Kinnock takes tough line on groundhandling

Date: 15/04/1999

By Renée Cordes

THE European Commission is set to order airports in Paris and Berlin to open their groundhandling services to outside competitors.

The move, due to be announced later this month, is the latest chapter in Acting Transport Commissioner Neil Kinnock's battle to force airports across Europe to comply with EU legislation, designed to liberalise the sector, which entered into force last year.

Kinnock's aides say the institution will allow both Charles de Gaulle and Tegel airports to retain their monopolies in sections of their premises where there are space or capacity limitations. However, officials stress that exemptions from the rules will only be granted in very specific circumstances. "There is no reason to limit access to the market," said one. "We will grant derogations, but only to a very limited extent."

The two airports at the centre of the investigation have, like many others, formally asked the Commission for exemptions from the legislation, which requires EU airports to accept at least one competitor for groundhandling services including aircraft refuelling and loading and unloading cargo and luggage. The law was introduced in response to complaints that the services provided were often poor and costly.

Although airports have agreed to the directive in principle, several have asked for delays. "Some airports obviously want to protect current positions," said Chris Castles, a partner at accounting firm PriceWaterhouse Coopers in London who specialises in air transport. "But there are also difficulties for countries like Germany or Italy with staff in place under government contracts, which is quite expensive to disentangle."

The Paris airport authority, which is in charge of coordinating groundhandling at Charles de Gaulle and other facilities, insists that it has opened its operations to outside competitors.

However, officials concede that the airport has refrained from doing so in a particular terminal used by numerous small charter airlines. "In one small terminal where there are so many charter airlines, it would be difficult to allow them to do their own handling," said a spokeswoman. "As far as security and safety are concerned, we prefer that there not be too many companies."

In Germany, Tegel and other airports also argue that the rules are impractical because of capacity constraints. Critics claim that handling charges in Germany are among the highest in Europe, which are already some 30% more expensive than in the US.

The airline industry says it is not surprised by the number of requests for derogations. "When the directive was formulated and included a possibility for exemptions, we warned that this would simply be used as a means of postponing the inevitable," said David Henderson of the Association of European Airlines.