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EU proposes airport-fee controls to limit costs for airlines

European Union regulators demanded controls on airport fees in response to concerns that airlines are being overcharged.

The European Commission presented a draft law that would force airport operators to consult carriers about planned fee increases and justify them. The proposal would also require airports to give airlines a breakdown of costs and create an independent body in each member state to enforce the new rules. „The entire aviation supply chain should become as competitive as possible,” the commission, the 27-nation EU's regulatory arm, said in a statement today in Brussels. „Airport charges are an important link.” The draft legislation, which covers fees for activities such as landing, taking off, parking and checking in passengers, needs the support of EU governments and the European Parliament. The goal is „to moderate prices at airports” and „prevent excessive increases in charges,” EU Transport Commissioner Jacques Barrot told reporters today in Brussels.

The proposal would create the first EU-wide regulation of these charges, which so far have been covered by national rules. It's a response to airline complaints about the level of airport fees, which account for between 4% and 8% of the operational costs of the main European carriers. Europe is home to 15 of the world's 25 most expensive airports, including Athens, Paris and Frankfurt, according to the International Air Transport Association. European airports are prone to increase charges because most are state-owned and governments planning to sell shares in the businesses are keen to make them more attractive to investors, the commission said.

„This is a step in the right direction,” said Francoise Humbert, a spokeswoman for the Association of European Airlines representing network operators such as Air France-KLM Group, Deutsche Lufthansa AG and British Airways Plc, Europe's three biggest carriers. „We would have liked more.” The draft law stops short of airline-industry demands for a cap on airport fees. The commission also shied away from the industry's calls for a requirement that airports take into account revenue from non-aeronautical activities when setting charges for carriers. Instead, the draft law would create common principles for the setting of charges along with a system for consultations, information exchange and dispute settlement. The new rules would affect airports with more than 1 million passengers or 25,000 metric tons of cargo a year. Airport operators would be required to give airlines a list of fee-based services, the method for calculating charges, the overall cost structure of the business and forecasts of charges, traffic growth and investments. Carriers would have to furnish airports with projections of traffic, fleet and development projects and outline their needs.

In the case of a disagreement about charges or other matters, either side would be able to file a complaint to the proposed independent national regulator, whose rulings would be binding. Separately today, the commission said it may make proposals to strengthen an existing EU law on competition in ground services such as baggage handling at airports. In a report on the effectiveness of the 1996 market-opening legislation, the commission cited shortcomings including entry barriers at some airports where the state-owned operator is also a ground-services provider. In addition, the commission gave an overview of plans for tackling airport congestion. Warning about a „capacity crunch” that threatens profitability and safety, the commission outlined actions ranging from the creation of an observatory on airport planning and the encouragement of integrated air-rail ticketing to the consideration of new aircraft-noise rules and the development of traffic-control technologies. Without „drastic” increases in capacity, more than 60 European airports will be „heavily congested” and the top 20 airports will be „saturated” at least eight hours to 10 hours a day by 2025, the commission said. (Bloomberg)