REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the application of the Airport Charges Directive
Date: 2014-05-19
Institutions: European Commission
Subjects: access to EU information, administrative transparency, airline, airport, carriage of passengers, charges for use of infrastructure, competitiveness, equal treatment, provision of services, transport regulations













EUR-Lex - 52014DC0278 - EN











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52014DC0278

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the application of the Airport Charges Directive /* COM/2014/0278 final */









1.         Introduction
Airport
charges are paid by airport users (airlines) for the use of airport facilities.
They are related to landing, take-off, lighting and parking of aircraft, and
processing of passengers and freight and fund
in part or entirely the provision
of runways and associated
areas and passenger and cargo terminal areas Although airport charges are
levied on airlines, the cost is ultimately borne by the passenger or freight
customer since these charges form part of the final price which they pay.
The
share of airport charges in airlines' total costs varies based on the type of
carrier and the airports served.[1]
They make up around half of the average airport's revenues[2] and
given the current difficult cost climate for airlines, they are under closer
scrutiny than ever. Airport charges are also linked to the level of service
offered to passengers. For low cost and short haul operations in particular,
the level of airport charges might be one of the
determinants in airlines' decisions on which routes
to fly. The availability of competitively-priced and quality airport
infrastructure for all types of airline is clearly of key importance to a
successful aviation sector in the EU.
The
Airport Charges Directive[3],
which the Member States were required to transpose to national law by 15 March
2011, is a specific EU legal framework for airport charges at all airports in
the European Economic Area and Switzerland with more than 5 million passenger
movements per year and at least the largest airport in each Member State.
Around 70 EU airports fall within the scope of the Directive; representing just
under 80% of EU passenger traffic. This group represents a wide variety of
airports, ranging from medium-sized airports making a key economic and social
contribution to their respective regions, to the largest hub airports in the EU
linking destinations worldwide. The Directive sets
common principles for the levying of airport charges and in this connection it aims
to: provide for greater
transparency on how airport
charges are calculated;
ensure that airports
do not discriminate among airlines in the application of airport charges
(unless justified by well-defined public policy considerations);
establish regular consultation
between airports and airlines; and establish in each Member State an
independent supervisory authority (ISA) tasked
with settling disputes
between airports and airlines on the level of airport charges and overseeing the correct
application of the measures taken by Member States to comply with the Directive.
In this report, the Commission provides
an overview of the application of the Directive in the Member States and indicates
specific findings with regard to possible problems in its
implementation with a possible follow
up
for future analysis. The report draws upon a recent study carried out for the
Commission for this purpose[4].
This study has analysed whether there has been any impact on airport charging
practices which could be attributed to the Directive and also includes a
comprehensive consultation of stakeholders to canvas views on the
implementation of the Directive, the results achieved and areas requiring
further attention. Such stakeholders include the independent supervisory
authorities established by the Directive, other competent authorities in the
Member States, individual airport managing bodies and airlines as well as their
representative associations.
2.         Market
developments
Over
the last decades EU airports have gone through an important transformation
which also has an impact on the setting of airport charges. While public
authorities used to view major hubs and smaller airports primarily as
infrastructure to respond to connectivity needs, these airports are developing
into businesses that are expected to make profits and attract private
investors.
This
process has involved the
"corporatisation" of publicly-owned airports and, in some cases,
privatisation. This can be attributed to different changes.
Firstly, the role of the state in the provision of transport infrastructure is
changing from one of provider to one of enabler. Second,
airports, which are in many cases profitable, are today
regarded as pursuing a
commercial activity. Lastly, public authorities have been eager to attract
private investors both to expand infrastructure and provide income for the state.
While still predominantly publicly owned,[5]
airports across the Union are currently witnessing a growing involvement of
private investors.
However,
given the strategic character of airport infrastructure, Member States have typically
retained a degree of direct interest or control, either through direct
ownership/concession of airport operations and/or via a system of (national)
economic regulation. The latter is the case in particular in Member States
where large airport hubs are located due to these airports' 'price-making'
capacity.[6]
At
the same time, a shift in bargaining power between airports and airlines to the
benefit of the airlines can be observed at certain – generally smaller – airports
with the growth of low-cost carriers (LCCs). Such carriers, due to their
flexibility, can not only switch the routes they
serve but also switch the airports at which they base aircraft.
Airlines review the performance of their existing routes continuously with a
view to seeking out new destinations and improving
the attractiveness and profitability of their operations.
This has the effect of introducing competition among airports in different
geographical locations and increasing the pressure upon airport managers to
offer more favourable conditions, including lower airport charges. Added to
this, an
excess of airport capacity has also brought about competition among airports,
further increasing the bargaining power of the airlines in certain instances.
Airports claim that they are faced with increasing competition[7]
and not only as a result of the impact of LCCs at regional airports. However,
the degree of competition among airports appears to vary and is dependent upon
largely local factors. Airlines argue that
passengers tend to switch airlines rather than airports, on the basis of
competing air travel products.
3.         Achievements
of the Directive 
By
early 2013, all Member States had notified their full transposition of the
Directive. However, formal transposition is only the first step. The correct,
practical application of the Directive and its impact on airport operators,
airlines and the broader aviation sector are of also
of great importance. At this early stage, the
Commission finds that a number of the main objectives of the Directive have
already been achieved. However, there are specific problems regarding transposition
and application in a number of Member States and
these are to be resolved by drawing Member States' attention to identified
problems and via the infringement procedure
where necessary. The most important features
of the Directive that will be analysed in this
chapter are:
·        
Regular consultation of airport
users by airport managers on the operation of the system of charges, on the
level of charges and the quality of service and consultation of the airport
users on plans for new infrastructure (Article 6 of the Directive).
·        
Transparency
by the airport manager concerning the basis for setting charges including
requirements for information flow to and from the airport users (Article 7 of
the Directive).
·        
Non-discrimination
between airport users (Article 3 of the Directive).
·        
The establishment of an independent
supervisory authority (ISA) in every Member State to ensure the correct
application of the Directive's measures and to intervene in case of disputes
on airport charges (Articles 6 and 11 of the Directive).
·        
Flexibility
to allow airport managers to offer differentiated services to airlines (Article
10 of the Directive).
The
Directive builds upon policies on airport charges developed since 1974 by the
International Civil Aviation Organization.[8]
It should be understood against the background of the relevant bilateral air
service agreements, drafted in accordance with the ICAO standard clauses, pursuant
to which the EU and its Member States are generally required to allow airlines
of the third country a fair and equal right to compete in providing
international air transport. In this connection, the comprehensive air
transport agreements concluded with the US and Canada, for example, also
contain specific provisions with regard to user charges, including airport
charges, namely to ensure that such charges are reasonable and reflect the cost
of providing the services provided.
3.1.      Consultation
Views
among stakeholders vary regarding the provisions on consultation. Although a
fair number of airports already had a consultation mechanism in place, the
Directive has brought more clarity as to the timelines and format of the
consultation. At airports in
some Member States, for example Bulgaria, Czech Republic, Estonia, Hungary. Latvia, Lithuania, Luxembourg, Slovenia, Spain and Sweden, mandatory consultation was only
introduced as a result of the Directive being transposed. In addition, the
Directive imposed mandatory consultation procedures for the first time at those
airports in the UK falling within the scope for the Directive which had not
hitherto been subject to the economic regulation applied at the largest UK airports.
Airlines
question the application of the consultation arrangements, arguing airports
should do more to engage with airlines rather than merely provide information. Airlines
would like their opinions not only to be heard but also be followed. A further
issue raised relates to the timeline and the tight deadlines given in some
Member States for airport users to respond in the consultation process.
Among
airlines, satisfaction with the consultation varies depending upon the Member State of the airport. While airlines at larger airports in the UK and the Netherlands are generally satisfied with the consultation procedure, airlines were
critical as regards the process in Spain, Italy, Greece and Hungary, in particular about the time given to respond and the fact that the consultation
often rather takes the form of an information session.
Among
airports, those with a wider base of airport users (Amsterdam Schiphol,
Heathrow, Aéroports de Paris and Frankfurt) are generally satisfied with
the consultation process and find it useful to have codified guidelines at EU
level. On
the other hand, concerns
about the formality of the process and the administrative burden
associated with organising a formal consultation procedure are cited by some of
the smaller airports subject to the Directive. Several
airports criticised the uncertainty caused by the limited
degree of participation by airlines and the
procedures for appeals on airport charges, without any
time limit for airlines. The Directive also provides for a duty for airports to
consult airport users before plans for new infrastructure projects are
finalised, although the procedure to be followed and the minimum requirements
are not specified.
The
Commission regards airport users' confidence in the consultation process as
essential. It is therefore important that they have a reasonable expectation
that their views will be heard and responded to, in accordance with the
relevant provisions of the Directive. To ensure the practical effects of those
provisions, this can mean, as the case may be, that the consultation should be
organised in a way which provides for a suitable degree of interaction (including,
for example, pre-notification of meetings or deadlines for input). The
Commission also attaches importance to a constructive engagement of airlines in
the consultation process.
Complaints
received by the Commission with regard to the financing of major infrastructure
expansion at Dublin and Rome demonstrate the importance of a functioning
consultation system given the impact on future airport charges. Related to
consultation on new infrastructure is the question of infrastructure
prefinancing, the system whereby today's airport users are levied higher
charges in order to fund tomorrow's infrastructure (as opposed to raising
funding through issuing new equity or through borrowing, for example). Research
carried out for the Commission indicates that prefinancing is possible in the
majority of Member States, although the conditions applicable are usually
unclear in the Member States. The Commission has identified two Member States (Portugal and the Netherlands) where the law is clear that airports may not finance infrastructure in
this way. Of the remaining Member States, which presumably do allow
prefinancing, the Commission has identified nine Member States operating
specific rules. It is not clear to which extent the guidelines adopted by ICAO,
which detail a number of safeguards which should apply where prefinancing is
used, are consistently applied in practice. The introduction of additional and
more specific means of ensuring adequate consultation and achieving greater
transparency under the Directive with regard to prefinancing may require further
consideration.
3.2.      Transparency
In
order for a consultation on airport charges to
work properly, it is necessary
that the airport users
being consulted have access to sufficient information in order to be able to provide
input. Airport users, airports and Member
States value the clarity on transparency provided
by Article 7 of the Directive,
but airlines
tend to find the requirements of the Directive too general. Airlines
criticise, in particular, the broad
level of detail in the cost information to be
provided and the fact that
the Directive does not require the provision of information on airports'
commercial activities. Airlines also consider
that the information provided may not be
sufficiently detailed to allow them
to determine whether or not charges are cost-related.
Satisfaction
of airlines with the transparency of information differs among airports and
among Member States. Airport users were generally satisfied with the situation
at UK airports and at Amsterdam Schiphol where they consider that information
is provided in a transparent manner and on a regular basis. 
Among
those airports where airlines are not satisfied, airlines cite the application
of transparency requirements for airports in Italy, Hungary, Belgium, Germany, Greece, Cyprus, Latvia, Spain, Sweden and Finland. Airport users indicated a lack
of detailed cost data as the most common concern in these cases.
The
Directive allows in principle Member States to choose single or dual till
charging systems for their airports. In a single till, all airport revenues,
including from non-aeronautical activities such as retail and car parking, are
taken into account when setting airport charges. The dual till system separates
the aeronautical and non-aeronautical revenues and only takes into account the
aeronautical revenues when setting airport charges and is generally favoured
among airports on the grounds that non-aeronautical activities are not
monopolistic. Hybrid systems are also in operation. Airlines typically argue in
favour of the single till on the grounds that it lowers the airport charges for
airlines, which are responsible for bringing passengers to the airport and
which therefore drive the non-aeronautical revenues.
Whilst
not expressing a position at this stage for or against one particular system, the
Commission considers that a greater degree of supervision may in some cases be
required from the ISAs to ensure that fundamental principles of the Directive
are upheld in the case of airports at which the dual till applies, taking into
account the economic context in which the airports operate and the possibility
to establish their tariffs in a competitive environment. For example, it may be
appropriate to ensure that the cost of airline incentives designed to boost
traffic at an airport are applied in a way which does not have an impact on the
charges paid by airlines not benefitting from the scheme. Moreover the
Commission considers that, as a general rule, any change from single till to
dual till, or vice versa, is a fundamental change to the system of charges in
so far as it may have a significant impact on the level of charges applied.
Such a change should be accompanied by a consultation together with possible
appeal to the independent supervisory authority in accordance with the relevant
provisions of the Directive, which provide for consultation when there is a
change proposed to the level or system of charges.
3.3       Non-discrimination
of airport charges and incentive systems
Non-discrimination
in the application of airport charges among airport users is of key importance.
It does not, however, prevent the modulation of charges, as
long as this occurs in accordance with the requirements set out in Article 3 of
the Directive, i.e. the modulation should be for issues of public and general
interest, including environmental issues, and
the criteria used in
this respect should
be relevant, objective and transparent. Although airports claim there is no
discrimination in the application of such modulations,
airlines complain about the large variety of modulation in charges that in their
view results in discrimination among
airport users.
Modulated
charges for environmental reasons,
such as relating to emission
and noise charges, are
a widespread phenomenon
which appears to be uncontroversial. The same goes for modulation relating to
peak/off peak times, which a limited number of airports apply.
The modulation of airport charges on environmental grounds may become
increasingly important given the pressure to improve aviation's performance in
this area.
Modulation
of charges according to domestic
or EU destinations
of flights is subject to the case-law of the European Court of Justice.[9] In its
rulings, the Court has
held that discriminatory taxes or charges are contrary to the freedom to
provide services as set out in Regulation 1008/2008[10]. In
so far as differentiated charges are not justified on
the basis of the Article 3 (issues of public and general interest, including
environmental issues) they could be regarded as making
the provision of services between Member States more difficult than the
provision of services purely within one Member State. The Commission has
recognised that passengers subject to border controls may generate higher costs
than other passengers, thereby justifying a higher passenger charge[11]. Subject
to compliance with the requirements of Article 3 and the need to ensure
proportionality, modulation could therefore apply between Schengen and
non-Schengen destinations.
Modulation
of airport charges designed to increase traffic, based on new routes, increased
frequency and/or passenger numbers ("incentives schemes") are,
on the other hand, controversial among stakeholders.
Network and regional air carriers consider that volume discounts and growth
discounts for new and existing routes favour low-cost carriers and newcomers.
On the other hand, discounts for transfer passengers at hub airports are
unpopular with low cost carriers which generally do not offer connections. Such
discounts may be significant, for example amounting to more than 50% at
Amsterdam Schiphol.
The extent to which such transfer discounts
are granted on a purely
economically-justified basis is not always clear.
The
Commission will encourage the sharing of experience among Member States, with a
view to promoting best practices taking into account the possibility for
airports to set their tariffs on the basis of economic criteria, and in
compliance with the provisions of the Directive. A balance has to be reached between
providing airports with an appropriate degree of commercial freedom, for the
benefit of airports but also airlines and passengers, and safeguarding the
position of carriers which may not have the power to moderate airports' pricing
behaviour. Improving the transparency of incentive schemes could be an
important first step.
3.4.      Remedy
procedure and independent supervisory authorities
The
Directive has brought clarity by obliging the setting up of an independent
supervisory authority (ISA) in each Member State, although establishing them
has sometimes been a slow process. However, with the establishment at the end
of 2013 of the Autorità di Regolazione dei Trasporti in Italy, the last Member State to designate its ISA, all Member States have now completed this step.
The most common model chosen by the large majority of Member States is to grant
the ISA functions to existing aviation administrations. Some Member States have
granted ISA functions to existing regulators (such as Ireland, UK, Sweden,
Finland) and two Member States have granted ISA functions to competition
authorities (Netherlands, Spain). Airlines in particular are satisfied that the
Directive provides for a clear remedy procedure in case of disagreement on the
setting of the airport charges but it remains to be seen how the role of
independent supervisory authorities develops. On the side of the airports,
concerns were raised on the increase in appeals procedures by airlines to the ISA
and the suspensive effect of appeals. The most important issues surrounding
appeals seems to be that the Directive does not
expressly provide for a statutory deadline for
airlines to submit an appeal and the suspensory effect of appeals, which might
have the effect of holding up investment in infrastructure.
One
of the core issues raised, especially among airlines, is the perceived lack of
independence of the ISA. In particular, the
perceived imprecise definition of the degree of
independence required of the ISA was considered a concern in the case of Member
States with a public shareholding in airports where a ministerial department is
the ISA or where the department exerts a degree of political or administrative
control over the ISA. Effective independence of the ISA in
accordance with the requirements of Article 11 of the Directive is
crucial, inter alia,
for the consultation and remedy process to function properly and lack of
independence undermines the achievement of the objectives
of the Directive.
Where
Member States have transposed Article 6 (5) (a), according to which airport
charges are set or approved by the ISA itself rather than the airport managing
body, the rules on appeals
set out in paragraphs 3 and 4 of that Article do
not apply. This generally means that the
only remedy available in case of disagreement is bringing a
legal action before the competent
national courts in accordance with the relevant
rules of national law. Airlines consider this
problematic since the cost of such actions
may be prohibitive. A significant number of Member States, such as Austria,
Belgium, Cyprus Denmark, France, Germany, Hungary, Ireland, Netherlands and the
UK have chosen to make use of the option offered by
Article 6 (5) (a) of the Directive for some or all
of the airports located in their territory and covered by the Directive.
Airlines
have also raised concerns on the passive role of some ISAs based on a possible
lack of expertise or human resources. On average, only one full time equivalent
is employed in each authority to deal with matters related to the Directive,
mainly consultation, oversight and dispute resolution procedures. This in turn
means that the additional administrative cost for the Member States imposed by
the Directive is considered minimal in all Member States,
although the level of activity of each ISA diverges.
There is evidence that a limited degree of visibility for the newly-established
ISAs has translated into fewer complaints being received by such bodies
compared to authorities which were already handling airport charges matters
prior to the entry into force of the Directive.
The
Commission will continue to monitor the implementation of the Directive with
regard to the independence of the ISAs established in the Member States. On a
related issue, the Commission notes the evolution in ownership and management
models found at airports subject to the Directive. There is a risk in some
cases that long-term concession agreements, under which airport charges are
determined for a long period in a binding manner by agreement of the concessionaire
and the responsible public authority but with no consultation of airport users,
may render the Directive's provisions on consultation and the intervention of
the ISA inoperative. Vigilance is required to ensure that in so far as airport
charges are concerned, concessions, or public private partnerships, are not
concluded in such a way so as to deprive airlines of their full rights under
the Directive or that the Directive is otherwise infringed.
3.5.      Differentiation
of services
Services
available at an airport may be tailored
by the airport managing body to the needs of
different airport users and may vary in terms of quality and, therefore, cost.
The Directive provides that any airport user wishing to use the tailored
services or dedicated (part of a) terminal should have access to this terminal
or part of it. Where there are capacity constraints
upon the differentiated service, access is to be determined on the basis of
relevant, objective, transparent and non-discriminatory criteria.
This has provided a framework for airports to match their offer to airlines'
sometimes diverse needs in terms of services at the airport.
It is not uncommon for airports to
differentiate their charges accordingly
based, for example, on the level of service
provided in terms of stands and air bridges.
On the other hand, only a small (but
growing) number of
airports have specific terminals dedicated to domestic and international
routes, or to low-cost and full-service operations. The low-cost terminals are
sometimes significantly cheaper in terms of the charges payable by airlines (up
to 30% in some cases).
Airports
have sometimes encountered difficulties in tailoring their services and
establishing the criteria to justify the difference in charges, as required by Article
10 of the Directive. The Commission will continue to monitor the application of
this Article by the Member States in order to identify, if necessary, possible
remedial measures.
4.         Conclusions
Although
it is too early to draw definitive conclusions on the impact of the Directive
due to its recent entry into force, preliminary conclusions can be drawn. The
main positive effects mentioned by the market players are increased
transparency in defining airport charges at the largest European airports,
better consultation, and the setting-up of independent supervisory authorities
in each Member States and remedy procedures.
Whilst
the Directive appears to have made an important contribution to improving the
process for setting airport charges at the larger European airports at which it
applies, its application needs to be further
monitored. Several infringement procedures have been initiated and the
Commission will act, as appropriate, in other cases on the basis of complaints
received or ex-officio.
More
specifically, the establishment of the independent
supervisory authorities with the necessary degree of independence as
required by the Directive is crucial to the
attainment of the Directive's objectives. The role of the authorities in all
Member States will be addressed as a priority issue.
The Commission
also intends to create a forum
of ISAs, meeting regularly to discuss issues related
to the enforcement of provisions of the
Directive in the
Member States. The objective is to help these
ISAs to develop their working methods and
knowledge by sharing experience and best practice. The first meeting will take
place on 13 June 2014.
Lastly, it will also be necessary to
reflect on to what extent the objectives behind the Directive might need to be
revisited in the future as a result, for example,
of changes in the
competitive landscape in which airports operate.
Similarly, the Commission will
need to determine whether the attainment of the Directive's objectives could be
better served by revising the Directive. Some
of the specific issues which could merit
further examination, such as the use of incentive schemes, differentiated
services, are discussed in sections 3.1 – 3.4 of this report and the
Commission will use the group of ISAs
to review the findings
of this report.
For the aviation sector in the EU to
respond to the challenges it faces, to give good value for money services to
passengers and to continue to provide intra-EU and global connectivity, it is
essential that competitive airport services be available to airlines and
passengers. As EU airlines integrate ever more closely with airlines from other
regions, through the development of open skies agreements, carrier alliances
and other forms of airline cooperation, the issue of discrimination
between users of the airports becomes even
more important. It
is important to ensure that airport
charges are applied in a fair manner so that
airlines of all nationalities can fairly compete
at European airports, in the interest inter alia of connectivity.
It is also necessary to allow airports to grow their businesses in a dynamic
way, which
will contribute to
the further development of a competitive European aviation sector.
[1] According to ACI Europe (2007) airport
charges account for around 4 to 8% of major EU carriers' operational costs, In
its March 2013 Economic Briefing IATA claimed that all infrastructure user
charges combined accounted for 14.4% of the cost of air transport (2011 figures).
According to IATA airports' aeronautical charges make up some two thirds of
these infrastructure user charges.
[2] Steer Davies Gleave, Evaluation of
Directive 2009/12/EC on airport charges; September 2013
[3] 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.
[4] Steer Davies Gleave, Evaluation of
Directive 2009/12/EC on airport charges; September 2013
[5] According to Airport Council International
Europe, 77 % of airports were fully publicly owned in 2010, while 9% were fully
privately owned, see Airport Council International Europe: The Ownership of
Europe's Airports 2010.
[6] The largest EU airport hubs are located in
the UK, France, Germany and the Netherlands.
[7] Airports Council International (Europe),
'Airport Competition in Europe', June 2012.
[8] See recitals (9) and (10) of the Directive,
Cf. ICAO’s Policies on Charges for Airports and Air Navigation Services (ninth
edition, 2012)
[9] Ruling of 26.06.2001 Commission/Portugal
(C-70/99) rec. p. I-4845, point 20; ruling of 6 February 2003, Stylianakis,
C-92/01, Rec. p. I-1291, point 23 onwards.
[10] OJ L 293,
31.10.2008, p. 3.
[11] State aid case E4/2007