Is the EU’s Airport Charges Directive fit for purpose?

posted on 7th November 2019 by Eddie Saunders
Is the EU’s Airport Charges Directive fit for purpose?

Almost totally subject to the regulation of national authorities, airport charges are a form of taxation that an airport imposes on the airlines that use its spaces. These cover use of runways, passenger terminals and similar services.

GlobalData Airport Technology says: “although technically imposed on airlines, these charges inevitably affect their customers, namely passengers and freight companies. However, the fact that they are not established as a result of a competitive market – meaning that overall, it is an airport and its state’s discretion to set them – has long been a cause of controversy.

“The loudest opponent of this practice is the International Air Transport Association (IATA), which claims almost 60% of air passengers in Europe travel through only 25 airports, which have, therefore, stronger power than most hubs in the continent.

“In March 2009, the European Commission (EC) established the Airport Charges Directive (ACD), a legal act setting a common framework for the regulation of airport charges across the European Union member states. This concept was once again reiterated earlier this year, when the ACD underwent a comprehensive review and final evaluation, concluding that the ACD indeed provided guidance on the way airport charges are set, it also emerged that over the past decade, the directive has only partially achieved its targets.”

“There are still many airports that can charge prices that would otherwise not be achieved in a competitive market. As of today, the Directive has not been effective in achieving its objectives, because it has not been able to harmonise the regulatory frameworks on airport charges within the EU and to eliminate the consequences of airports misusing their significant market power.” Says IATA’s director of airport infrastructure and regulatory affairs Andrea Waechtershaeuser. 

IATA proposes the Airport Charges Directive to be changed into an Airport Charges Regulation, which “would avoid that states apply different interpretations of the ACD into their national law by instead defining the role, mandating the powers of the independent regulator and the possible types of regulation for airports with significant market power.”