff employed by an airport is now security related. 
Security costs affect smaller and regional airports more than larger airports with high traffic 
volumes because the cost per passenger decreases with increases in the passenger volume. 

Consumers – be they either air passengers or cargo shippers – pay the charges levied by the 
airline  or  the  airport.  They  pay  the  major  share  of  security  costs.  AEA  estimated  that  the 
average cost for security per passenger was €2.60 in 2007. 

Airport  security  providers  carry  out  the  actual  work  of  screening  passengers,  cargo  and 
baggage.  This  is  sometimes  done  by  the  airports  themselves  or  contracted  to  a  private 
company.  However,  any  option  studied  in  this  report  is  not  likely  to  have  any  significant 
impact on the security service providers. 

2.4 

How would the problem evolve, all things being equal? Should the EU act? 

Without  any  EU  action,  the  problems  identified  in  paragraph  2.1  will  continue  to  exist  and 
probably become more accentuated. 

Firstly,  there  is  an  increased  risk  that  security  charges  will  become  more  discriminatory. 
Individual contracts concerning airport charges between airports and airlines are increasingly 
common.  During  the  negotiations  of  those  contracts,  each  airline  will  try  to  exercise  its 
market  power.  An  airport  may  lower  the  level  of  charges  to  attract  a  new  airline. 
Consequently, it is unlikely that an airport will levy the same level of charges on all airlines. 

In  addition,  regional  and  smaller  airports  increasingly  regulate  airport  and  security  charges 
through long-term individual contracts with their airline customers. These charges are usually 
fixed even if the level of security cost varies over the duration of the contract. Such individual 
long-term contracts will therefore cause further distortions as there is an increased likelihood 
of different security charges for the same security control. Airlines operating from the same 

EN 

13 

   EN 

airport  will  therefore  face  different  security  costs  depending  on  their  bargaining  power  and 
when the contracts were finalised. 

Secondly, excessive security charges will not be identified without increased transparency of 
security costs. An airport can therefore use the monopoly it has to provide aviation security 
services at the airport to generate excessive profits. Consequently, the air passengers, airlines 
and cargo shippers will have higher security costs than necessary. Such excessive profits can 
also  be  used  to  subsidise  other  activities  of  the  airport  that  are  in  competition  with  other 
providers.  For  example  the  groundhandling  sector,  where  the  airport  often  is  providing 
groundhandling services in competition with other groundhandlers at the airport. 

Thirdly,  aviation  security  is  likely  to  be  provided  less  efficiently  over  time.  The  security 
provider  is  guaranteed  to  have  his  costs  recovered  through  the  security  charges  and  has 
therefore no incentives to increase the efficiency and control the costs. 

Fourthly, an increase in the number of complaints to national authorities and the Commission 
is  expected  because  security  charges  are  the  only  airport  fees  not  regulated.  The  complaint 
will refer to three issues: discriminatory or excessive security charges or inefficient provision 
of aviation security at EU airports. 

2.5 

Treaty base 

Any new proposal would be based on Article 80(2) of the Treaty establishing the European 
Community.  

The  subsidiarity  principle  applies  insofar  as  a  proposal  does  not  fall  under  the  exclusive 
competence of the Community. 

Diverging  security  charging  systems  continue  to  exist  in  the  Member  States.  This  situation 
hinders the existence of a true level playing field for airports and airlines alike. 

Community action will better achieve the objectives of the proposal for the following reasons: 

– 

– 

– 

– 

The  application  throughout  the  EU  of  a  common  set  of  basic  rules  with  regard  to 
security charges will ensure fair play between the aviation partners when defining the 
parameters for levying security charges.  

Member  States  implement  the  general  framework  regulation  on  aviation  security 
differently. This causes unnecessary fragmentation of the internal aviation market if 
such measures are not required. A proposal will also seek to improve the functioning 
of the internal air transport market by addressing aviation security measures that in 
fragment the market. 

Diverging  security  charging  systems  exist  in  the  Member  States.  Not  all  systems 
include  fundamental  principles  which  are  uniformly  applied  when  security  charges 
are  being  determined  and  the  underlying  method  for  their calculation  is  devised.  A 
proposal will aim at achieving such application. 

Any proposed action should be limited to the definition of a minimum of rules to be 
respected  when  Member  States  and/or  airport  operators  determine  the  levels  of 
security  charges  and  should  not  impose  a  particular  security  charging  system.  The 
discretion to define such a system remains with the Member States. 

EN 

14 

   EN 

SECTION 3: OBJECTIVES 

The main objectives are to protect consumers' interest and to avoid excessive security charges. 
These  charges  shall  therefore  neither  discriminate  nor  recover  more  than  the  cost  incurred. 
Consequently, the first objective is to protect consumers' interest through non-discriminatory 
security  charges.  The  second  objective  is  to  avoid  excessive  security  charges  -  security 
charges  recover  more  than  cost.  This  should  also  encourage  a  more  efficient  provision  of 
security services. 

The State shall therefore not use aviation security to discriminate between categories of users 
- be they airlines, air passengers or cargo shippers. This is one of the actions already requested 
by  the  mid-term  review  of  the  Commission's  2001  White  Paper:  'Keep  Europe  moving; 
Sustainable  mobility  for  our  continent'.17  The  review  asked  for  a  level  playing  field  to  be 
stimulated where the cost of security measures is likely to distort competition and to examine 
the functioning and costs of current security rules in air transport.  

Furthermore, consumers should have certainty that revenues from security charges only cover 
security costs. For example, if an airport charges a security charge, the airport shall only be 
compensated for the costs. The 2001 White Paper: 'European transport policy for 2010: time 
to decide' already drew the attention to this right of the users of the transport system to have 
information on what they are being charged for.18 

General objectives 

Specific objectives 

Protect consumers' interest 

–  Ensure 

that  security  charges  do  not 
discriminate among airlines, air passengers 
or cargo shippers 

Avoid excessive security charges 

–  Ensure  that  security  charges  exclusively 

are used to meet security costs 

–  Encourage  efficient  provision  of  security 

services  

Increased efficiency in providing aviation security services will favour the competitiveness of 
the  European  aviation  sector.  A  Commission  proposal  contributes  to  the  objectives  of  the 
Lisbon  strategy  to  strengthen  the  competitiveness  of  the  European  economy  as  well  as  the 
drive  towards  "better  regulation"  by  avoiding  discriminatory  and  excessive  security  charges 
and encouraging an efficient provision of security services. 

SECTION 4: POLICY OPTIONS 

The  previous  analysis  has  shown  that  the  increased  importance  of  aviation  security  is 
affecting the internal aviation market and is having increasingly undesired economic effects.  

Option  2  analyses  whether  the  problems  identified  can  be  addressed  through  self-regulation 
by  the  industry.  Option  3  is  as  option  2  based  on  mandatory  transparency,  they  will  be 

17 
18 

COM(2006) 314 final of 22.6.2006 
COM(2001) 370 final of 12.9.2001 

EN 

15 

   EN 

                                                 
analysed separately as the increased administrative costs in option 2 may merit the increased 
efficiency. Option 4 removes the impact of discriminatory charges by obliging Member States 
to pay them. The status quo will be considered as "option 1" or the base case against which 
the other options will be measured: 

(0) 

No regulatory action. 

(1) 

(2) 

(3) 

4.1 

Transparent security costs through self-regulation by the industry. 

Obligatory  transparency  of  security  costs  coupled  with  a  requirement  that  revenues 
from  security  charges  shall  be  used  to  exclusively  to  meet  security  costs.  Airlines 
should  also  have  the  possibility  to  appeal  security  charges  to  a  national  supervisory 
authority.  

An obligation on Member States to finance all airport security measures. 

Option 1: No EU action 

This option assumes no new EU action. However, this option will have to assess the impact of 
the future Directive of airport charges. 

4.2 

Option 2: Self-regulation 

This  option  suggests  that  airports  and  airlines  would  cooperate  to  increase  transparency  of 
security  costs.  The  aim  of  this  would  be  to  avoid  discriminatory  and  excessive  security 
charges.  The 
to  develop  any  guidelines  as  ICAO 
recommendations  on  security  charges  are  already  exist.  As  these  principles  already  exist, 
there  is  no  need  for  the  Commission  to  issue  any  non-binding  recommendations.  These 
principles are: 

industry  parties  do  not  have 

–  Transparency of security costs. The aviation security provider should present information 
on the cost elements and show how the level of security charge is arrived at. Usually, all 
the costs of passenger security are divided by the expected number of passengers. 

–  Regular consultations between aviation security providers, airports and airlines. The costs 
mentioned  above  should  be  presented  by  the  security  providers  to  the  airports  and  the 
airlines on a regular, often yearly, basis and at least before the level of security charge is 
changed. 

–  Non-discrimination between airport users. Security charges shall not discriminate between 
airlines, air passengers or cargo shippers. Consequently, the level of security charge shall 
reflect the cost to which each category of user give raise. 

–  Security  charges  shall  not  recover  more  than  the  security  costs.  The  level  of  security 
charge  shall  not  be  set  than  what  is  necessary  to  recover  the  aviation  security  costs.  If 
security  charges  recover  more  than  the  costs  during  a  year,  possibly  because  of  an 
unforeseen increase in traffic, this over-recovery shall be carried over to the next year and 
thereby reducing the cost base for that year. And vice-versa if security charges recover less 
than the costs. However, a reasonable rate of return on invested capital is allowed. 

EN 

16 

   EN 

4.3 

Option  3:  EU  Directive  on  non-discrimination,  transparency,  cost-relatedness 
and possibility to appeal 

Similarly as in option 2, this option would be based on ICAO recommendations for levying 
security charges. However, this option would make these four principles legally binding. 

On transparency, the bodies levying the security charges, which may either be the airport or 
the  relevant  national  authority,  will  be  obliged  to  make  all  elements  of  security  charges 
transparent  to  the  airlines:  staff  costs,  number  of  employees,  investments,  traffic  forecasts 
forming the basis for calculating the charges and any under- or over-recovery from previous 
years. Any change in the level of security charges shall also be justified by the body levying 
the security charges. 

Regular consultation will become obligatory. The body levying security charges shall present 
this  information  to  the  airlines  once  a  year.  This  is  sufficient  because  the  level  of  security 
charge does not change more than once a year. Similarly, airlines that wish to participate in 
these  consultation  meetings  shall  provide  information  their  envisaged  traffic.  This  will 
facilitate and increase the quality of the forecasts that form the basis for the establishing the 
security  charge.  However,  no  airline  is  obliged  to  participate  in  these  consultations  and  has 
therefore no obligation to submit the information required to participate in the consultations. 
This  option  would  still  allow  the  airports  and  the  security  service  provider  to  develop  the 
charging  system  in  detail  and  the  exact  fare  structure  for  different  categories  of  airlines, 
passenger and cargo shippers. 

In addition to the principles outlined in option 2, option 3 would include the possibility for air 
passengers  and  cargo  shippers  and  airlines  to  appeal  decision  on  security  charges  to  an 
independent  supervisory  authority.  The  supervisory  authority  shall  correct  security  charges 
that are discriminatory or excessive and can be the same as the authority set up the Directive 
on airport charges. The supervisory authority also needs to be independent from any airport, 
airline or airport security provider and shall have sufficient resources to carry out its work. A 
high  level  of  expertise  is  also  necessary  for  the  authority  to  promptly  assess  any  complaint 
within and take a decision within a given deadline. 

The Directive on airport charges makes the principles of transparency, consultation and non-
discrimination legally binding for airport charges levied at airports with an annual traffic of 
more than five million passengers. Consequently, this option would mainly widen the scope 
of Directive on airport charges to also include security charges. However, this option would 
apply to security charges levied at all EU airports. 

A  Directive  would  be  the  preferred  legal  instrument  for  this  option.  This  would  allow  for 
Member  States  to  align  the  principles  of  this  option  with  existing  national  principles  for 
financing aviation security. 

4.4 

Option 4: Full state funding of airport security 

In this option, all Member States would cover all costs for providing aviation security services 
at EU airports. The providers of airport security would consequently have their costs covered 
by the Member States. No security charges would be levied on passengers. 

The preferred option of all industry representatives is that Member States cover all costs for 
providing aviation security services, not only airport security costs. At the same time, almost 
every Member State that commented on this option so far made it clear that they are strongly 

EN 

17 

   EN 

opposing  this  option  and  do  not  want  any  restrictions  on  the  application  of  the  "user-pays" 
principle. 

This  option  could  therefore  have  been  discarded  at  this  stage  because  it  interferes  with  the 
"user-pays" principle for airport security costs and is therefore not likely to be adopted by the 
Council. However, this option will be assessed in the next section because of the strong and 
unambiguous argumentation of all industry stakeholders that Member States should cover, at 
least in part, the cost for states' core activities such as preventing terrorist attacks on citizens. 

A Regulation amending Regulation (EC) 300/08 would be the preferred legal instrument for 
this option; expanding upon existing Article 5 on Security Costs. 

SECTION 5: ANALYSIS OF IMPACTS 

The  Commission  has  previously  used  the  estimates  for  average  price  elasticities  in  aviation 
for  the  whole  market  typically  range  between  -0.6  and  -1.1.19  That  document  uses  a  price 
elasticity of -0.8 is an average for intra-EU flights. This analysis also assumes that low-cost 
airlines would be more affected than traditional airlines, because of a higher price elasticity of 
demand.  The  analyses  carried  out  by  DG  JRC  for  this  impact  assessment  produce  similar 
elasticities:  for  trips  TRANSTOOLS  shows  an  elasticity  of  -0.98,  while  for  passenger 
kilometres all three models used give elasticities in the range of -0.6 to -0.7. 

The 2004 study estimated that security charges are approximately between 1 and 2 percent of 
the air fare. The analysis will use the figure provided by AEA that the average security levy 
per departing passenger is €2.60. This is assumed to  be 1 percent of the average air fare, as the 
airport security related cost has declined since then. This seems to be reasonable in view of 
the 2007 data published by IATA for air fares for air travel in the EU, even though average air 
fares are notoriously difficult to assess as they constantly change and relate to commercially 
sensitive information for the airlines.20 

Arriving and departing passengers are the most used statistic to provide an estimate of the size 
of an airport, which is also used in the annexes. However, to assess the impact of the different 
option this report uses departing passengers because security charges are almost exclusively 
levied on departing passengers. 

5.1 

Option 1: No EU action 

Economic impacts 

•  This  option  is  identical  to  the  impact  identified  in  the  first  two  scenarios  described  in 
section  2.4.  The  two  impacts  are  believed  to  be  accentuated  because  the  Directive  on 
airport charges addresses major charges other than security charges. 

19 

20 

SEC(2005)467 of 5.4.2005. Cf. notably Gillen, Morrison, Stewart (2003), Élasticités de la demande de 
transport aérien de passagers: Concepts, problèmes et mesures; DETR (2000), Valuing the external cost 
of  aviation,  2000,  and  DETR,  Air  traffic  forecasts  for  the  United  Kingdom;  Resource  Analysis  et  al. 
(2000), Aviation Emissions and Evaluation of Reduction Options (AERO); ICAO (1995), Outlook for 
air  transport  to  the  year  2003.  Elasticities  differ  between  different  types  of  flights,  being  higher  for 
short-haul and for leisure flights than for long-haul and for business flights.  
IATA Fare Tracker, IATA, 2007. 

EN 

18 

   EN 

                                                 
–  Security charges could become more discriminatory.  

–  Security  charges  could  recover  more  than  the  cost  of  security.  In  addition,  there 
will be no incentive for the security providers  to  improve the efficiency of  their 
activities. 

•  If  security  charges  discriminate  between  airlines,  an  airline  could  decide  to  move  its 
operation  to  another  airport.  However,  an  airline  has  often  invested  in  the  airport  with 
infrastructure designed for its operations. To move to another airport would also mean that 
the  airline  would  have  start-up  new  routes  from  that  airport,  with  significant  marketing 
costs  and  a  loss  of  customers.  Consequently,  these  costs  will  unquestionably  offset  any 
possible discrimination in security charges. 

•  Security costs are also likely to increase over time because there are no incentives for the 
security  providers  to  improve  the  efficiency  of  their  activities.  This  will  generate 
complaints from the airlines. 

Social impacts 

•  No social impacts are expected. 

Environmental impacts 

•  No environmental impacts are expected. 

5.2 

Option 2: Self-regulation 

Economic impacts 

•  The  impact  of  2  is  similar  to  option  1  because  it  is  unlikely  that  self-regulation  by  the 
industry will effectively protect consumers' interest and promote a more efficient provision 
of  aviation  security  services.  The  ICAO  recommendations  on  which  this  option  is  based 
were adopted by contracting States to ICAO, including all EU Member States, already in 
1981.  Consequently,  the  industry  has  had  several  years  already  to  implement  these 
recommendations.  

•  As this option is not expected to have any identifiable impact, neither will it increase the 
burden  on  business  or  Member  States.  The  industry  does  not  need  to  develop  the 
guidelines as ICAO recommendations already provide sufficient level of detail. 

Social impacts 

•  No social impacts are expected. 

Environmental impacts 

•  No environmental impacts are expected. 

5.3 

Option  3:  EU  Directive  on  non-discrimination,  transparency,  cost-relatedness 
and possibility to appeal 

Economic impacts 

EN 

19 

   EN 

•  Transparency will allow for airlines to scrutinise the cost components serving as a basis for 
determining the level of security charges levied at the airport. Airlines can then give their 
views  on  how  the  revenues  from  airport  charges  are  used.  By  discussing  the  security 
measures  and  associated  costs,  better  and  more  cost-efficient  solutions  may  be  found. 
Transparency will also allow the airlines to discover whether other costs than for aviation 
security are included in the cost base for security charges. The discussions will also allow 
incorporating  the  airlines'  traffic  forecasts.  The  design  of  the  security  measures  depends 
largely  on  the  number  of  passengers  and  their  destinations.  The  input  of  the  airlines  and 
their traffic forecasts are therefore valuable with a positive impact on the efficiency of the 
provision  of  security  services.  Furthermore,  this  information  also  allows  for  airlines,  air 
passengers  and  cargo  shippers  to  verify  whether  security  charges  discriminate  among 
users. 

•  Mandatory  transparency  allows  identifying  discriminatory  or  excessive  security  charges. 
However, it may still lead to a lengthy discussion between airlines and airports on how to 
correct  such  charges.  This  option  obliges  bodies  levying  security  charges  to  consult,  and 
not to  negotiate, with  the  airlines.  A consultation  means  informing  and  listening  airlines, 
while a negotiation would require the actual consent of the airlines before introducing new 
charges.  AEA  identified  the  following  effects  at  the  airports  of  Hannover,  Hamburg, 
Stuttgart and Bremen after mandatory consultation and transparency were introduced: 

–  More  efficient  provision  of  airport  security  services.  For  example  through  more 
efficient screening procedures or changes in the setup of security infrastructure by 
combining screening points to increase utilisation. 

–  Improved  passenger  forecast  that  form  the  basis  for  calculating  the  security 

charges 

–  Removal of non-security related costs 

–  Improved benchmarking with other airports 

•  At  the  four  airports  mentioned  in  the  point  above,  these  measures  caused  the  average 
security  charge  per  passenger  to  fall  significantly  from  2004  to  2008.  Hannover  (-10%), 
Hamburg  (-15%),  Stuttgart  (16%)  and  Bremen  (-9%).  These  experiences  show  that 
security charges have on average been reduced by more than 10 percent.  

•  A 10% reduction of security cost should then translate into a reduction in the final air fare 
to the air passengers because of competition between airlines. As security costs constitute 
1% of the air fare, the competitive pressure in the market would pass on the reduction to 
the  passengers.  The  air  fare  is  therefore  expected  to  be  reduced  by  10%  of  1%  which 
results in a total reduction of 0.1%. 

•  A  quantitative  analysis  was  made  by  DG  JRC  to  test  the  hypothesis  of  a  0.1  percent 
reduction in total costs, which corresponds to a €0.26 reduction in the average air fare for a 
passenger.  Three  models  were  used  to  quantify  the  impact  (see  box  below  for  their 
description).  As  expected  the  different  models  estimate  a  negligible  increase  in  air 
passenger traffic (see Annex XII for detailed results). 

–  The  TRANSTOOLS  results  confirm  the  number  used  in  the  evaluation,  the 
expected  increase  in  total  passenger  traffic  would  be  0.098  percent  while 

EN 

20 

   EN 

passenger  kilometres  would  be  reduced  by  0.069  percent.  Rail  will  be  affected 
negatively, but to a very limited extent. Rail loses half a million trips a year while 
air  gains  3.2  million  trips.  Consequently,  TRANSTOOLS  estimates  that  number 
of  air  passengers  departing  from  EU  airports  will  increase  by  618,941  to 
632,191,578 passengers per year. 

–  The POLES results also agree. Intra-EU air trips are expected to increase by 0.074 
percent in terms of passenger kilometres compared to the baseline. The impact on 
flights  between  the  EU  and  the  rest  of  the  world  would  be  more  limited  (as 
expected),  the  main  combinations  affected  being  EU27-Middle  East  and  EU27-
Russia and ex-Soviet Union. 

–  TREMOVE  estimates  that  intra-EU  air  trips  are  expected  to  increase  by  0.063 

percent in terms of passenger kilometres compared to the baseline.  

•  The estimations presented in Annex XII show that the distribution of effects is expected to 
be  quite  uniform  among  EU-27  member  states.  However,  the  increase  in  demand  would 
affect  mainly  shorter  distances  (500-1000  km)  and  non-business  trips.  Among  airports, 
regional and smaller airports serve shorter routes and are therefore more likely to benefit 
from  this  increase  in  demand  than  larger  airports.  Among  airlines,  low-cost  and  regional 
airlines are also able to profit more than larger airlines.21 

•  The administrative burden on the body levying security charges is negligible. There will be 
some  increased  costs  to  produce  the  necessary  material  for  the  consultations  with  the 
airlines.  This  material  is  however  easily  accessible  and  its  collection  will  therefore  only 
give raise to insignificant costs.  

–  Data on the costs of security staff is accessible because security staff only perform 
security  tasks  and  therefore  easily  identifiable.  In  addition,  the  tasks  of  the 
security staff are often sub-contracted. 

–  The cost of additional material, such as screening machines, is easily identifiable 
as  such  material  only  can  be  used  to  for  security  activities  and  therefore  not 
possible to allocate to other activities. 

•  Option 3 contains the possibility for airlines to appeal decisions on setting security charges. 
These  appeals  shall  be  examined  by  an  independent  supervisory  authority  that  will  have 
the  necessary  competence  to  quickly  examine  any  complaint.  This  will  speed  up  the 
handling  of  complaints  compared  with  lodging  a  complaint  to  the  Commission.  This 
possibility to appeal could encourage airlines to submit complaint to delay the introduction 
of  new  security  charges.  However,  a  competent  independent  supervisory  authority  will 
quickly  assess  whether  the  complaints  are  well-founded  or  not.  This  option  therefore 
foresees the possibility for the authority to take an interim decision on the entry into force 
of the new security charges. 

•  Option  3  will  increase  the  administrative  burden  on  Member  States  because  this  option 
suggests the establishment of a national supervisory authority to examine the complaints. 
The Directive on airport charges will however already oblige Member States to establish 
such authorities. Consequently, these authorities will have to assess complaints on security 

21 

See section 4 "Conclusions" of Annex XII. 

EN 

21 

   EN 

                                                 
charges in addition to complaints on airport charges. This additional task is expected to be 
insignificant  and  in  any  case  not  more  than  the  cost  of  one  full  time  staff  per  Member 
State. 

•  However, at airports to which the Directive on airport charges does not apply, this means 
at  airports  with  an  annual  traffic  of  less  5  million  passengers,  these  consultations  would 
have to be established. However, the cost of one yearly meeting between airports, airlines 
and the security service providers is very low and not possible to establish. If the smaller 
airports were exempt from this option these airports would not benefit from the expected 
cost  reductions.  In  particular,  when  these  reductions  are  expected  to  be  proportionally 
higher  at  smaller  and  regional  airport  than  at  larger  airports.  Neither  would  the  low-cost 
and regional airlines operating to smaller airports benefit. 

•  The  administrative  burden  on 

into 
the  Commission 
discriminatory or excessive security charges will also be reduced. This reduction will not 
be significant. 

investigate  complaints 

to 

Social impacts 

•  No social impacts are expected. 

Environmental impacts 

•  The environmental impact is expected to be very small, because the increase in air traffic is 
estimated  to  minimal.  The  modelling  exercise  estimates  that  the  external  cost  of  the 
environmental impacts would be negligible, totalling less than €1 million per year. 22 

5.4 

Option 4: Full state funding of airport security 

Economic impacts 

•  No security charges will be levied on airports, airlines and consumers, this option would 

therefore remove any discriminatory aspects of security charges. 

•  It is, however, not evident that this will benefit air passengers through lower air fares, at 
least not in the short run. Airlines may either choose to lower the air fares or to increase 
their  profits.  The  airlines'  response  will  depend  on  a  number  of  factors  including: 
passengers'  demand  price  elasticity,  mix  of  business  and  leisure  passengers, airlines'  cost 
structure and response of competitors to the lower security costs. 

•  If  one  were  to  assume  that  there  is  perfect  competition  in  the  air  transport  market,  the 
airlines  would  reduce  the  air  fare  with  their  lower  costs  for  security.  Assuming  that 
aviation security is 1 percent of the air fare and a price elasticity of -0.8 would result in an 
increase in traffic of 0.8 percent. Departing passengers at EU airports would then increase 

22 

Please  see  Annex  XII,  section  3.3.  Environmental  Impacts.  After  estimating  the  increase  in  transport 
demand  as  a  result  of  the  change  in  air  fare,  the  corresponding  increase  in  emissions  and  other 
externalities were estimated. The emission factors from TREMOVE were multiplied by the change in 
passenger kilometres. This was translated into monetary terms using the values from the Handbook for 
the  internalisation  of  external  costs  where  available  and  for  the  remaining  ones  we  used  TREMOVE 
figures for external costs per passenger kilometre. 

EN 

22 

   EN 

                                                 
by 5 052 581 to 636 652 218 using 2007 figures. Similarly, the effects quantified in fourth 
bullet point in section 5.3 are expected to be ten times higher. 

•  As  discussed  in  section  2.1.1,  the  impact  on  competition  between  airports  is  expected  to 
negligible. Competition between airlines is expected to be affected in the same way as in 
option 3 through the removal of discriminatory security charges. 

•  The costs for Member States would increase by the same amount as security charges yield 

revenue: this means approximately €1.6 billion per year. 

•  There  will  be  little  incentives  for  the  providers  of  aviation  security  to  increase  the 
efficiency  of  their  operations,  because  Member  States  are  required  to  cover  all  costs. 
Actually, the security service providers may even reduce their efficiency as this comes at 
no cost for them. 

•  As in option 3, low-cost and regional airlines that serve regional and smaller airports are 
therefore  more  likely  to  benefit  from  this  increase  in  demand  than  larger  and  airlines 
airports.23 

•  An  obligation  on  Member  State  to  cover  aviation  security  costs  would  also  remove 
possible current distortions to competition from the existing differences between Member 
States in the level of public funding. However, the Commission concluded in the "Report 
on  financing  aviation  security"  competition  between  airports  and  between  airlines  is  not 
likely  to  be  significantly  impacted  by  differences  in  the  security  levies  between  Member 
States, provided that such differences do not discriminate between airlines, air passengers 
or cargo shippers. Transparency of security costs is necessary to verify that security levies 
are  non-discriminatory  and  therefore  also  important  to  ensure  the  security  levies  do  not 
distort competition between airlines. 

•  The impact on competition between airports and competition between airlines is negligible. 
Airlines operating from the same airport will benefit equally from any public funding. One 
airline will therefore not have an advantage over the other airline due to the level of public 
funding.  An  airport  located  in  a  Member  State  with  high  levels  of  public  funding  could 
have an advantage over an airport located in a different Member State with low levels of 
public funding. For this to have any impact on competition, these airports need to serve the 
same  markets.  However,  it  is  unlikely  that  airports  located  in  different  Member  States 
serve identical markets. In addition, the Commission is not aware that an airline has moved 
its  operation  from  one  airport  to  another  airport  that  serves  the  same  market  due  to 
differences in the security costs between the two airports. 

•  Option  4  is  not  expected  to  have  a  positive  impact  on  competition  between  airports  or 

between airlines. 

Social impacts 

•  No social impacts are expected. 

Environmental impacts 

23 

See section 4 "Conclusions" of Annex XII. 

EN 

23 

   EN 

                                                 
•  This option would generate the highest increase in traffic, and therefore the largest impact 
on  the  environment  of  the  options  assessed.  The  environmental  impact  of  option  4  is 
expected to 10 times the environmental impact of option 3, because the reduction in the air 
fare is 10 times. The environmental impact of option 4 could therefore be estimated to less 
than €10 million. 

EN 

24 

   EN 

The modelling approach by DG JRC 

Three different models, that capture different aspects, were used: 

TRANSTOOLS: being a network model it can capture the impact on modal split. This model 
estimates  the  impact  of  a  reduction  in  the  air  fare  on  number  of  passenger  trips  and  on  the 
total number of kilometres travelled by passengers. 

POLES: allows the analysis of the impacts at global level. It estimates changes in air traffic 
within and between different regions. The model takes the fleet composition of the different 
regions into account when estimating the environmental impact of a change in the air fare. 

TREMOVE:  detailed  externalities  and  welfare  module.  The  model  consists  of  separate 
country models.  Each county model describes transport flows  and emissions in three model 
regions: one metropolitan area, an aggregate of all other urban areas and an aggregate of all 
non-urban  areas.  The  model  explicitly  takes  into  account  that,  depending  on  the  area  taken 
into consideration, the relevant modes and network types differ. 

All three models assume that the demand curves are linear for changes in the airline cost of 
0.005 to 0.1 percent and the resulting impacts are therefore directly proportional to the level 
of change assumed. 

SECTION 6: COMPARING THE OPTIONS 

Each and every option has its advantages and disadvantages to address the distortions caused 
by the aviation security to the functioning of the internal aviation market. 

The  exception  may  be  the  non-regulatory  option  as  this  option  does  not  meet  the  increased 
focus on security charges that is anticipated with the increasingly harder competition between 
airlines.  This  option  does  not  require  any  implementation  and  is,  in  addition,  supported  by 
Member States. 

The non-regulatory option does however not impact on the security measures that distort the 
market  for  air  transport  services.  Furthermore,  the  recently  adopted  Directive  on  airport 
charges does not apply to security charges. There is therefore no applicable Community law 
that prohibit security charges to discriminate among airlines or passengers. Neither does this 
option ensure that revenues from security charges exclusively are used to meet security costs 
and thereby protect passenger rights. 

The following table summarises the quantitative impacts per year of the options studied. 

Options 

1 

2 

3 

4 

No EU action 

Self-regulation 

Full state 
funding 

Mandatory 
transparency, 
cost-relatedness 
and possibility 
to appeal 

EN 

25 

   EN 

 
Options 

1 

2 

3 

4 

No EU action 

Self-regulation 

Impact 
traffic 

on 

0 

External costs 

Financial 
impact 
on 
Member States 

Administrative 
burden 
on 
Member States 

Financial 
impact 
industry 
air passengers 

on 
and 

Increased 
burden 
business 
industry 

of 
on 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Full state 
funding 

Mandatory 
transparency, 
cost-relatedness 
and possibility 
to appeal 

Increase in 
passenger traffic 
by 0.6 million 
passengers per 
year 

Increase in 
passenger traffic 
by 6 million 
passengers per 
year 

(TRANSTOOLS 
estimate) 

(TRANSTOOLS 
estimate) 

€1 million 

€10 million 

0 

Increased costs 
by €1.6 billion 

Negligible 
negative impact 

Negligible 
negative impact 

Decreased costs 
by €1.6 billion 

Air passengers 
are expected to 
save €80 million 
and airline 
income is 
expected to 
increase by €60 
million24 

0 

Negligible 
negative impact 
on airports with 
an annual traffic 
of less than five 
million 
passengers 

Negligible 
negative impact 
on airports with 
an annual traffic 
of less than five 
million 
passengers 

The following table summarises the qualitative economic, environmental and social impacts 
of the options studied. 

24 

See section 4 "Conclusions" of Annex XII. 

EN 

26 

   EN 

 
                                                 
Impact table synthesis 

Options 

1 

2 

3 

4 

No EU action 

Self-regulation 

Economic Impact 

Competitivenes
s 
EU 
of 
companies 

=  No 
expected 

impact 

=  No 
expected 

impact 

Competition  in 
internal 
the 
market  

=  No 
expected 

impact 

=  No 
expected 

impact 

Operating  costs 
and  conduct  of 
business 

=  No 
expected 

impact 

=  No 
expected 

impact 

Full state 
funding 

Mandatory 
transparency, 
cost-relatedness 
and possibility 
to appeal 

Improves 

+ 
international 
competitiveness 
of 
EU 
companies 

Improves 

++ 
international 
competitiveness 
of 
EU 
companies 

Reinforces 

+ 
competition 
between  airlines 
and 
between 
airports 

+  Reduces  cost 
of 
aviation 
security  through 
increased 
efficiency 

=  No 
expected 

impact 

++  Significant 
reductions 
in 
cost  of  aviation 
security 

EN 

27 

   EN 

Options 

1 

2 

3 

4 

No EU action 

Self-regulation 

Administrative 
cost on business 

=  No 
expected 

impact 

=  No 
expected 

impact 

Innovation  and 
research 

=  No 
expected 

impact 

=  No 
expected 

impact 

Mandatory 
transparency, 
cost-relatedness 
and possibility 
to appeal 

Increased 
+ 
information  on 
costs 
security 
it 
will  make 
for 
easier 
to 
airlines 
comply 
with 
existing 
Community law 

-/=  Negligible 
negative  impact 
on  airports  with 
an  annual  traffic 
of  less  than  five 
million 
passengers 
because 
these 
airports  are  not 
obliged  today  to 
establish  regular 
consultation 
procedures 

+ 
Increased 
transparency and 
benchmarking 
between  airports 
stimulate 
will 
efficient 
more 
airport security 

Full state 
funding 

=  No 
expected 

impact 

impact 
=/-  No 
expected. 
A 
State  guarantee 
to  always  cover 
security 
costs 
actually 
may 
create 
to 
disincentives 
find 
more 
efficient ways to 
provide  aviation 
security 

EN 

28 

   EN 

 
Options 

1 

2 

3 

4 

No EU action 

Self-regulation 

SMEs:  airlines, 
airports 
and 
security 
providers 

=  No 
expected 

impact 

=  No 
expected 

impact 

Full state 
funding 

Mandatory 
transparency, 
cost-relatedness 
and possibility 
to appeal 

Reduced 
+ 
security costs for 
smaller 
and 
regional airports, 
as  well  as  for 
low-cost 
and 
regional airlines 

Reduced 
++ 
security costs for 
smaller 
and 
regional airports, 
as  well  as  for 
low-cost 
and 
regional airlines 

Consumer  and 
households 

=  No 
expected 

impact 

=  No 
expected 

impact 

+ 
discrimination 

Non-

No 
+ 
overcharging  for 
security costs 

Reduced 
+ 
security 
costs 
should  reflect  in 
air fares 

Reduced 
+ 
security 
costs 
should  reflect  in 
air fares 

Social Impact 

Employment 

=  No 
expected 

impact 

=  No 
expected 

impact 

=  No 
expected 

impact 

=  No 
expected 

impact 

Environmental Impact 

Air Quality 

=  No 
expected 

impact 

=  No 
expected 

impact 

=/-  Negligible 
impact 

=/-  Negligible 
impact 

Climate 

=  No 
expected 

impact 

=  No 
expected 

impact 

=/-  Negligible 
impact 

=/-  Negligible 
impact 

Mobility 
use of energy 

and 

=  No 
expected 

impact 

=  No 
expected 

impact 

=  No 
expected 

impact 

=  No 
expected 

impact 

EN 

29 

   EN 

 
The impact of the various options on the specific is summarised in the following table: 

Specific 
objectives 

Security 
charges  do  not 
discriminate 
among  airlines, 
air  passengers 
or 
cargo 
shippers 

–  Security 
charges 
exclusively 
are  used  to 
meet  security 
costs 

Encourage 
efficient 
provision 
of 
security services 

1 

2 

3 

4 

No EU action 

Self-regulation 

Full state 
funding 

Mandatory 
transparency, 
cost-
relatedness 
and 
possibility to 
appeal 

=  

+/= 

++ 

++ 

No impact 
expected 

This option is 
unlikely to 
increase the 
transparency of 
security costs 
which makes 
discriminatory 
security charges 
visible. 

This option 
explicitly 
prohibits 
discrimination 
among 
airlines, 
passengers or 
cargo shippers.  

Discriminatory 
security charges 
will not exist in 
this option 
because it 
abolishes all 
security charges. 

=  

+/= 

++ 

++ 

No impact 
expected 

This option does 
makes excessive 
security charges 
visible but does 
not provide any 
remedies 

A legal 
obligation 
makes this 
obligatory 

This option 
abolishes 
taxes/fee/charges 
which can 
therefore not be 
used for other 
costs 

-/= 

+/= 

+ 

- 

If Member States 
cover all security 
costs, the 
providers of 
aviation security 
have no 
incentives to 
increase their 
efficiency or 
reduce their 
costs. 

No expected 
impact 

Airlines will 
have access to 
information on 
the 
organisation of 
aviation 
security and its 
costs. Airlines 
can therefore 
suggest 
improvements. 

If Member 
States cover all 
security costs, 
the providers of 
aviation security 
have no 
incentives to 
increase their 
efficiency or 
reduce their 
costs. 

Option  4  most  effectively  addresses  the  concerns  of  discriminatory  and  excessive  security 
charges. However, this option discourages a more efficient aviation security services because 
there are no incentives for the security providers to control the costs. 

EN 

30 

   EN 

 
 
From the above analysis, it can be concluded that, considering the market condition today and 
in the coming years, option 3 presents the most favourable combined outcome of the options 
considered.  The  increased  administrative  burden  of  option  3  is  negligible  and  clearly 
outweighs  its  effectiveness  in  reaching  the  objectives.  Indeed,  its  economic  impact  is  more 
positive than the other options while the social and environmental effects are comparable or 
even positive.  

Option 3 most effectively reaches the objectives set for a proposal on security charges: 

•  Option  3  fully  meets  consumers'  interest  by  explicitly  prohibiting  discriminatory  or 

excessive security charges. 

•  Option 3 promotes more efficient provision of security services and therefore lower overall 

costs for aviation security. 

Option  3  will  increase  the  administrative  burden  on  Member  States,  compared  to  option  2. 
However,  this  increase  in  administrative  burden  will  be  negligible  because  the  independent 
authority  on  airport  charges  established  by  the  Directive  on  airport  charges  may  be  used. 
Opting  for  the  form  of  a  Directive,  and  not  a  regulation,  would  have  the  advantage  of 
allowing Member States to transpose such principles in line with the implications of diverse 
legal  and  administrative  systems  and  thereby  keeping  the  administrative  burden  to  a 
minimum. The estimations presented in Annex XII show that the increase in demand would 
affect  mainly  shorter  distances  (500-1000  km)  and  non-business  trips.  The  distribution  of 
effects is expected to be quite uniform among EU-27 member states. 

Option 3 is  broadly supported  by stakeholders and Member States. No stakeholder opposed 
option  3,  even  if  option  4  is  the  preferred  option  by  all  stakeholders.  Member  States  have 
already  in  ICAO  endorsed  the  principles  on  which  option  3  is  based.  This  option  would 
support Member States' commitment in ICAO to levy more transparent security charges and 
taxes.  Option  3  is  based  on  internationally  accepted  principles  endorsed  by  ICAO.25 
Consequently, option 3 supports and strengthens already existing frameworks at national level 
for levying security charges. 

Option  3  also  provides  the  information  necessary  for  airlines  that  wish  to  present  security 
charges  on  the  air  ticket.  Article  23  of  the  recently  revised  third  package  of  air  transport 
obliges airlines that present security charges on the air ticket to quote the correct amount.26 

Consequently, option 3 offers the most efficient overall solution. 

SECTION 7: MONITORING AND EVALUATION 

The Commission will continuously monitor the developments in the aviation security sector 
and evaluate on a regular basis the impact of the proposed legislation. More specifically, the 
Commission will observe market developments with regard to the following issues: 

•  The impact on consumers and the aviation industry. 

25 
26 

ICAO’s Policies on Charges for Airports and Air Navigation Services (Doc 9082/7), 2004, point 29. 
Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 
on common rules for the operation of air services in the Community (Recast), (OJ L 293, 31.10.2008, p. 
3) 

EN 

31 

   EN 

                                                 
•  The level of transparency of security costs. 

•  The overall cost of aviation security in Europe. 

The  core  indicators  for  progress  towards  meeting  the  objectives  set  for  this  policy  initiative 
are the following: 

(1) 

The number of airports publishing their security charges. 

(2)  Whether there is a reduction in the level of security charges in Europe. 

The conclusions of the impact assessment are based on today's market situation. 

EN 

32 

   EN 

ANNEX I 

Overview of national legislation 

Member State 

Transparency and cost-relatedness 

The  main 
source 
for 
funding 

Total 
airport 
security 
cost 

Belgium 

Bulgaria 

N.A. 

N.A. 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users/state 

€ 9 million 

Czech Republic 

No  particular  mechanism  that  ensures 
transparency.  Cost-relatedness  can  be 
verified  when  the  levying  body  consults 
airlines on security charges. 

Users 

per 

(equals 
€2.89 
departing 
passenger) 

450  CZK 
million 

(approx. 
€17  million 
which 
equals 
€2.60 
departing 
passenger) 

per 

Denmark 

Germany 

Estonia 

Greece 

Spain 

No  particular  mechanism  that  ensures 
transparency.  The  government  ensures 
that security charges are cost-related. 

Users 

The  government  ensures  that  security 
charges are transparent and cost-related. 

Users 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users 

€ 6 million 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users/state 

Transparency  of  security  charges 
ensured through legislation. 

is 

Users/state 

per 

(equals 
€6.86 
departing 
passenger) 

316 

€ 
million 

(equals 
€3.04 
departing 

per 

EN 

33 

   EN 

 
 
 
 
Member State 

Transparency and cost-relatedness 

The  main 
for 
source 
funding 

Total 
airport 
security 
cost 

passenger) 

France 

Ireland 

Italy 

Cyprus 

The  government  ensures  that  security 
charges are transparent and cost-related. 

Users 

No  particular  mechanism  that  ensures 
transparency.  The  government  ensures 
that security charges are cost-related. 

Users 

imposes 
charges.  The 

transparency  of 
Legislation 
security 
government 
ensures  that  security  charges  are  cost-
related. 

Consultation  with  airlines  ensures  that 
security charges are transparent and cost-
related. 

Users 

€ 58 million 

per 

(equals 
€0.86 
departing 
passenger) 

Users 

€ 12 million 

per 

(equals 
€3.43 
departing 
passenger) 

Latvia 

Lithuania 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users/state 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users/state 

€ 5 million 

Luxemburg 

N.A. 

Hungary 

No  particular  mechanism  that  ensures 
transparency.  The  government  ensures 
that security charges are cost-related. 

Malta 

N.A. 

The Netherlands 

Special  legislation  ensures  that  security 
charges are transparent and cost-related. 

per 

(equals 
€4.54 
departing 
passenger) 

€ 25 million 

per 

(equals 
€5.69 
departing 
passenger) 

253 

€ 
million 

N.A. 

Users 

N.A. 

Users 

EN 

34 

   EN 

 
 
 
 
 
Member State 

Transparency and cost-relatedness 

The  main 
for 
source 
funding 

Total 
airport 
security 
cost 

per 

(equals 
€9.99 
departing 
passenger) 

Austria 

Poland 

Portugal 

Romania 

Slovenia 

Slovakia 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users 

No  particular  mechanism  that  ensures 
transparency.  The  government  ensures 
that security charges are cost-related. 

Users 

€ 29 million 

per 

(equals 
€3.21 
departing 
passenger) 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users 

No  particular  mechanism  that  ensures 
transparency.  The  government  ensures 
that security charges are cost-related. 

Users/state 

€ 62 million 

N.A. 

No  particular  mechanism  that  ensures 
transparency.  The  government  ensures 
that security charges are cost-related. 

N.A. 

Users 

(equals 
€17.04  per 
departing 
passenger) 

SKK 

56 
million 

(approx. 
€1.85 
million 
which 
equals € per 
departing 
passenger) 

Finland 

Consultation  with  airlines  ensures  that 
security charges are transparent and cost-
related. 

Users 

€ 40 million 

per 

(equals 
€4.60 
departing 
passenger) 

Sweden 

Mandatory  consultation  with  airlines  Users 

EN 

35 

   EN 

 
 
 
 
Member State 

Transparency and cost-relatedness 

ensures 
transparent and cost-related. 

security 

that 

charges 

The  main 
for 
source 
funding 

Total 
airport 
security 
cost 

are 

United Kingdom 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users 

Iceland 

Norway 

No  particular  mechanism  that  ensures 
transparency.  The  government  ensures 
that security charges are cost-related. 

Consultation  with  airlines  ensures  that 
security charges are transparent and cost-
related. 

IKR 

800 
million 

(approx. 
€2.76 
million) 

1  000  NOK 
million 

(approx. 
€110 
million 
which 
equals 
€5.39 
departing 
passenger) 

per 

Switzerland 

No  particular  mechanism  that  ensures 
transparency or cost-relatedness 

Users 

€ 96 million 

per 

(equals 
€5.46 
departing 
passenger) 

Source: Replies to the Commission questionnaire (Exchange rates from December 2009), 
Eurostat 

EN 

36 

   EN 

 
 
 
 
 
 
 
ANNEX II 

Summary of stakeholders' replies to the public consultation 

Below  is  the  summary  of  the  replies  to  the  questionnaire  submitted  in  April  and  of  the 
additional  comments  in  writing  submitted  after  stakeholder  meeting  on  17  July  2008.  This 
summary does not disclose information from replies indicated as confidential. 

ACI argued that financing aviation security is a State responsibility. Furthermore, mandatory 
application of "one-stop" security is the best avenue for ensuring a common security regime at 
EU level which would eliminate redundant and unjustified costs. The EU should also be more 
involved when Member States impose more stringent measures which should be financed by 
Member States. 

ACI  also  supports  more  transparency  and  clear  principles  for  levying  security  charges. 
However,  ACI  is  of  the  opinion  that  security  charges  will  be  covered  by  the  Directive  on 
airport  charges.  This  opinion  is  neither  shared  by  any  other  stakeholder  nor  by  the 
Commission. 

IATA  emphasised  that  the  international  air  transport  industry  is  confronted  by  a  financial 
crisis  and  that  in  many  states  outside  the  EU  aviation  security  is  mainly  financed  by  the 
government.  Member  States  should  therefore  finance  aviation  security,  in  particular  more 
stringent  security  measures  due  to  their  potentially  distorting  effect  on  competition.  IATA 
also  argued  for  EU  rules  obliging  Member  States  to  make  an  impact  assessment  when 
proposing national rules for aviation security. 

IATA  also  pointed  out  that  ICAO  States  have  agreed  to  certain  basic  principles  for  levying 
security charges: transparency, non-discrimination, regular consultation and cost-relatedness. 
Increased international cooperation between regulatory authorities is therefore a sensible was 
of gradually reaching more consistency between different jurisdictions. However, this would 
not efficiently address distortions of competition from heavily-financed States like the US or 
Japan. 

AEA  argued  that  Member  States  should  finance  an  increased  share  of  security  costs.  AEA 
strongly  supported  obligatory  transparency  of  security  costs.  This  would  provide  the 
necessary tools to measure the efficiency and the performance of the security services charges 
by airports to airlines. 

AEA also estimates that 30% to 50% of the security costs are induced by EU legislation. In 
2007,  the  average  estimated  cost  per  passenger  for  security  measures  carried  directly  by 
airlines  was  around  2.50€,  while  at  airports  not  applying  "one-stop"  security  the  average 
security costs is approximately 8.50€. Mandatory  "one-stop" security would decrease security 
costs and eliminate redundant security measures. 20% of transfer passengers in some Member 
States are today re-screened when arriving from another Member State. 

However, there is no transparency in Member  States  about  which  measures  are  imposed  by 
EU requirements and which are imposed by more stringent measures. AEA also pointed out 
there is no clear and common definition of what constitutes a more stringent measure. AEA 
supported  argued  that  Member  States  should  not  impose  additional  stringent  measures  and 
should  finance  existing  more  stringent  measures.  AEA  also  suggested  that  Member  States 
communicate to the Commission measures that are applied inn addition to EU requirements. 

EN 

37 

   EN 

In  addition,  the  Commission  should  provide  a  thorough  impact  and  costs  analysis  before 
proposing new security measures. 

ELFAA  highlighted  the  way  aviation  security  is  financed  in  the  EU  puts  aviation  at  a 
disadvantage  compared  to  other  transport  modes.  Security  is  the  responsibility  of  the  State 
and should therefore not be financed by the industry according to the "user pays" principle. 
The consequence is that Member States have little incentive to remove any redundant security 
measures because they have no responsibility for meeting the costs. ELFAA also argues that 
aviation security causes considerably inconvenience for the travelling public. 

FARE  argued  as  well  that  financing  aviation  security  is  a  State  responsibility.  The  cost  of 
aviation  security  per  passenger  is  also  higher  at  smaller  airports  than  at  larger  airports. 
Furthermore,  Member  States  should  demonstrate  that  more  stringent  measures  are  justified 
and  proportionate.  The  "user-pays"  principle  puts  European  airports  in  an  increasingly 
disadvantaged position compared to airports in the US with the entering into force of the EU-
US Open Skies agreement. 

IACA  argued  that  States  should  finance  aviation  security  because  terrorism  targets 
governments  and  not  airlines.  European  airlines  are  disadvantage  compared  to  its  global 
competitors because of the application of the "user-pays" principle in Europe. IACA supports 
mandatory  "one-stop"  security  and  increased  transparency  of  security  costs.  IACA  also 
questions why airlines should collect the revenues from the security charges from passengers. 

ERA stated that States have the responsibility for the protection of citizens in the air and on 
the ground and should therefore finance aviation security. 

EEA argued as well that financing aviation security is a State responsibility. More stringent 
measures  should  therefore  be  financed  by  Member  States.  Differences  in  financing  aviation 
security globally affect negatively the EU.  

CLECAT  requested  increased  level  of  state  financing  and  a  more  harmonised  approach  to 
aviation security to decrease the burden on the industry. CLECAT argued that transparency of 
security costs is necessary to avoid overcharging and discrimination. The only effect way to 
address this effectively is through EU action. A Directive on transparency would not address 
the disadvantages EU operators face in comparison with operators based in states with a high 
level of public financing. 

ESC explained that the costs for security screening of cargo have increased significantly over 
the last years. ESC therefore in its reply focused on the lack of transparency of security costs 
and  charges  paid  by  the  cargo  shippers.  However,  transparency  should  extend  to  cargo 
shippers and not only to airlines. Cargo shippers can today not verify whether the security fee 
levied on cargo shippers by airlines corresponds to the actual costs. 

ESC  argued  that  administrative  burden  and  costs  for  companies  need  to  be  addressed  when 
new  security  regulations  are  being  introduced.  The  costs  for  measures  protecting  the  state 
should be at the very least shared with the state. ESC also supported more harmonisation of 
principles  for  financing  aviation  security  within  ICAO.  However,  ESC  emphasised  that  the 
EU  institutions  are  more  efficient  in  ensuring  adherence  to  the  principles  of  transparency, 
consultation and cost-relatedness. 

Peel  Airports  Group  highlighted  that  aviation  security  represent  a  significant  part  of  the 
airport costs and that these cost are expected to continue to grow. More stringent measures put 

EN 

38 

   EN 

financial pressure on smaller regional airports. The cost for security per passenger is already 
high  at  smaller  airports  compared  to  larger  airports.  Peel  Airports  Group  also  claimed  that 
competition  between  regional  airports  is  distorted  through  differences  in  the  level  of  public 
funding in the EU. Peel Airports Group pointed out that long-term contracts between airlines 
and  airports  have  become  increasingly  common  with  the  advent  of  low-cost  airlines.  These 
contracts also set security fees at a fixed and often low level while security costs may change 
over time; particularly if more stringent measures are introduced. 

EN 

39 

   EN 

ANNEX III 

EU airlines (first half 2007) 

Number of airlines 

Number of employed persons 

13 

14 

7 

10 

48 

6 

8 

20 

45 

34 

37 

6 

6 

7 

4 

8 

4 

12 

20 

10 

14 

5 

3 

40 

4005 

1493 

5487 

3242 

57761 

576 

7038 

8281 

34864 

78375 

16531 

2021 

1144 

834 

3690 

3124 

1883 

41124 

11081 

4540 

8251 

3438 

592 

   EN 

Belgium 

Bulgaria 

Czech Republic 

Denmark 

Germany 

Estonia 

Greece 

Spain 

France 

Ireland 

Italy 

Cyprus 

Latvia 

Lithuania 

Luxemburg 

Hungary 

Malta 

The Netherlands 

Austria 

Poland 

Portugal 

Romania 

Slovenia 

EN 

 
Slovakia 

Finland 

Sweden 

United Kingdom 

TOTAL 

5 

7 

30 

83 

466 

Source: Airclaims 

278 

10345 

2637 

83160 

420276 

EN 

41 

   EN 

ANNEX IV 

EU airports open for commercial traffic (2007) 

Number of airports 

Departing passengers 

5 

4 

4 

10 

38 

1 

39 

39 

65 

9 

43 

2 

2 

3 

1 

3 

1 

5 

6 

10 

10 

9 

1 

42 

10,429,410 

3,117,117 

6,548,515 

12,912,990 

93,976,756 

874,841 

15,305,163 

20,784,541 

103,808,025 

73,518,196 

67,388,733 

3,494,389 

1,581,409 

1,100,561 

822,328 

4,390,748 

1,485,616 

25,315,234 

11,802,865 

9,025,858 

13,430,040 

3,615,634 

752,292 

   EN 

Belgium 

Bulgaria 

Czech Republic 

Denmark 

Germany 

Estonia 

Greece 

Spain 

France 

Ireland 

Italy 

Cyprus 

Latvia 

Lithuania 

Luxemburg 

Hungary 

Malta 

The Netherlands 

Austria 

Poland 

Portugal 

Romania 

Slovenia 

EN 

 
Slovakia 

Finland 

Sweden 

United Kingdom 

TOTAL 

6 

26 

30 

59 

431 

Source: Eurostat 

1,205,653 

8,701,088 

16,608,182 

119,576,453 

631,572,637 

EN 

43 

   EN 

ANNEX V 

Glossary 

Government 

International Civil Aviation Organization (ICAO) 

European Aviation Safety Organisation (EASA) 

EUROCONTROL 

Stakeholders 

PostEurop 

European Regions Airline Association (ERA) 

International Air Transport Association (IATA) 

International Airline Association (IACA) 

European Transport Workers' Federation (ETF) 

Freight Forward International (FFI) 

European Travel Retail Council (ETRC) 

European Shippers Council (ESC) 

European Cockpit Association (ECA) 

European Consumer Centre Network (ECC-Net) 

Bureau Européen des Unions des Consommateurs (BEUC) 

Forum of European Regional Airports (FARE) 

European Business Aviation Association (EBAA) 

Airports Council International - Europe (ACI-Europe) 

European Low Fares Association (ELFAA) 

Association of European Airlines (AEA) 

European Express Association (EEA) 

European Association for Forwarding, Transport, Logistic and Customs Services (CLECAT) 

EN 

44 

   EN 

ANNEX VI 

Passenger Security and Service Charge 

Source: IATA 

EN 

45 

   EN 

 
ANNEX VII 

Comparison of Passenger Service and Security Charge 

100%

80%

60%

40%

20%

0%

Brussels

Sofia

Copenhagen
Prague

Frankfurt

Tallinn

Athens

Madrid

Paris

Dublin
Rome-FCO

Larnaca

Riga

Vilnius
Luxembourg

Budapest

Schiphol
Luqa

Vienna

Warsaw

Lisbon
Bucharest

Ljubljana

Bratislava

Helsinki
Stockholm

London

Airports

Passenger Service Charge

Security Charge

Source: IATA 

EN 

46 

   EN 

 
ANNEX VIII 

Main provisions of the 2009/12 Directive on airport charges 

Scope: 

•  The Directive applies to all airports with more than five million passengers (departing and 

arriving) per year. 

•  It also applies to the largest airport in every Member State 

•  The  Directive  covers  charges  levied  by  airports  to  cover  the  cost  for  landing,  take-off, 

processing of passengers and cargo. 

Consultation: 

•  Regular consultations between airlines and airports 

Non-discrimination: 

•  Airport charges shall not discriminate among airlines 

Transparency: 

•  Airports shall provide airlines with information on the cost for providing the services for 

which airport charges are levied. 

Appeal: 

•  Each Member State shall establish an independent supervisory authority 

•  This authority will assess complaints from airlines concerning airport charges. 

EN 

47 

   EN 

Main provisions of the Regulation (EC) No 300/2008 on Civil Aviation Security 

ANNEX IX 

Airport Security 

•  Staff Access Control (100 percent control of critical areas) 

Aircraft Security 

•  Searching and checking of aircraft 

•  Protection of parked aircraft 

Passengers and Cabin Baggage 

•  100 percent screening of all departing passengers and their cabin baggage 

•  Separation of arriving and departing passengers 

•  Facilitation for passengers already screened intra-EU 

Hold Baggage 

•  100 percent screening of hold baggage 

•  Protection of already screened hold baggage 

•  Reconciliation of hold baggage 

Cargo / Mail 

•  Various control requirements 

•  Rules for regulated agents /known shippers 

Security Equipment 

•  Technical performance parameters 

List of Prohibited Items 

•  Metallic items 

•  Liquids  

EN 

48 

   EN 

ANNEX X 

The largest EU airport groups 

Main 
Airport(s) 

Heathrow, 
Gatwick, 
Stansted 

Madrid, 
Barcelona, 
Mallorca 

Rank 2007 
(EU) 

Rank 2007 
(World) 

Rank 2006 
(World) 

Airport 

Member State 

4 

Ferrovial 

Spain 

Revenue 
($million) 

2007 Net result 
($million) 

2006 Net result ($ 
million) 

5309,7406 

698,976 

117,3273 

1 

2 

3 

4 

7 

1 

2 

3 

4 

5 

6 

7 

8 

9 

EN 

1 

2 

3 

7 

Aena 

Fraport 

Spain 

4103,0439 

0 

Germany 

Frankfurt 

3337,7478 

287,158 

-33,3613 

289,2813 

Aéroports 
Paris 

de 

France 

Charles de 
Gaulle, Orly 

3154,1978 

442,7765 

192,1595 

Schiphol Group 

The 
Netherlands 

Amsterdam 

1576,8237 

434,7961 

664,8549 

13 

13 

Flughafen 
München 

Germany 

Munich 

999,6 

49,749 

61,5 

15 

Luftfartsverket 

Sweden 

Arlanda, 
Gothenburg, 
Malmö 

932,5408 

-81,0194 

60,9752 

17 

Dublin  Airport 
Authority 

Ireland 

Dublin 

858,5021 

478,1739 

209,2426 

15 

16 

20 

18 

Manchester 
Airports Group 

UK 

Manchester, 
Nottingham, 
Bournemouth 

49 

795,7408 

162,4864 

128,746 

EN 

 
  
Rank 2007 
(EU) 

Rank 2007 
(World) 

Rank 2006 
(World) 

Airport 

Member State 

Revenue 
($million) 

2007 Net result 
($million) 

2006 Net result ($ 
million) 

Main 
Airport(s) 

Fiumicino, 
Ciampino 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

21 

23 

24 

31 

32 

33 

36 

42 

43 

45 

48 

54 

19 

27 

25 

32 

35 

30 

36 

45 

44 

48 

49 

56 

Aeroporti 
Roma 

di 

Italy 

765,8685 

24,6169 

Flughafen Wien 

Austria 

Vienna 

717,4465 

120,3312 

75,6951 

97,8371 

SEA  Aeroporti 
di Milano 

Italy 

Malpensa, 
Linate 

709,2955 

41,8285 

44,6601 

Flughafen 
Düsseldorf 

Athens 
International 

Copenhagen 
Airports 

Brussels  Airport 
Company 

Aeroportos  de 
Portugal 

Abertis 

Finavia 

Flughafen  Köln-
Bonn 

Flughafen 
Hamburg 

Germany 

Düsseldorf 

552,8515 

56,1382 

25,3578 

Greece 

Athens 

549,6868 

172,9553 

121,4906 

Denmark 

Copenhagen 

540,0799 

205,4431 

123,2179 

Belgium 

Brussels 

505,1064 

Portugal 

Lisbon, Faro 

413,703 

66,6187 

54,6405 

Spain 

Luton, Cardiff, 
Belfast 

412,7811 

Finland 

Helsinki 

399,2969 

43,2044 

27,775 

28,7641 

Germany 

Cologne 

378,1419 

7,5781 

6,333 

Germany 

Hamburg 

322,2513 

66,3202 

48,1585 

EN 

50 

EN 

 
  
 
 
 
Rank 2007 
(EU) 

Rank 2007 
(World) 

Rank 2006 
(World) 

Airport 

Member State 

Main 
Airport(s) 

Revenue 
($million) 

2007 Net result 
($million) 

2006 Net result ($ 
million) 

22 

23 

24 

25 

26 

27 

28 

29 

30 

31 

32 

55 

60 

63 

68 

72 

76 

79 

80 

86 

87 

92 

Flughafen 
Berlin-
Schönefeld 

Flughafen 
Stuttgart 

Germany 

Schönefeld, 
Tegel, 
Tempelhof 

321,0321 

22,9933 

5,6696 

Germany 

Stuttgart 

297,2024 

53,177 

Czech  Airports 
Authority 

Czech 
Republic 

Prague 

267,4151 

55,1581 

43,4245 

Polish  Airports 
State Enterprise 

Budapest-
Ferihegy Airport 

Birmingham 
Airport Holdings 

Aéroports  de  la 
Côte d'Azur 

Hannover-
Langenhagen 

Lyon-Saint 
Exupéry 

SAVE 
Aeroporto 
Marco Polo 

Toulouse-

Poland 

Warsaw 

247,4722 

51,3325 

67,4746 

Hungary 

Budapest 

229,5063 

UK 

Birmingham 

221,1081 

46,0452 

22,9537 

France 

Nice 

188,13 

Germany 

Hannover 

188,1291 

10,5591 

France 

Lyon 

165,1124 

0,688 

0 

Italy 

Venice 

151,3531 

40,1774 

31,0653 

France 

Toulouse 

119,7065 

57 

59 

68 

50 

69 

73 

83 

78 

86 

88 

98 

EN 

51 

EN 

 
  
 
 
 
 
 
 
 
 
Rank 2007 
(EU) 

Rank 2007 
(World) 

Rank 2006 
(World) 

Airport 

Member State 

Main 
Airport(s) 

Revenue 
($million) 

2007 Net result 
($million) 

2006 Net result ($ 
million) 

Blagnac 
International 

33 

99 

101 

Peel Airports 

UK 

Liverpool, 
Doncaster, 
Durham, 
Sheffield 

105,4794 

3,0868 

-3,3774 

Source: Airline Business 

EN 

52 

EN 

 
  
ANNEX XI 

Main references 

•  Study on Civil Aviation Security Financing, September 2004, Irish Aviation Authority and 
aviasolutions; see http://ec.europa.eu/transport/air_portal/security/studies/index_en.htm 

•  Consultation  Paper  -  The  Financing  of  Aviation  Security:  An  Issue  for  Community 

Legislation? 

•  White  Paper  -  European  transport  policy  for  2010:  time  to  decide,  September  2001, 

European Commission 

•  KeepEurope  Moving  –  Sustainable  mobility  for  our  continent,  Mid-term  review  of  the 
Euroepan Commission's 2001 transport White Paper, June 2006, European Commission 

•  ICAO's Policies on Charges for Airports and Air Navigation Services, Doc 9082, seventh 

edition, 2004, International Civil Aviation Organization 

•  Airport Economics Manual, Doc 9562, second edition, 2006, International Civil Aviation 

Organization 

•  Airport and Air Navigation Manual, April 2008, International Air Transport Association 

•  JRC  Tenchical  Note  –  modelling  the  impact  of  modifying  airport  security  financing, 

December 2008, DG JRC 

•  First Look at Delays in October 2008, November 2008, Eurocontrol 

•  Air Passenger transport in Europe in 2007, August 2008, Eurostat 

•  IATA Fare Tracker, IATA, 2007. 

EN 

53 

   EN 

 
ANNEX XII 

JRC TECHNICAL NOTE 

MODELLING THE IMPACT OF MODIFYING AIRPORT SECURITY FINANCING 

EUROPEAN COMMISSION 

DIRECTORATE-GENERAL JRC 

JOINT RESEARCH CENTRE

Seville, 9 December 2008 

JRC TECHNICAL NOTE 

MODELLING THE IMPACT OF MODIFYING AIRPORT SECURITY FINANCING 

Final draft27 

This  note  summarises  the  results  of  the  simulations  carried  out  by  JRC/IPTS  with  the 
TRANSTOOLS, POLES and TREMOVE models in the context of the Impact Assessment of 
the  proposal  on  airport  security  financing  (COM/2008/xxx).  The  results  of  all  three  models 
suggest  that  the  increase  in  transparency  and  the  accompanying  decrease  in  user  costs  will 
have a positive economic while the environmental impact will be negligible. 

1. Background 

Airport security costs have increased significantly since 2001 as a result of tighter control and 
new regulations. Although raising the standards for security controls is arguably necessary for 
the  prevention  of  further  terrorist  attacks,  the  increase  in  costs  for  airports,  airlines  and 
travellers may result in an obstacle for economic activity and competition. 

In  addition,  the  application  of  security  regulations  is  not  harmonized  across  the  EU,  while 
there  is  limited  or  no  transparency  as  regards  the  repercussion  of  the  additional  costs  on 
stakeholders  and  users.  This  may  lead  to  situations  of  discrimination  among  users  and  can 
distort competition between airports and/or airlines. 

The  proposal  of  the  European  Commission  aims  to  remove  the  distortions  on  the  aviation 
market caused by aviation security measures. This is one of the actions requested by the mid-
term  review  of  the  Commission's  2001  White  Paper:  'Keep  Europe  moving;  Sustainable 
mobility for our continent'.28 The review asked for a level playing field to be stimulated where 
the cost of security measures is likely to distort competition and to examine the functioning 
and  costs  of  current  security  rules  in  air  transport.  The  Commission  should,  consequently, 
propose  adjustments  where  needed  to  avoid  distortion  of  competition.  Furthermore, 
consumers  should  have  certainty  that  revenues  from  security  charges  only  cover  security 
costs.  For  example,  if  an  airport  charges  a  security  charge,  the  airport  shall  only  be 

27 
28 

Contact persons at JRC: P. Christidis, E. Navajas Cawood 
COM(2006) 314 final of 22.6.2006 

EN 

54 

   EN 

 
 
 
 
                                                 
compensated for the costs. The 2001 White Paper: 'European transport policy for 2010: time 
to decide' already drew the attention to this right of the users of the transport system to have 
information on what they are being charged for.29 

The proposal considers four policy options: 

0. 

No regulatory action 

Obligatory transparency of security costs. This option also removes any re-screening 

1. 
of passengers arriving from another EU Member States. 

2. 
Obligatory  transparency  of  security  costs  coupled  with  a  requirement  that  revenues 
from security charges shall be used to exclusively to meet security costs. Airlines should also 
have the possibility to appeal security charges to a national supervisory authority. This option 
also removes any re-screening of passengers arriving from another EU Member States. 

An obligation on Member States to finance all aviation security measures. This option 

3. 
also removes any re-screening of passengers arriving from another EU Member States. 

2. Modelling approach followed 

Given the nature of the policy options, the aim of the simulation with the three models was to 
estimate the expected impacts on transport, economic activity and the environment under the 
assumption that the measures included in the proposal will lead to a decrease in costs for the 
final user, the traveller. The qualitative analysis of the impact assessment, based on research 
and input from the stakeholders, identified a reference value of cost reductions equal to 0.1% 
of the average ticket, or the equivalent of 0.26 € per trip.  

Sensitivity  tests  were  performed  with  all  three  models  used.  Their  demand  curves  are 
apparently  linear  for  changes  in  the  user  costs  between  0.05%  and  1%  and  it  can  be  thus 
considered that the resulting impacts are directly proportional to the level of change assumed. 
For example, if the real change in user costs is half of what is assumed in the simulations, the 
level of the impact forecasted by the models would be half of what corresponds to the change 
of 0.1%. 

Since  each  model  uses  a  different  modelling  approach,  providing  useful  details  in  different 
aspects, it was considered appropriate to apply all three models in this simulation. The main 
strength of each model can be summarised as follows: 

TRANSTOOLS: being a network model it can capture the impact on modal split. In addition, 
passenger transport demand has been calibrated and is modelled at NUTS 3 level. 
POLES: allows the analysis of the impacts at global, international level. 
TREMOVE: detailed externalities and welfare module  

The reaction of all three models to the policy "shock" was quite similar and their results were 
comparable. 

TRANSTOOLS 

29 

COM(2001) 370 final of 12.9.2001 

EN 

55 

   EN 

 
                                                 
TRANSTOOLS  version  1.7.4  was  used  for  this  Impact  Assessment,  the  latest  validated 
version  available.  Since  only  passenger  transport  is  expected  to  be  affected  directly  by  the 
measures, and because any secondary effects would be negligible given the limited first-order 
effects, a simplified setup of the model was applied, using only the assignment and passenger 
modules.  

Figure 1: Setup of TRANSTOOLS model 

The  policy  measure  was  simulating  by  introducing  two  changes  into  the  model's  input 
database: 

Network.mdb>AirLink table-> decrease of CostB, CostP and CostH by 0.26 euros 
Passenger_inputs.mdb>ChangeOfTransportationCosts  table  ->  mode  3,  all  countries,  change 
= -0.01 

Running the assignment module first allows the model to update the Origin-Destination costs 
matrices. The passenger model re-estimates demand based on the updated O-D matrices. The 
resulting matrices after both assignment and passenger demand can be compared to the ones 
from the "do nothing" case, their difference being the expected impact of the policy measure.  

The time horizon for the simulation was year 2012.  

POLES 

In POLES it was assumed that the policy measure would lead to a reduction of ticket prices 
by 0.1% by decreasing the part of the price that does not depend on operating expenses. As 
seen in figure 2, this change would affect the modelled demand directly and would lead to a 
new market equilibrium. 

POLES was run for the period 2010-2020. 

Figure 2: POLES-aviation model structure 

EN 

56 

   EN 

 
  
Expected 

Expected 

Capacity 

M k t

t h

Current and 

km and h flown 

Effective 

Fleet by 

Survival 
rates

Supplier 

Market 

GDP 

Current 

Technical 

Market 

Fleet use 

Operating 

Load 

Energy 

C t

Fuel 

Energy use 

Pollutant 

TREMOVE 

Version 2.7 of TREMOVE was used. Usage costs for air transport were reduced by 0.1% in 
private  (non-freight)  transport  by  plane,  a  category  that  involves  both  leisure  as  well  as 
business trips. This reduction of costs affects transport demand, which in turn will eventually 
contribute to the recalculation of generalized costs (user price, tax or subsidy and time cost) 
and this is used in further iterations to recalculate demand until a new equilibrium is reached 
by  the  model.  The  emissions  module  estimates  new  levels  of  GHG  caused  by  transport 
activity.  

More specifically, the demand module in TREMOVE stratifies transport demand according to 
the  purpose  of  the  trips,  effectively  implementing  a  differentiated  modal  choice  tree  for 
freight and passenger transport. For the latter, a further differentiation is introduced between 
work and private trips. The reason for this is that the purpose of transport affects the decision 
process concerning modal choice. In the current scenario, the reduction of flight ticket fare is 
applied to overall air passenger transport, including business trips and private traffic – even 
though  the  latter  accounted  for  the  90%  of  growth  in  demand  for  this  mode,  which  is 
consistent with the fact that the elasticities are slightly larger in the case of leisure trips.  

Finally,  the  welfare  module  calculates  the  difference  in  welfare  between  the  basecase  ("do-
nothing" scenario) and the simulated policy. This difference in social welfare is calculated as 
the sum of different components (change in utility of households, production costs, external 
effects and taxes or subsidies). 

Figure 3: TREMOVE structure 

EN 

57 

   EN 

 
 
TREMOVE does not represent explicitly vehicle-km by planes. Vehicle stock module is not 
thus affected by air transport - neither plane fleet is recalculated or estimated Furthermore, the 
TREMOVE plane volumes refer to the amount of flights starting in the considered country (so 
flights with departure outside Europe are ignored).  

Occupancy rates are fixed (0.7, derived from TRENDS), used to convert seat-km into pmk as 
well  as  emission  factors  per  pkm  per  distance  class  (all  derived  form  the  TRENDS 
AVIOPOLL database) 

EN 

58 

   EN 

 
 
3. Results 

The results of all three models coincide in the positive impact for air transport demand, the 
benefits for users and airlines and the limited environmental impact. 

3.1 Transport demand and activity 

The measure simulated (equivalent to a decrease of 0.1% or €0.26 per tick et) is expected to 
lead  to  an  increase  in  the  demand  for  air  trips  by  the  same  proportion  (0.1%)  according  to 
TRANSTOOLS  (the  only  model  of  the  three  that  estimates  trips).  Transport  activity, 
measured  in  passenger*kms,  is  expected  to  grow  by  a  lower  rate,  since  the  majority  of  the 
increase  in  demand  would  consist  of  shorter  distance  trips.  One  third  of  the  increase  in 
demand is expected to come from modal shift from (fast) rail, while the remaining two thirds 
would be a net increase in demand for air transport. 

The  results  of  TRANSTOOLS  also  imply  that  the  increase  in  air  transport  demand  would 
mainly come from non-business trips of distances lower than the average for air transport. The 
decrease  in  costs  as  a  result  of  the  policy  measure  simulated  is  a  very  small  share  of  ticket 
price  and  total  generalised  costs  and  as  a  result  would  affect  only  the  parts  of  the  transport 
market  most  sensitive  to  ticket  prices.  Modal  shift  from  rail  to  air  would  be  probable  in 
member states where rail has a significant share of long distance transport demand. 

The  transport  impacts  are  distributed  quite  evenly  among  the  EU-27  member  states,  with 
Finland,  France,  Germany,  Sweden  and  Romania  showing  an  expected  increase  in  air  trips 
higher than the average, while Cyprus and Malta are expected to have a very limited reaction. 

POLES and TREMOVE results until 2030 suggest that the relative impact of the measure on 
air transport activity would remain constant and in the order of 0.06-0.07% for intra-EU trips. 

Table 1: Summary of results on transport impact 

Policy test= reduction of average air ticket cost by 0.1%, EU27, year 2012 

baseline  policy test  difference 

change% 

air trips, intra-EU27 (million) 

air volume, intra EU-27 (billion pass*km) 

332.2 

332.5 

289.3 

289.5 

air volume, to/from rest of the world (billion pass*km) 

382.6 

382.7 

rail trips, intra-EU27 (million) 

1212.3 

1212.3 

rail volume, intra-EU27 (billion pass*km) 

239.9 

239.9 

source: TRANSTOOLS for EU-27, POLES for rest of the world 

0.3 

0.2 

0.1 

-0.1 

-0.1 

0.10% 

0.07% 

0.03% 

0.00% 

-0.02% 

Table 2: Comparison of model results, air transport activity (pass*kms), intra-EU27, year 2012 

EN 

59 

   EN 

 
 
 
 
 
 
 
 
 
 
Model 

TRANSTOOLS 

POLES 

TREMOVE 

Expected 
change due to 
policy measure 

0.069% 

0.074% 

0.063% 

Table 3: Transport impact at country level, year 2012, TRANSTOOLS results 

Austria 

Belgium 

Bulgaria 

Cyprus 

Trips 

Activity 
(pass*kms) 

0.074% 

0.058% 

0.087% 

0.073% 

0.096% 

0.198% 

0.028% 

-0.043% 

Czech Republic 

0.048% 

0.029% 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

0.098% 

0.118% 

0.097% 

-0.033% 

0.155% 

0.150% 

0.155% 

0.140% 

0.131% 

0.101% 

0.071% 

0.021% 

0.080% 

0.077% 

0.062% 

0.038% 

0.097% 

0.075% 

0.082% 

0.084% 

Lithuania 

0.059% 

0.036% 

Luxembourg 

0.056% 

0.015% 

Malta 

0.002% 

-0.008% 

Netherlands 

0.074% 

0.052% 

EN 

60 

   EN 

 
 
 
Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

0.091% 

0.084% 

0.073% 

0.044% 

0.102% 

-0.020% 

0.080% 

0.041% 

0.064% 

0.083% 

0.067% 

0.036% 

0.112% 

0.116% 

United Kingdom 

0.086% 

0.045% 

EN 

61 

   EN 

 
 
Table 4: Impact on air transport activity, international trips, POLES results, change in pass*kms 

2012 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

0.0738%  0.0576%  0.0645%  0.0636%  0.0648%  0.0648%  0.0652%  0.0661%  0.0664% 

0.0465%  0.0498%  0.0497%  0.0506%  0.0506%  0.0505%  0.0506%  0.0510%  0.0509% 

0.0398%  0.0462%  0.0450%  0.0466%  0.0463%  0.0472%  0.0477%  0.0467%  0.0460% 

0.0319%  0.0381%  0.0372%  0.0378%  0.0378%  0.0376%  0.0376%  0.0336%  0.0347% 

0.0307%  0.0296%  0.0304%  0.0304%  0.0305%  0.0305%  0.0306%  0.0308%  0.0308% 

0.0271%  0.0337%  0.0285%  0.0305%  0.0299%  0.0300%  0.0300%  0.0303%  0.0302% 

0.0224%  0.0304%  0.0289%  0.0300%  0.0296%  0.0295%  0.0293%  0.0295%  0.0294% 

0.0220%  0.0318%  0.0301%  0.0273%  0.0251%  0.0256%  0.0253%  0.0259%  0.0258% 

0.0216%  0.0297%  0.0279%  0.0293%  0.0294%  0.0293%  0.0293%  0.0297%  0.0296% 

0.0206%  0.0289%  0.0270%  0.0280%  0.0280%  0.0280%  0.0280%  0.0283%  0.0283% 

0.0195%  0.0302%  0.0287%  0.0297%  0.0297%  0.0295%  0.0296%  0.0300%  0.0268% 

0.0193%  0.0322%  0.0268%  0.0297%  0.0285%  0.0285%  0.0281%  0.0289%  0.0286% 

Intra-EU27 

To/from  

Middle 
East 

To/from 
Russia  and 
former 
USSR 

To/from 
Africa 

To/from 
North 
America 

To/from 
South 
America 

To/from 
South-East 
Asia 

To/from 
Central 
America 

To/from 
South-
West Asia 

To/from 
North-East 
Asia 

To/from 
Oceania 

To/from 
China 

Table 5: Long term impact on transport activity, TREMOVE results, EU-27 

2012 

2015 

2020 

2025 

2030 

EN 

62 

   EN 

 
 
 
 
 
Impact on air 
transport activity 
(change in 
pass*kms) 

0.063% 

0.063% 

0.064% 

0.064% 

0.064% 

EN 

63 

   EN 

 
 
3.2 Economic impacts 

The results of TRANSTOOLS and TREMOVE coincide in that they expect visible economic 
impacts from the reduction of security costs. 

Table 6: Economic impacts, TRANSTOOLS and TREMOVE, reference year 2012 

economic impact 

Difference (€ 
million/year) 

Increase in consumer surplus (travellers), TRANSTOOLS

86.4 

Increase in airline income, TRANSTOOLS 

Increase in labour welfare, TREMOVE 

Increase in utility of households, TREMOVE 

Decrease in production costs, TREMOVE 

Decrease in cost of public funds, TREMOVE 

61.6 

83.7 

55.4 

35.8 

3.5 

Using  the  results  of  TRANSTOOLS  on  the  impacts  on  transport  demand  allows  the 
estimation  of  welfare  gains  based  on  figure  4.  The  demand  curve  for  air  transport  can  be 
considered as linear for the part affected by the change introduced by the policy measure (and 
in fact is considered as linear by all models). Consumer surplus would correspond to the area 
of the trapezoid P0E0E1P1 and would in practice represent a transfer of welfare from security 
providers to travellers plus an increase in the welfare of travellers due to increased mobility. 
Airlines would benefit from the increased transport demand and increase their income by the 
equivalent to the area of rectangle formed by T0, T1 and E1. 

Figure 4: Estimation of welfare gains in TRANSTOOLS 

Price 

P0 

P1 

E0 

Demand 
curve

E1 

T0 

T1 

Trips 

EN 

64 

   EN 

 
 
 
 
 
TREMOVE is based on the same principles for the calculation of welfare gains (figure 5). 

The  total  utility  or  willingness  to  pay  given  the  equilibrium  is  given  by  the  area  under  the 
demand curve limited by 0xSA. The total cost to society is given by the area under the supply 
curve.  This  is  the  area  limited  by  0xSB.  The  shaded  area  BSA  indicates  the  gain  in  social 
welfare. The gain in social welfare can be attributed to consumers, the consumer surplus and 
the producer surplus. The price is determined as the crossing between the supply and demand 
curves. A majority of consumers is nevertheless willing to pay more than the actual price on 
the market as can be seen on the demand curve. Thanks to this phenomenon, consumers (and 
society) get a utility, they have not to pay for, the producer surplus (PS). The story is similar 
for the producers. A majority of suppliers  supply goods at a cost lower than  the price.  This 
procures  suppliers  (and  society)  an  extra  profit,  the  producer  surplus  (PS).  The  sum  of 
producer and consumer surplus is the social welfare for this simple case. 

Figure 5: Estimation of welfare gains in TREMOVE 

A 

B 

EN 

65 

   EN 

 
 
3.3. Environmental impacts 

The direct impact of the measure simulated is an expected increase in air transport activity. As 
a  result,  the  level  of  emissions  from  air  transport  is  expected  to  increase  proportionally, 
without however reaching important volumes in either absolute or relative terms. 

The expected increase in air transport activity as simulated by TRANSTOOLS was combined 
with  the  emission  factors  of  TREMOVE.  Table  7  summarises  the  expected  increase  per 
emission type and fuel consumption. The external cost of these environmental impacts would 
be negligible though, totalling less than 1 million euro per year. 

Table 7: Environmental impacts 

Difference  

CH4 emissions (tons) 

CO emissions (tons) 

CO2 emissions (tons) 

Fuel consumption (toe) 

NMVOC emissions (tons) 

NOx emissions (tons) 

PM emissions (tons) 

SO2 emissions (tons) 

VOC emissions (tons) 

TOFP30 emissions (tons) 

16.3 

7.2 

4005.0 

793.4 

11.0 

18.1 

2.8 

39.0 

27.3 

34.1 

30 

Tropospheric Ozone Formation Potential 

EN 

66 

   EN 

 
 
 
 
 
                                                 
4. Conclusions 

The  simulation  of  the  measures  to  increase  the  transparency  of  airport  security  financing 
assumed a very limited decrease in ticket prices equivalent to 0.1% of the average price. The 
three  models  used  in  this  assessment  estimate  that  for  that  order  of  magnitude  of  change  in 
prices, an increase in air transport demand of a similar magnitude can be expected. 

Under  the  hypothesis  that  such  small  changes  in  costs  do  affect  user  behaviour  as  theory 
suggest, the results imply that air transport demand would marginally increase as a result of 
the measure, by 0.1% in terms of trips and 0.07% in terms of transport activity. The increase 
in demand would affect mainly shorter distances (500-1000 km) and non-business trips. The 
distribution of effects is expected to be quite uniform among EU-27 member states. 

For such a level of increase in demand, airline income is expected to increase by €60 million 
per  year.  Regardless  of  the  level  of  change  in  air  transport  activity,  the  reduction  of  airport 
security costs would lead to savings by travellers in the order of €80 million per year. As a 
result, household utility would increase and production costs would decrease.  

The  environmental  impacts  of  the  expected  limited  increase  in  air  transport  activity  can  be 
considered negligible in terms of both external impact and external cost. 

As  a  whole,  the  policy  measure  simulated  is  expected  to  have  a  positive  impact  on  the  EU 
economy  as  a  whole,  mainly  by  removing  distortions  that  may  affect  competition  between 
modes, airports and airlines. 

EN 

67 

   EN 

 
Annex 1: TRANSTOOLS model short description 

The Trans-Tools Model is a network-based transport model of Europe started from the ideas 
consolidated in the modelling experience of the consortium partners. This means that some of 
the features of the currently available EU models are added, considering that the selection of 
the  features  of  the  model  address  the  essential  policy  needs  by  the  Commission  services. 
While ASTRA and VACLAV transport models are used as basis for the development of the 
passenger demand model, freight modelling is based on the NEAC model for trade and mode 
choice and SLAM for logistics. 

All model components are integrated into ArcGIS which allow the user to edit, operate and 
illustrate results from the same common GIS-based platform. The innovations obtained from 
the Trans-Tools Model are, 

New set up of a demand/supply model that is IPR free for the Commission. 

Intermodality  for  passenger/freight  as  this  is  part  of  the  national  and  European  transport 
policy to promote intermodality through different measures. 

Full  coverage  of  Central  and  Eastern  Europe  (accession  countries  and  the  countries  at  the 
borders of the enlarged Union). 

Integration of New Member States at a similar level as the EU15. 

Feedback infrastructure development-economy. 

Logistics/freight chain explicitly included.  

Coupling with local traffic in order to address the effect of road congestion. 

A  software  approach  which  results  in  a  modelling  tool  on  network  level  and  GIS  based 
interfacing. 

Model structure 

The  Trans-Tools  Model  is  similar  to  a  traditional  four  step  model  including  freight  and 
passenger modelling. The main sub-models are: 

Freight demand model 

Passenger demand model 

Assignment model 

In addition to these main elements of the model system, the Trans-Tools Model also includes 
an economic model based on CGEurope and impact models. The different models are linked 
applying  a  number  of  conversion  routines.  The  principle  of  the  model  in  overview  is 
illustrated  in  Figure  1.  The  model  framework  allows  feedbacks  between  the  sub-models  to 
achieve equilibrium between supply and demand. 

EN 

68 

   EN 

 
Freigt Model

Trade 
Mode Choice
Logistics

Economic model

Conversions

Passenger Model

Generation
Distribution
Mode Choice

Conversions

Assignment

Conversions

Impact Models

Figure 1: 

The principles of the Trans-Tools Model in overview 

Freight demand models 

A  generation  and  attraction  pattern  of  the  trade  flows  in  the  chosen  basis  year  is  a  starting 
point for building a trade model in general. Specifically for the Trans-Tools trade model, the 
ETIS  O/D  freight  transport  matrix  will  be  used  as  an  analog  substituting  the  trade  relations 
matrix.  The  ETIS  matrix  describes  the  generation  and  attraction  of  physical  flows  of  goods 
between  the  trading  countries  and  geo-clusters  given  the  economical  and  institutional 
determinants  of  the  year  2000.  For  the  relations  with  the  trading  partner  from  beyond  the 
established  European  area  the  economical  mass  of  the  partner  is  the  decisive  factor.  The 
output  of  the  Trans-Tools  trade  model  is  a  forecast  O/D  matrix  for  freight  including  origin 
region,  between  transhipments  and  destination  region  as  well  as  transport  mode  at  origin, 
between transhipments, and at destination, commodity group and tonnes. 

The Trans-Tools modal split model for freight transport is based on the modal split model in 
NEAC. In Trans-Tools the modal split model adjusts the stable modal split resulting from the 
trade model. Output of the Trans-Tools modal split model is a freight matrix, which consists 
of a forecast O/D matrix including forecast modal split. In the modal split model the market 
shares of the different modes of transport are estimated for every O/D relation and commodity 
group.  Within  the  model  there  are  four  modes  of  transport  available  (road,  rail,  inland 
waterway, sea). Choice probabilities of the available modes per commodity group for every 
O/D relation are determined by using a multinomial logit model. 

The  Trans-Tools  logistic  module  is  based  on  SLAM,  which  is  a  module  appended  to  the 
SCENES  model.  This  module  makes  it  possible  to  evaluate  the  impacts  of  changes  in  the 
logistic and transport systems within Europe on the spatial patterns of freight transport flows, 
through changes in the number and location of warehouses for the distribution of goods. The 
logistic module produces output that is to be used in the assignment model as well as in the 
economic model. For the assignment model the logistic module produces unimodal transport 
matrices (Origin, destination, mode, tonnes, vehicles). The economic model needs generalized 
and monetary costs per origin, destination and commodity type. These costs can be computed 

EN 

69 

   EN 

 
 
from the assigning process. The monetary costs (payment to the public budget e.g. toll, fuel 
taxes) can be separated out if input on these costs is available. 

Passenger demand model 

The passenger demand model tackles passenger transport modelling at European level, with 
main focus on the (transport) models SCENES, VACLAV and ASTRA. The passenger model 
covers  the  first  three  steps  of  the  classic  four-step-approach,  which  are  trip  generation,  trip 
distribution and modal split. The trip distribution process in ASTRA depends on results of the 
modal  split  stage.  Hence  a  feedback  mechanism  from  VACLAV  to  the  trip  distribution 
module is prepared to transfer average generalised times to the trip distribution logit function. 
Trip  generation  as  the  first  stage  of  the  classical  four-step  transport  modeling  approach  is 
implemented  in  ASTRA.  After  the  generation  of  trips  emanating  from  European  NUTS3 
zones  these  trips  are  distributed  among  destinations.  The  spatial  trip  distribution  is 
represented by the second stage of the IWW transport modeling approach. In this process the 
vector containing generated trips is transferred into an O/D matrix. In the third step the mode 
for  the  travel  is  chosen.  Hence  impedance  data  from  the  Trans-Tools  assignment  model  as 
well as O/D matrices per trip purpose from the ETIS database are applied. Travel costs, travel 
time and information about the trip itself like frequencies and number of transfers are used to 
split  the  trips  between  the  modes.  Subsequently,  for  each  origin-destination  pair  the  modal 
split model calculates the probability of selecting a modal alternative out of a set of available 
modes.  A  non-linear  logit  function  is  used  in  order  to  calculate  the  choice  probability.  The 
explanatory  variables  represent  the  transport  service  level  between  two  zones  e.g.  in  the 
dimensions  travel  costs  and  travel  time.  Output  of  Trans-Tools  passenger  demand  model  to 
assignment model are unimodal passenger O/D transport matrices at NUTS3 level in number 
of passengers per mode (rail, road, air) and trip purpose as well as unimodal passenger O/D 
transport matrices at NUTS3 level in number of vehicles for road relations per trip purpose. 
The level of service-matrix with generalised costs per O/D relation represents the output from 
Trans-Tools passenger demand model to the economic model. 

Assignment models 

The  network  assignment  module  produces  the  direct  output  from  the  Trans-Tools  Model. 
However, the models also generate level-of-service data (LOS) as input to passenger, freight, 
and  logistic  models  in  a  feed  back  loop  (see  Figure  2).  Input  from  the  passenger  model  are 
unimodal passenger O/D matrices at NUTS 3 level in number of passengers and vehicles by 
mode  and  trip  purpose.  Input  from  the  freight  and  logistic  models  are  unimodal  transport 
matrices  at  NUTS  2  level  by  mode,  commodity,  tonnes,  and  vehicles.  In  the  Trans-Tools 
Model,  transport  networks  are  defined  at  unimodal  level.  Following  assignment  models  are 
developed within the Trans-Tools Model: 

Road network (passenger and freight) 

Rail network (passenger and freight) 

Inland waterway (freight) 

Air network (passenger). 

Passengers by rail and air and freight by rail and inland waterways are assigned based on an 
average day, since congestion is not considered and information on service data differentiated 

EN 

70 

   EN 

 
by time and day is not available. LOS in the road assignment is calculated by time period. In 
Trans-Tools,  a  stochastic  assignment  procedure  is  applied  being  founded  on  probit-based 
models. Before assignment trip matrices are converted into the NUTS 3 based zonal system of 
1,269 zones within Europe used in Trans-Tools Model.  

Economic model 

The future developments by NSTR related sector of the economy of each region of the EU are 
the outcome of the Trans-Tools economic model CGEurope. Sectoral developments, thus the 
effects of each policy scenario, are predicted by the model in monetary terms. The computed 
relative changes of economy by sector with respect to the baseline scenario are passed on to 
the NEAC model. Policy evaluation measures, in particular real GDP impacts and equivalent 
variation,  by  region,  year  and  scenario  are  further  outputs  of  the  Trans-Tools  economic 
model. 

Impact models 

The impacts models are used to calculate energy consumption, emissions, external costs and 
safety based on output from the assignment model as illustrated below. 

USER ARCGIS: 

Scenario

Assignment Model 

Traffic volumes 

Exogenous Data 

(TREMOVE): 

Energy consumption 

Environmental 

Emissions 

Transport 

Safety impact 

Fatality

Figure 2: 

Impact Model within Trans-Tools Model 

Additional information on TRANSTOOLS can be found at:  

http://energy.jrc.ec.europa.eu/transtools/ 

EN 

71 

   EN 

 
 
 
Annex 2: POLES model short description 

Model overview 

The  IPTS  Air  Transport  Model  is  an  extension  of  the  POLES  model  covering  the  aviation 
sector. Its aim is to project the global energy use and the corresponding emissions from the 
civil air transport sector during the period 2000-2050. 

The  model  is  fed  with  an  extensive  database  built  mainly  from  IATA’s  statistics,  and 
complemented  with  other  data  from  NASA,  EUROCONTROL,  Airbus  and  Boeing.  The 
information has been structured in a way fully compatible with POLES. To this purpose, the 
world is  divided into  47  regions,  according to the geographical breakdown  used  in  POLES. 
These  regions  are  grouped  into  twelve  macro-regions.  The  model  considers  78  regional 
markets defined as pairs of macro-regions. 

The  model  is  made  up  of  four  interconnected  modules,  as  it  is  shown  in  Figure  1.  Each  of 
these parts deals with a specific problem, namely: 

Capacity planning 
Cost calculation 
Market clearing 
Energy use and emissions 

Taking  into  account  the  different  propulsion  systems,  sizes,  and  uses,  the  current  aircraft 
models  have  been  classified  into  ten  groups  of  airplanes.  In  the  capacity  planning  module, 
current  fleet  volumes  and  expected  changes  in  transport  supply  are  used  to  determine  the 
requirements  of  new  aircrafts  for  each  region  in  the  following  simulation  period.  Expected 
supplies  are  obtained  by  linear  regression  from  the  past  transport  supplies.  By  means  of  a 
vintage  model,  which  considers  the  past  additions  to  the  fleet  and  the  survival  rate  of  each 
aircraft group, the model establishes the amount of aircrafts still in service from each vintage. 
The  current  fleet  by  region  is  then  calculated  from  the  balance  between  added,  retired  and 
remaining aircrafts. 

The  cost  calculation  module  takes  fuel  prices  and  fleet  use  in  each  of  the  regions,  with  the 
technical  characteristics  of  the  aircrafts,  in  order  to  determine  the  operating  costs  of  each 
aircraft class. Fleet use is obtained as a function of fleet volume, transport supply and average 
load factor. 

The market match module computes the amount of air transport supplied by each country in 
each market. Transport supply curves by country and aircraft in each market are defined as a 
function of aircraft operating costs and transport capacity constraints within the market. Air 
transport  capacity  constraints  are  determined  as  a  certain  combination  of  aircraft  fleet,  use, 
range,  and  carrying  capacity.  Transport  supply  curves  are  added  in  order  to  estimate  the 
aggregated transport supply curve of each market. The intersection between transport demand 
and aggregated supply produces the market equilibrium price. Transport supplies are given by 
the intersection between the market equilibrium price and the corresponding transport supply 
curves  by  country  and  aircraft.  Transport  demand  has  been  represented  using  the  so-called 
gravity modelling approach. Transport demand in each market depends on GDP and transport 
price. 

EN 

72 

   EN 

 
 
Finally, the module devoted to energy use and emissions takes fleet use and aircraft technical 
features in order to estimate the energy consumption in each of the regions. Based on energy 
demand  and  through  the  use  of  emission  indexes  for  six  gases,  this  module  is  also  able  to 
calculate the corresponding pollutant emissions. 

Expected 

Expected 

Capacity 

M k t

t h

Current and 

km and h flown 

Effective 

Fleet by 

Survival 
rates

Supplier 

Market 

GDP 

Current 

Technical 

Market 

Fleet use 

Operating 

Load 

Energy 

C t

Fuel 

Energy use 

Pollutant 

Figure 1: model diagram 

Model database 

Most of the information required by the model has been obtained from IATA (2004). IATA 
currently  represents  over  270  airlines  in  144  countries,  comprising  95%  of  international 
scheduled  air  traffic,  and  86.6%  of  the  total  world  revenue  passenger-kilometres  flown  in 
2002. 

This  information  has  been  reorganised  in  order  to  be  able  to  distinguish  between  passenger 
and freight traffic. All-cargo flights have been subtracted from scheduled services figures, and 
the  remaining  scheduled  services  have  been  aggregated  to  charter  services.  Finally,  airline 
figures  have  been  aggregated  depending  on  their  flag  and  according  to  the  geographical 
coverage used by POLES. 

IATA  provides  detailed  fleet  and  utilization  data  for  each  member  airline.  Disregarding  the 
model  variants,  there  are  135  different  aircraft  models  currently  in  use.  These  models  have 
been classified into ten groups of airplanes according to purpose, propulsion and size criteria.  

According  to  their  use,  airplanes  can  be  split  into  passenger  (able  to  carry  passengers  and 
cargo) or freighters aircrafts (only suitable for cargo). With respect to propulsion, aircrafts can 
be equipped with engine jets (either supersonic or subsonic) or turbo propellers. 

Regarding size or carrying capacity, aircrafts can be grouped into jumbo jets (with more than 

EN 

73 

   EN 

 
 
400  seats),  wide-body  jets  (two  aisle,  between  240  and  400  seats),  narrow-body  jets  (single 
aisle, between 90 and 240 seats), regional jets (below 90 seats), supersonic jets (narrow-body 
like), regional turboprops (between 20 and 90 seats), and small propellers (up to 20 seats). 

Passenger jets are split into five size categories (supersonic, jumbo, wide body, narrow body, 
and  regional  jets),  while  turboprops  are  divided  into  two  classes  (regional  and  small). 
Freighter jets are divided into three size categories (jumbo, wide body and narrow body jets).  

IATA  members’  fleet  by  the  end  of  2002  was  made  up  of  11338  aircraft,  of  which  10455 
were jets. Airbus (2003) reported a global fleet consisting of 10789 aircraft with at least 100 
seats by the end of 2002. According to Boeing (2003a), world fleet was comprised of 15600 
airplanes (i.e. 30% higher than IATA) of which 11800 were jets. 

When  possible,  most  aircraft  technical  specifications  have  been  obtained  directly  from 
manufacturers. Energy use and emission indexes have been obtained from publicly available 
sources  (Kalidova  et  al.  (1997),  and  Sutkus  et  al.  (2001),  and  (2003)).  In  some  cases,  for 
Russian aircrafts and old aircraft models, specifications are taken from similar aircrafts. 

Model equations 

The world has been split into a number of regions with the aim of describing appropriately the 
most significant traffic flows between and within those regions. To this purpose, the regional 
markets used in the model are defined as all the possible pairs of macro-regions listed in the 
following  table,  disregarding  the  direction  of  the  traffic31.  Thus,  the  model  considers  78 
regional  markets  (combinations  of  two  macro-regions  such  as  NOANOA  or  NOAEUR),  of 
which 12 are intraregional. 

Table 1: Macro-regions 

Macro-region 

POLES Countries 

North America (NOA) 
Central America (CEA) 
South America (SOA) 

Europe (EUR) 

CAN, USA 
MEX, RCAM 
BRA, RSAM 
Europe (first column in Error! Reference source not 
found.) 

Independent  States 

Commonwealth  of 
(CIS) 
Africa (AFR) 
Middle East (MEA) 
China (CHI) 
North East Asia (NEA) 
South East Asia (SEA) 
Oceania (OCE) 
South West Asia (SWA) 

RUS, UKR, and RFSU 

NOAN, NOAP, SSAF 
EGY, MEME, GOLF 
CHN 
COR, JPN 
RSEA 
RJAN 
NDE, RSAS,  

The  functional  form  assumed  to  represent  air  transport  demand  is  based  on  the  gravity 
modelling approach explained by Verleger (1972). Under this hypothesis, transport demand in 
year t, Dt, is expressed as the product of a series of factors that may influence the demand (α, 
β…),  modified  by  a  set  of  elasticities  (a,  b…),  and  a  constant  K  representing  other 
unaccounted factors: 

31 

I.e. the market North-America/Europe includes all the traffic from North-America to Europe and vice 
versa. 

EN 

74 

   EN 

 
                                                 
(1) 

a
z
D K α β ω
⋅
t
t

⋅K

=

b
t

⋅

t

In this model air transport demand is assumed to be driven by the market price and the GDP. 
The  corresponding  elasticities  have  been  taken  from  Eurocontrol  (2005),  historical  demand 
time series from Boeing (2003b), and Schafer et al. (2000), and GDP and population figures 
from the POLES database. 

An important variable used in the following sections is the share of a given country in each of 
the  passenger  transport  markets.  This  is  defined  from  the  country’s  share  in  total  global 
demand, which is defined as the ratio of the total national transport supplies to each market, to 
the market size. 

The initial values of country’s share in total global demand have been obtained combining the 
information  provided  by  IATA  (2004)  and  Schafer  et  al.  (2000).  The  demand  of  a  given 
country in each market is obtained by multiplying the market size by the national share in the 
market. These national demands are used later to compute the average fuel costs within each 
market. The equivalent variables for freight traffic are obtained in a similar way. 

Total  transport  capacities  available  in  each  country  are  given  by  the  combination  of  the 
carrying capacity (the number of seats per aircraft and the number of tons that can be carried 
in the holds), the average aircraft range (expressed in km per flight or departure) and the use, 
represented by the number of departures carried out in one year. 

The number of departures gives a notion of the airport and air traffic management capacity. It 
is assumed that departures in a given country grow as the demand in the markets where this 
country  operates,  using  the  national  shares  in  each  market  demand,  and  therefore  traffic 
congestion is not considered in the model. 

Air transport capacities are allocated to the markets according to the national shares in each 
market demand. 

Transport supply 

National transport supply curves in each of the markets, by aircraft type, are assumed to be 
shaped  as  the  integral  of  normal  distributions.  According  to  this  specification,  individual 
supply curves indicate the “willingness  to offer”  of  an economic agent  operating in a given 
market. The average of each normal (i.e. the inflection point of the supply curve) corresponds 
to the average operating expenses (which include the remuneration of all production factors), 
while the standard deviations have been calibrated to fit the market  price data. Each supply 
curve  is  rescaled  by  the  transport  capacity  in  the  market  (the  asymptote  of  the  curve).  It  is 
assumed that only the countries belonging to a given market can supply to it (thus NOANOA 
market is supplied only by USA and CAN). 

The  transport  supply  curve  in  a  given  market  is  calculated  by  the  aggregation  of  individual 
supply  curves  by  country  and  aircraft.  The  intersection  of  the  market  supply  curve  and  the 
market  demand  determines  the  market  price.  Transport  supplies  in  the  equilibrium  are 
calculated by the intersection of the market price with the individual supply curves. 

National  transport  supplies  are  obtained  by  the  aggregation  of  the  supplies  by  country  and 
aircraft  in  each  market.  National  supplies  are  used  later  to  calculate  the  expected  supply, 

EN 

75 

   EN 

 
 
 
required for capacity planning. An analogue calculation is used to compute freight transport 
demand. 

The  procedure  explained  above  guarantees  that  the  demand  is  satisfied  at  the  minimum 
possible  cost  and  fulfils  the  restrictions  on  capacity.  In  order  to  carry  out  the  procedure 
explained above, the model uses a set of functions contained in an external library specifically 
programmed to this purpose. Supply curves are determined by using the approximation of the 
cumulative  normal  distribution  defined  by  Abramowitz  et  al.  (1970).  Market  prices  are 
calculated following the standard regula falsi method. 

Figure 1 illustrates the calculation procedure explained above in the case of a market made up 
of  four  suppliers.  The  market  demand  in  each  period  is  prescribed  by  the  demand  function. 
The  individual  supply  curves  grow  from  zero  up  to  an  asymptotic  value  that  represents  the 
maximum  capacity  that  can  be  provided  by  the  supplier  from  a  given  price  upwards.  The 
cheaper the supplier, the faster the supplier capacity is saturated. Thus, if there is unsatisfied 
demand  after  using  up  all  the  capacity  of  the  cheapest  supplier  (yellow  curve),  the  other 
suppliers (the cheaper first) use up their capacity until the market demand is met. The most 
expensive suppliers only meet a small share of the demand. The aggregated market supply is 
obtained  by  addition  of  the  individual  supply  curves.  The  market  price  (represented  by  the 
vertical red line) is obtained by the intersection between the market demand and the market 
supply  curve.  The  intersection  of  this  line  with  each  supply  curve  determines  the  supplies 
provided in the equilibrium. 

350

300

250

200

150

100

50

d
n
a
m
e
d

d
n
a

y
l

p
p
u
S

0
300

320

340

360

380

400

420

440

460

480

500

Market price

Supplier 1

Supplier 2

Supplier 3

Supplier 4

Market supply

Market demand

Transport costs 

Figure 1: transport supply 

Operating  expenses  are  estimate  dbased  on  IATA  data.  Fuel  accounts  for  around  30%  of 
direct operating expenses (16% of total operating expenses). 

EN 

76 

   EN 

 
 
 
 
It  is  assumed  that  all  aircraft  types  use  a  homogenous  jet  fuel.  Basic  jet  fuel  price  may  be 
incremented  by  a  surcharge  depending  on  the  carbon  content  of  the  jet  fuel  when  a  CO2 
emission  tax  or  an  emission  allowance  market is  implemented.  Since  aircrafts  from  a  given 
country  can  refuel  anywhere,  it  is  necessary  to  calculate  the  average  jet  fuel  price  in  each 
market. To this purpose, the average jet fuel price in a market is calculated by multiplying the 
price in each country within the market by the national demand in that market, and the result 
is added by country and divided into the market demand.  

In order to represent properly the technical characteristics of the fleet at any time, as well as 
the  fleet  ageing  and  renewal  processes,  it  has  been  adopted  a  vintage  model.  The  average 
specific fuel consumption per km of each type of aircraft is calculated as the weighted sum of 
the fuel consumption of the different aircraft vintages. 

The energy-related utilisation costs of each aircraft class are obtained from the specific fuel 
consumption, the national  shares  and  the average jet  fuel  price  in  each  market,  the  carrying 
capacity, and the load factors. The total operating expenses are estimated by adding the non 
energy-related variable costs, calibrated to fit the market price data. 

Energy use and emissions 

The  pollutants  considered  in  the  model  are  CO2,  H2O,  SO2,  NOX,  CO  and  HC.  Pollutant 
emissions  of  CO2,  H2O  and  SO2  are  proportional  to  fuel  consumption,  while  emissions  of 
NOX,  CO  and  HC  also  depend  on  flight  altitude  and  other  operation  conditions.  For  these 
substances two different emission indexes are considered, according to the available sources 
(Sutkus et al. (2001), and (2003)), each one corresponding to a specific altitude band (climb 
and  descent  phases,  which  takes  place  between  ground  level  and  9  km  during  10%  of  the 
flight  time,  and  cruise  phase,  between  9  km  and  13  km  of  altitude).  The  corresponding 
emissions of each pollutant are obtained by multiplying the emission indexes by the jet fuel 
consumption. Jet fuel consumption is the aggregation of the products of each vintage fleet by 
its corresponding fuel consumption and the average use. 

EN 

77 

   EN 

 
Annex 3: TREMOVE model short description 

TREMOVE  is  a  transport  and  emissions  simulation  model  developed  for  the  European 
Commission.  The  model  has  been  developed  by  the  Catholic  University  of  Leuven  and 
Transport  &  Mobility  Leuven.  JRC/IPTS  is  the  Commission  service  responsible  for  the  in-
house application of the model. 

The  model  estimates  the  transport  demand,  the  modal  split,  the  vehicle  stock  turnover,  the 
emissions of air pollutants and the welfare level under different policy scenarios. TREMOVE 
models both passenger and freight transport in 31 countries, and covers the period 1995-2030.  

TREMOVE model structure 

TREMOVE  is  a  policy  assessment  model  to  study  the  effects  of  different  transport  and 
environment  policies  on  the  emissions  of  the  transport  sector.  It  is  an  integrated  simulation 
model developed for the strategic analysis of the costs and effects of a wide range of policy 
instruments and measures applicable to local, regional and European transport markets. 

The TREMOVE model consists of separate country models. While the numeric values of the 
model  differ  from  country  to  country,  the  model  code  is  identical  across  countries.  Each 
country  model  describes  transport  flows  and  emissions  in  three  model  regions:  one 
metropolitan  area,  an  aggregate  of  all  other  urban  areas  and  an  aggregate  of  all  non-urban 
areas. Trips in the non-urban areas are further separated in short (-500 km) and long (+ 500 
km) distance trips. The model explicitly takes into account that, depending on the area taken 
into consideration, the relevant modes and network types differ. 

The transport demand module represents, for a given year and transport mode, the number of 
passenger-kilometres or ton-kilometres that will be performed in each “model region” of the 
country considered. 

Three freight categories are distinguished (bulk, unitized and general cargo) as well as three 
passenger  trip  purposes  (non-work,  commuting  and  business).  Also,  transport  flows  are 
allocated  to  peak  and  off-peak  periods.  With  this  demand  module,  the  impact  of  policy 
measures on the transport quantity of all transport modes is calculated. 

Transport  modes  for  passenger  trips  include  slow  modes,  mopeds,  motorcycles,  cars,  vans, 
bus, metro/tram, train and plane. Freight modes are inland waterways, freight trains, light duty 
trucks  and  heavy  duty  trucks  (disaggregated  to  four  weight  classes).  Four  road  types  are 
distinguished. 

TREMOVE  models  the  transport  activities  within  these  areas  without  explicit  network 
disaggregation.  This  simplification  allows  to  calibrate  a  simple  but  complete  policy 
simulation  model  starting  from  an  exogenous  baseline  transport  forecast.  The  baseline 
transport flows are taken from the SCENES model which is a genuine network model. Thus, 
to a certain extent, the TREMOVE demand module is a reconstruction of the SCENES model. 

Modelling transport decisions of households and firms 

EN 

78 

   EN 

 
 
Private  transport  and  business  transport  are  modelled  separately  in  the  transport  demand 
module. 

The demand for private transport (non-work and commuting passenger trips) is the result of 
the  decision  processes  of  all  households  in  a  country.  Private  transport  demand  has  been 
determined assuming that, within the constraints of their available budget, households choose 
their preferred consumption bundle. 

I.e. they choose the combination of goods that maximizes their utility. The demand for goods 
and services follows then from this maximizing behaviour. 

The  decision  processes  of  households  are  modelled  using  nested  Constant  Elasticity  of 
Substitution (CES) utility functions. These represent the preference relation of all households 
for the different transport options. Knowing the substitution elasticities between the different 
transport  options,  it  is  possible  to  model  the  change  in  consumed  quantities  in  policy 
simulations.  As  an  example,  the  following  two  figures  present  parts  of  the  nested  utility 
function. 

EN 

79 

   EN 

 
The demand for business transport (freight transport and business passenger trips) is modelled 
as  a  result  of  the  decision  processes  within  firms.  The  business  transport  demand  is 
determined by generalized prices, desired production quantities and substitution possibilities 
with other production factors. 

It is assumed that, in any given year, the production level of all firms in a country is given and 
kept constant. For a given production level, profit maximization then is equivalent with cost 
minimization.  The  cost-minimizing  substitution  processes  are  represented  by  a  nested  CES 
production function. At the highest level, there is the total production, which is a function of 
the components at  the lower levels. At  the lowest level,  the arguments  are the  inputs  in  the 
production  process.  The  latter  inputs  include,  amongst  others,  freight  transportation  and 
business passenger trips. 

Transport prices 

EN 

80 

   EN 

 
 
Transport users react on the generalized price of transport. Therefore, the price is represented 
as a sum of detailed price components. The resource cost for transport services consists of the 
monetary producer costs of all inputs necessary for these services (cars, fuels, maintenance, 
etc.).  On  top  of  the  resource  costs,  the  consumer  usually  pays  taxes  or  receives  a  subsidy. 
These are taken into account to calculate the market price. The distinction between user prices 
and costs is important for the welfare assessment  module,  as  it  determines  the  governments 
tax revenue from the transport sector. In the demand module, transport users are assumed to 
make their decision on the basis of user prices. 

Furthermore, time costs are added in the generalized price. Time costs depend on the ‘value of 
time’ of the considered transport trip mode and the travel speed. For the road modes, speed is 
modelled explicitly and varies with transport demand, time period and road type. The speed 
values are also used in the calculation of emissions. 

Simulations 

Baseline  transport  demand  is  taken  from  the  SCENES  model.  The  TREMOVE  demand 
module  then  enables  to  assess  changes  in  transport  demand  under  various  policy  scenarios. 
Policy  measures  will  affect  the  generalised  prices  of  transport  in  the  demand  module.  The 
prices  can  be  affected  by  technological  measures  and  new  taxation  or  regulation  policies. 
Within  the  demand  module,  these  new  prices  will  lead  to  a  change  in  transport  demand. 
Overall  transport  volumes  will  alter  and  substitution  between  modes  will  occur.  As  a 
consequence also congestion, travel speed and the time price of transport will be affected. 

Welfare module 

To  evaluate  policies  in  TREMOVE,  a  welfare  assessment  module  has  been  constructed. 
Differences in welfare between the baseline and the simulated policy scenarios are calculated. 

Based on the utility functions for the private transport demand, the aggregate utility level of 
households is quantified. The modelling of business decisions leads to an aggregate measure 
for  the  change  in  production  costs  of  firms.  Additionally,  welfare  changes  stemming  from 
changes  in  tax  revenues  are  incorporated  by  using  the  marginal  cost  of  public  funds.  This 
latter approach accounts for the options of the government to beneficially use additional tax 
revenues  from  the  transportation  sector  to  lower  taxes  in  other  sectors.  Emissions  to  air  are 
calculated in detail as explained in the next section. The external costs of these emissions are 
also incorporated in the welfare evaluation of policy measures. 

Life cycle emissions 

In TREMOVE, a restricted life cycle assessment module is implemented, focusing on the fuel 
cycle only. 

To  concentrate  on  fuel  implies  that  not  only  operational  emissions  of  vehicles,  but  also 
emissions due to production and distribution of the fuel (or electricity) are taken into account. 
I.e. well-to-tank and tank-to-wheel emissions are calculated. 

Detailed documentation on the various modules of TREMOVE can be found at: 

http://www.tremove.org/documentation/Final_Report_TREMOVE_9July2007c.pdf 

EN 

81 

   EN 

 
Executive summary .................................................................................................................. 2 

Section 1: Procedural issues and consultation of interested parties ........................................... 4 

1.1 

1.2 

Organisation and timing............................................................................................... 4 

Consultation and expertise ........................................................................................... 4 

1.2.1  Consultation with Member States and stakeholders .................................................... 4 

1.2.2 

Expertise....................................................................................................................... 6 

1.2.3  Opinion of the Impact Assessment Board.................................................................... 6 

Section 2: Problem definition..................................................................................................... 7 

2.1 

What is the issue or problem that may require action? ................................................ 7 

2.1.1  Discriminatory and excessive security charges............................................................ 7 

2.2 

Drivers of these problems .......................................................................................... 10 

2.2.1 

Lack of transparent security costs .............................................................................. 10 

2.2.2 

Security charges are the only airport fees not regulated ............................................ 12 

2.3 

2.4 

2.5 

Who is affected, in what ways, and to what extent? .................................................. 13 

How would the problem evolve, all things being equal? Should the EU act? ........... 13 

Treaty base ................................................................................................................. 14 

Section 3: Objectives................................................................................................................ 15 

Section 4: Policy options.......................................................................................................... 15 

4.1 

4.2 

4.3 

Option 1: No EU action ............................................................................................. 16 

Option 2: Self-regulation ........................................................................................... 16 

Option 3: EU Directive on non-discrimination, transparency, cost-relatedness and 
possibility to appeal ................................................................................................... 17 

4.4 

Option 4: Full state funding of airport security.......................................................... 17 

Section 5: Analysis of impacts ................................................................................................. 18 

5.1 

5.2 

5.3 

Option 1: No EU action ............................................................................................. 18 

Option 2: Self-regulation ........................................................................................... 19 

Option 3: EU Directive on non-discrimination, transparency, cost-relatedness and 
possibility to appeal ................................................................................................... 19 

5.4 

Option 4: Full state funding of airport security.......................................................... 22 

Section 6: Comparing the options ............................................................................................ 25 

EN 

82 

   EN 

 
 
Section 7: Monitoring and evaluation ...................................................................................... 31 

EN 

83 

   EN