As I write this article, the new EU rules governing airport ground handling services took a step closer to becoming law. They face their final hurdle when the proposal comes once again before the European Parliament on 16 April 2013. If approved by the European Parliament, the rules will provide for the further liberalisation of ground handling services and will replace current rules implemented by the 1996 EU directive (96/97/EC).
The proposals form part of a wider package of airport reforms, including a proposed regulation on common rules for the allocation of slots with the EU airports and a regulation on the establishment of rules and procedures with regard to the introduction of noise-related operating restrictions at EU airports. Both of these proposals were approved by the European Parliament in December 2012 but will not be implemented until approval can be obtained for the proposals on ground handling.
The proposals for ground handling have faced a difficult journey since they were first put forward by the European Commission in December 2011, having faced considerable opposition from certain member states and unions, in particular the European Transport Workers Federation.
The European Parliament’s committee on transport (TRAN) initially rejected the Commission’s proposals in November 2012 following protests by unions. The European Parliament then voted in December 2012 to resubmit the proposals to the TRAN committee with modifications, principally with social provisions designed to allay the concerns of the union representatives. On 19 March 2013, TRAN narrowly voted to approve the modified proposals. It is these amended proposals that will go before the European Parliament again on 16 April 2013.
The current rules, brought in by the 1996 directive, brought an end to the monopoly which existed in many airports in the EU over such things as passenger check-in, baggage handling and the provision of catering services which existed at many EU airports. They provide that, at larger EU airports, access to the market by suppliers of ground handling services is free but that for certain categories of service (such as baggage handling, ramp handling, fuel and oil handling, freight and mail handling) the member state may limit the number of suppliers to no fewer than two for each category of service.
Further, in the case of such limitations, at least one of these suppliers has to be independent of the airport or the dominant airline at that airport. Similar provisions exist with regard to self-handling, namely where airlines provide the services in question for themselves. In these cases access is essentially free but for certain categories of services the member state may limit the number of self-handling airlines to no fewer than two airlines.
Dealing with congestion
The growth in air traffic in recent years has led to airport congestion. The legal framework put in place by the 1996 directive has been found inadequate to deal with constraints in airport capacity. Problems in turning around aircraft, in part caused by inefficient ground handling services or barriers to expansion, have been found to be the source of 70 percent of the delays suffered by flights in Europe.
The main elements of the new proposals, as amended, are as follows:
* Air carriers will be free to carry out their own ground handling services.
* At large airports (these are airports handling more than 15 million passengers per year or 200,000 tonnes of freight) the minimum number of ground handling service providers, other than air carriers, will be increased from 2 to 3.
* At large airports minimum standards must be set for operational performance. This covers such things as the maximum waiting time for registration of passengers and baggage claim. In addition, minimum standards must be set in relation to the training of ground handling staff, equipment, information and assistance to passengers, safety management systems, security, and compliance with environmental requirements.
* The specific standards are to be set by member states, the airport managing body or the body controlling the airport. This is a change from the original proposal, under which the Commission itself would have set the standards.
* Service providers that fail to meet the standards set could incur penalties or be prohibited from providing further services.
* The airport managing body will be responsible for the proper co-ordination of ground handling activities.
* New handling companies and their subcontractors must continue any existing collective agreements, which may be in place with unions.
* The accounts of the airport and the ground handling operators must be kept separate.
* The implementation period for the new rules has been increased to three years after adoption (the Commission originally proposed one year) and the transition from two to three service companies can take another three years.
The threshold for an airport to qualify as a ‘large airport’ has been substantially increased from the numbers previously recommended by the Commission. This had been 5 million passengers per year or 100,000 tonnes of freight and this move will greatly reduce the scope of some of these provisions to cover only the largest airports. Smaller airports will still be required to keep it at least two handling operators.
As already noted, one of the main concerns with the new proposals was the protection of workers, especially when there is a change of service provider. Save for the provision relating to collective agreements, it was decided by the TRAN committee that any further provisions relating to the protection of workers would be left to the committee on employment (EMPL).
Leaving aside the concerns of the unions, some industry bodies consider that regulations interfere unnecessarily in the contractual relationship between ground handler and airline. They maintain that issues such as service quality and training should be the part of contract negotiations between parties rather than the subject of EU wide regulation.
It has been suggested that a diversity in airline business models, often based on different levels of service to passengers, is an essential component of the liberalisation in the transport sector. It has been further suggested that areas in which the regulation could be stronger are in the context of the criteria for tendering, as well as charging mechanisms.
On the whole, however, provided the concerns of unions and workers organisations can be met, it is believed that the new regulation, if approved, will be welcomed by the industry. By creating further liberalisation of airport ground handling services, the regulations should also lead to an increase in both competition and airport capacity.
For customers, the benefits will be seen in both pricing and in the standards of service provision which, coupled with increased capacity, should lead to a reduction in flight delays. Further, unlike the 1996 directive, the regulation will be directly and uniformly applied across the European Union.
By the time this article goes to press we should know the outcome of the debate scheduled to take place in the European Parliament on 16 April and whether the regulations will be finally, implemented. An update on the debate and on implementation of the regulations will be provided in the next issue of Airline Ground Services.