Liberalisation deal hopes rise

Date: 30/11/1995

By Michael Mann

HOPES are rising that the EU will take the first step towards injecting greater competition into ground-handling at European airports before the end of the year.

There is growing optimism that EU transport ministers will reach a common position on the issue at a meeting next week, although the proposal now on the table does not go as far as the European Commission orginally intended.

Central to securing a deal at the meeting on 7-8 December will be the attitude shown by the French and Germans, who are both looking for derogations which would allow them to maintain the status quo at major international airports.

The German government remains insistent that liberalising ground handling operations at Frankfurt airport would prevent a sufficiently fast turn-round in aircraft.

France remains convinced that political muscle in Bonn will allow Germany to win the derogation it needs to maintain its monopoly ground-handling arrangements, and is arguing for similar concessions.

As the proposal stands at the moment, member states would be able to set a maximum number of operators permitted to operate at any airport, as long as there were a minimum of two, independent of both the dominant carrier and the airport.

France is pushing for a form of wording in the final agreement which would require the two only to be independent of each other, at least for 'air-side' handling - the operations involving the aircraft on the ground. In practice, this would maintain the current situation, where Air France and the airport share the work between them.

Member state officials suggest that France can rely on support from at least four other countries - Greece, Austria, Italy and Portugal.

Spanish Transport Minister José Borrell is known to favour the principle of liberalisation and is keen to have something to show for his six months' chairing ministerial meetings.

“One way out might be to allow the French duopoly to continue to operate for a limited period, and agree to end the derogations allowing monopolies at certain airports at the same time,” suggested one member state official.

Some progress on the dossier was made at ministers' last meeting on 28 September on the basis of amendments proposed by the Spanish presidency.

Under the current plan, all airports would have to allow airlines to carry out their own 'land-side' activities - mainly check-in.

Airlines could only run their own 'air-side' operations at airports handling at least a million passengers per year. The threshold for third-party handlers would be cut from three to two million passengers by early next century.

Although thresholds were also worked out for the volume of freight to be dealt with, officials stress that “the main benefits of liberalisation will accrue on the passenger side”.

Liberalisation, which has thus far only happened in the UK and the Netherlands, and to a lesser extent in Denmark and Spain, would apply from 1998 for 'land-side' and from the year 2000 for 'air-side' activities.

If ministers can come to an accord before Christmas, the question will then have to be referred back to the European Parliament for a second reading, under the so-called 'co-operation procedure'.

The Association of European Airlines (AEA) is unequivocal in its support for the liberalisation of the sector, rejecting claims that it should be opposed on grounds of safety or potential congestion at airports.

The organisation's Secretary-General Karl-Heinz Neumeister points to both Heathrow and Schipol as examples of airports which “cannot be called unsafe because of competing ground handling service providers”. He says that even congestion at these airports cannot be used to justify a reduced number of handlers.

“Not even the argument of employment can overrule the basic freedom to provide services,” he insists.

Nearly three years after the single market entered into force, the AEA has called for liberalisation to come in the form of a regulation, to avoid airlines using the more gradualist approach of a directive to delay the process further.

Naturally, Airports Council International (ACI) has taken a different approach to the question.

Accepting the need for change, ACI nonetheless insists on special dispensation for “a few airports with serious capacity problems” and accuses the Commission of restricting airports' rights to “manage their business in a commercial and non-discriminatory manner”.

Even if Germany succeeds in winning the support of other member states for its demand for a derogation, it may be forced to open its doors to outside competition if DGIV, the Directorate-General responsible for competition, upholds a series of official complaints already lodged against Bonn about its restrictive national laws.