Airport charges deal on horizon

Date: 30/04/1998

By Chris Johnstone

STALLED European Commis-sion attempts to force airports to be more open about their charges to airlines and to bring them into line with costs look set for take-off following a new offer to governments.

Commission negotiators believe they have overcome national opposition to the plans by changing their proposal on the controversial question of whether companies which run more than one airport can transfer cash between them.

The Commission's proposed directive calls for Union governments to take a tough line against cross-subsidies between airports, arguing that they could distort competition and lead to an airline operating at one airport effectively helping to fund another which it never used.

However, its original proposal to outlaw all cross-subsidies prompted fierce opposition from some member states, with Sweden in particular warning that it would create chaos for its network of government and locally-owned airports. Little-used destinations in the far north rely on funds from Stockholm's busy Arlanda airport to keep going. Finland operates a similar system.

The new offer from the Commission would allow payments between airports, as long as the money did not come from airline take-off and landing fees.

It could, for example, include earnings from letting shops and advertising space.

"We have made arrangements so that cross-subsidies are possible from revenue other than airport charges. This has cleared up the main problem," said Transport Commissioner Neil Kinnock.

Europe's airport lobby, ACI Europe, said the new offer was acceptable. "This is certainly a fairer system than just ruling out cross-subsidies. Airports support this approach," said ACI spokesman Yevgeny Pogorelov.

Europe's airports are also hoping that they have rebuffed British attempts to force them to provide an 'efficient' as well as a cost-effective service. "How can you decide efficiency?

That is extremely difficult to define. One man's efficiency is another man's inefficiency. I think they are not going ahead with this very subjective idea," added Pogorelov.

Acrimony over the charges issue forced the proposed directive off the agenda for last month's meeting of EU transport ministers.

It is now hoped that the latest proposals will put the draft legislation back on course for completion by the end of this year.

Curbing airport charges is one of the main objectives of the Commission's aviation policy following studies showing that European airlines were paying far more than their US counterparts.

Officials say lower charges would cut costs for start-up airlines, boost competition and result in lower fares.