"EC to review airport pricing as airlines cry foul"

Friday, February 17, 2006

EC to review airport pricing as airlines cry foul
By Raphael Minder
Australia - The Australian


Strasbourg - THE European Commission is to launch a review of airport
pricing in response to complaints from airlines about excessive charges at
some of Europe's largest airports, including Charles De Gaulle in Paris.

European Union transport commissioner Jacques Barrot said he was considering
the introduction of European legislation to tighten control of how airports
charge airlines. 

Mr Barrot said: "We need to put some order in the way fees are charged. I
don't know yet what the best system would be, but it clearly needs to be a
lot more transparent. It seems fees are a bit arbitrary." 

The review comes amid a takeover frenzy in the European airport sector, with
BAA, which runs three of London's airports and is the world's biggest
private airport operator, facing a possible bid from Ferrovial of Spain. 

Meanwhile, airlines are trying to reduce their fixed charges at a time when
they are struggling to contain surging fuel costs. 

Mr Barrot discussed charges this week with Giovanni Bisignani, the chief
executive of the International Air Transport Association, which represents
265 airlines worldwide. 

Mr Bisignani has accused some leading airports of operating "a classic
monopoly, with no understanding of efficiency". 

As an example, he cited the "horror story" faced by airlines flying to
Charles De Gaulle airport, which has recently been granted permission by the
French Government to raise its charges by 5 per cent after already
increasing them 26.5 per cent in the past five years. 

Mr Bisignani said charges applied by European airports represented more than
half of the global bill for airlines. "We want to pay a fair deal," he said.


Mr Barrot is to hold a meeting with the main airlines and operators on April
6. 

IATA wants Brussels to create a regulator to monitor charges, along the
lines of the British regulator, but Mr Barrot said that was just one of many
options. 

"There is a problem, but whether having a new regulator is the way to solve
it, I really don't know at this stage," he said. 

Airports are expected to reject a new regulator and counter the criticism
from airlines by highlighting growing competition in the European airport
sector. 

They also argue that airlines should focus on the issue of surging fuel
costs, which now represent 25 per cent of their operational costs. 

Mr Barrot also plans to present later this year a package of legislative
proposals for the airline sector, including the inclusion of airlines in the
EU's carbon dioxide emissions trading scheme and changes to the
controversial secondary market system for airport slots. 

Slots have been an issue at congested airports such as London's Heathrow,
where British Airways has been accused by its rivals of maintaining an
unfair stranglehold on take-off and landing rights.


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