Delay hits bid to cut back airport charges

Date: 08/10/1998

By Chris Johnstone

CONTROVERSIAL plans to stop airports overcharging airlines for using their services appear to have been put on the back burner by the Austrian presidency.

The proposals drawn up by the European Commission were not discussed at last week's meeting of Union transport ministers and are unlikely to be put on the agenda for their next meeting in November.

“It does not appear to have been given much priority by the Austrians and will have to wait for another presidency to pick it up,” said one EU official. “If the presidency were to push it, it could make some progress,” said another.

Austrian diplomats say that the proposals are still being discussed by working groups made up of national experts, but admit that the issue is not “the first priority”.

“There still appears to be a lot of controversy. There are a lot of airline groups and they seem to have got hold of their capitals,” said one.

The Commission's proposal calls for airport charges for take-offs, landings and ancillary services to be tied to their real costs. It would also require airports to give a full breakdown of how their final charges have been calculated.

The proposal has heightened tension in relations between airports and airlines, with each side trying to win changes in its favour.

The airlines, which claim they are consistently overcharged by what are sometimes virtual monopolies, see it as a useful instrument to force prices down.

Both sides have commissioned academic research to justify their arguments. One such study carried out earlier this year for the airline lobby, the Association of European Airlines (AEA), pointed out that airport charges accounted for around 25&percent; of airlines' overall costs and that one of their main ingredients, handling costs, were 70&percent; higher than in the US.

The Commission's proposal first ran into trouble when Sweden and Spain objected to clauses which would have prevented fees generated by charges levied at their main airports from being used to subsidise outlying regional terminals.

Transport Commissioner Neil Kinnock appeared to resolve that problem before the summer break by saying that some cross subsidies could be allowed as long as the money did not come from airport take-off and landing fees.

However, this compromise seems only to have stoked doubts among some EU governments over whether the charging proposal is worth pursuing at all.

The AEA insists that it is still worth fighting for, especially after the lobby group won the European Parliament's support for an amendment establishing a right of appeal to an independent arbiter if airlines and airports remained at loggerheads over charges. It has, however, failed to win backing for a clause which would force airports to be cost-effective.