Airports essential to economic recovery and social cohesion

Brian Simpson MEP

Simpson: “The European Parliament has been the biggest supporter of liberalisation and remains the biggest advocate of the Single European Sky.”

Brian Simpson MEP was first elected to the European Parliament in 1989. He is a Labour MEP and member of the European Parliamentary Labour Party (EPLP), which works with other socialist MEPs as part of the Progressive Alliance of Socialists and Democrats (S&D) – the second largest political group in the European Parliament. Simpson has, since 2009, been Chair of the European Parliament’s Transport and Tourism Committee (TRAN), and it is in this context that he spoke to Airport Business.
Europe’s airports are crucial generators of economic growth and jobs, and are essential for the delivery of social cohesion. Simpson sees this role becoming even more important as Europe battles through and then emerges from recession. “Without good airport infrastructure, areas will fall behind. However, in the EU our airports face a major challenge in competition from the Middle East in particular, and we ignore this at our peril,” he said.

The ‘Airport Package’ is currently at the very top of the TRAN agenda. The European Commission announced the Airport Package of legislative proposals concerning airport slots, ground handling and aviation noise, in December 2011. “All of these are controversial and are proving to be very difficult dossiers to handle,” commented Simpson.

Ground handling

The ground handling aspect of the Airport Package has perhaps been the most visible and politically contentious. ACI EUROPE has made it known that it does not support further liberalisation of ground handling services, which would put jobs at risk and also negatively impact on the performance and quality of ground operations. Following TRAN’s rejection of the new rules on ground handling at its 6 November meeting, ACI EUROPE highlighted that this “reflects the lack of sufficient attention to improving the quality and efficiency of airport operations in a meaningful and efficient manner”. ACI EUROPE has long argued that any revision of the existing EU Directive on ground handling should empower airports to set minimum service levels for ground handlers and better control over activities within the airport perimeter. This would improve the quality and performance of ground operations at airports in the interests of the passenger. Since liberalisation of the ground handling market, which was primarily a German issue, independent handlers have competed to provide these services at airports. Their market share has grown to 45%, while airports’ market share has declined to approximately 15%. The increased competition means profitability margins are thin, particularly at many regional airports where the traffic volume does not necessitate several ground handlers.

Lufthansa ground handling

Commenting on TRAN’s rejection of the proposed new rules on ground handling, Simpson said “there are serious concerns about working and social standards deteriorating when you get liberalisation – this needs to be addressed and MEPs have picked up on these issues”.

In his role as TRAN Chair, Simpson has faced a difficult job in trying to reconcile the very different positions between MEPs. Indeed, the ground handling proposal was rejected by a small majority, with 22 votes against, 20 in favour and 2 abstentions. Many MEPs feared that the proposal would lead to a deterioration of working conditions and safety, while also emphasising the lack of evidence that the regulation would increase the overall efficiency of ground handling operations. TRAN’s recommendation that the European Parliament should reject the proposal will now be tabled for a plenary vote, unless the European Commission decides to withdraw it. Simpson commented: “I’ve been trying to reconcile positions on the whole package, not just ground handling, which is why I have aged visibly in the last three months! I would have left things relatively alone, but there are serious concerns about working and social standards deteriorating when you get more liberalisation – this needs to be addressed and MEPs have picked up on these issues.”

Meanwhile, the proposed revision of common rules for airport slot allocation was approved by TRAN, with 39 votes in favour and 5 against. The aim is to ensure optimum use of take-off and landing slots, and maximise available airport capacity. Europe’s airports welcome the focus on allowing more efficient use of available airport capacity – essential as EUROCONTROL forecasts that air traffic will double by 2030/2035. However, the European Commission proposal to change the use-it-or-lose-it rule by increasing required slot usage from 80% to 85% was rejected – a clear support for incumbent airlines at congested airports. MEPs backed the idea of financial sanctions, rather than general fees, as an incentive for airlines to return unrequired slots to the pool for others to use. They also inserted a provision to prevent secondary slot trading having an adverse effect on regional airports and airlines. “Personally, I wouldn’t do too much with the slots regulation. I think the issue of secondary trading needs to be addressed, but the rest I would leave well alone. This does not seem to be the view of the majority of my colleagues, but we will see,” explained Simpson.
The third pillar of the Airport Package, noise, is fast becoming the key issue for aviation in many EU countries. Simpson was succinct in addressing the outcome of this aspect of the Airport Package: “Local rules – after that, who knows?” It was approved by TRAN, with 33 votes in favour, 10 against and 1 abstention.

In terms of the next steps, the first reading vote in the plenary of the European Parliament on the Airport Package is scheduled for December. Whatever comes out of that process will then form the basis of negotiations with the Council, which represents Member States and which together with the European Parliament acts as co-legislator.

Brian Simpson MEP

Simpson: “The fact is we need the SES to happen in order to effectively manage the volume of air traffic that we have. The Member States have not only dragged their heels on this, but they’ve dropped the anchor. The biggest challenge we have to overcome is the lack of political will at Member State level to deliver this project.”

One-bag rule

The one-bag rule being implemented by some airlines continues to have a detrimental impact on passenger rights, and is also the single biggest threat to airport commercial revenues. On average, commercial revenues now account for 48% of total airport revenues, and their resilience is key to airports’ ability to invest and modernise infrastructure. Aer Lingus’ recent attempt to follow the example set by some low-cost carriers (LCCs) appears to have been averted, but this clearly demonstrates that the problem is not likely to remain isolated to those travelling with LCCs, and there is a danger of legacy carriers following the example of the LCCs.

“Commissioner Kallas is aware of the problem,” stated Simpson. “Firstly, let me say I believe there is far too much cabin baggage full stop, and it is up to the airlines to act. However, to equate airport shopping with cabin baggage is ridiculous. Airport shopping should not be classed as cabin baggage and passengers who shop at airports should be protected accordingly.”

Window view of an aircraft taking off.

Noise is fast becoming the key issue for aviation in many EU countries. Simpson was succinct in addressing the outcome of this aspect of the Airport Package: “Local rules – after that, who knows?”

Liquids, Aerosols and Gels

As reported in the Autumn issue of Airport Business, in July the European Commission postponed the April 2013 deadline for the removal of restrictions on the carriage of liquids, aerosols and gels (LAGs), as it was ‘not operationally feasible’. The postponement was accompanied by a roadmap for the progressive removal of the LAGs restrictions, which will be determined in cooperation with European and international partners, including industry stakeholders. Europe’s airports support the revised approach, which should ultimately improve the passenger experience and safeguard the integrity of airport operations. “The new timeline is the best we can hope for. I’m not happy because I believe the ban should be lifted,” asserted Simpson. “As for Member States, they all work on the basis of risk aversion rather than risk management, which means more inconvenience for passengers and everybody scared to death to take a decision. The LAGs regulation, more than any other, has turned the airport experience from pleasurable to traumatic, especially when you add other security measures alongside it.”

Brian Simpson MEP biography

Brian Simpson MEP has represented his home region, the North West of England, in the European Parliament since 1989. He was the spokesperson on Transport for the Parliament’s Socialist Group, before being made Committee Chair in 2009. He is also a Member of the Agriculture and Rural Development Committee, where he acts as Labour Party spokesman; and the European Parliament’s delegation for relations with Australia and New Zealand.

He has been a Councillor for Merseyside County Council (1981-1986) and Warrington Borough Council (1987-1991) in the UK, and Deputy Chair of Liverpool Airport (1981-1986). He was also Private Secretary for European Affairs to UK Deputy Prime Minister John Prescott (1997-2004).

Airport duty free aisle

Commenting on the one-bag rule being implemented by some airlines, Simpson said: “Airport shopping should not be classed as cabin baggage and passengers who shop at airports should be protected accordingly.”

Single European Sky

Simpson speaks with passion about the need to deliver the Single European Sky (SES), describing it as “one of the major priorities of our time”. SES aims to triple capacity in the sky, halve ATM costs per flight, improve safety by a factor of 10, and reduce the environmental impact of each flight by 10%. Functional Airspace Blocks (FABs) are also being established to optimise the provision of air navigation services. In his keynote speech at the recent Single European Sky Summit 2012 in Limassol, held under Cyprus’ EU Presidency, Simpson was particularly critical of the failure of Member States to properly implement SES2. “Why has delivery not happened? The fact is we need the SES to happen in order to effectively manage the volume of air traffic that we have. The Member States have not only dragged their heels on this, but they’ve dropped the anchor. The biggest challenge we have to overcome is the lack of political will at Member State level to deliver this project,” he asserted. “I highlight this problem by using the FABs as a prime example. 4 December is the date that all the FABs, by law, should be up and running, and my Committee will demand and support the Commission in taking procedures in the European Court of Justice against those Member States who have failed to deliver.”

So, how does he see these issues evolving in the near future? “Very slowly, because the Member States are moving at a snail’s pace. We in the European Parliament will keep putting the pressure on and will support any legal moves the Commissioner might take. But the problem here lies full square with the Member States, which is why I’m not so optimistic.”

Simpson is similarly forthright when it is put to him that Europe still lacks a consistent aviation policy reflecting the growing strategic relevance of the sector for its economies. “I think Europe has more of an aviation policy than the individual Member States – SES, the Airport Package and bilateral agreements show this,” he said. “Granted, people might not fully agree with what is being proposed, but at least it’s something. Not one Member State I believe has a coherent aviation policy and some, including my own, pontificate on the one hand and tax the industry to death on the other.”

Passenger processing

Simpson explained that the new timeline for the removal of restrictions on the carriage of liquids, aerosols and gels is the best we can hope for. “I’m not happy because I believe the ban should be lifted,” he asserted.

Airport Competition

In June, ACI EUROPE released an independent study on airport competition, which concluded that most airports in Europe are subject to competitive constraints and that there is enough evidence to question the old presumption that airports do have market power. The study also concluded that regulation should be avoided where there is sufficient competition in place. In light of this, does Simpson believe that a fresh look is needed at the way in which airports are regulated, particularly on airport charges? “Not really. I think there is competition between major hubs and that will intensify with the Middle East. But as for regional airports, I think they are complementary to, not in competition with, the major hubs. At the end of the day, airlines will fly where the passengers are and where the capacity allows it,” he commented. “As for regulated charges, I believe there may be a need to take another look at this, because of the competition coming from outside Europe. I certainly don’t believe regional airports should be regulated.”

Regional airports have a significant role in promoting economic growth in their regions, not only via their own activities, but also by encouraging inward investment. In May, the European Parliament released its Report on the Future of Europe’s Regional Airports, which covered a number of key issues with regards to the future of State Aid for regional air services, quality and sustainability of air services from regional airports and ensuring greater competition in the sector. Meanwhile, the European Commission plans to release new guidelines on State Aid and the financing of airports in 2013.

Aviation liberalisation

The European Commission recently announced its ambitions to establish new liberalisation agreements with a range of external countries, in an effort to boost the international competitiveness of the EU’s aviation industry. To give the EU aviation industry better access to business opportunities in new markets, it is proposing to conclude EU-level air transport agreements with increasingly important aviation partners, such as China, Russia, the Gulf States, Japan, India and ASEAN (Association of South East Asian Nations) countries. The European Commission is also proposing to complete, by 2015, a Pan-European Aviation Area with neighbouring countries, such as Ukraine, Azerbaijan, Tunisia, Turkey and Egypt. The total economic benefit of all of these agreements is estimated to be €12 billion per year. “I would welcome it. However, we have to be careful that any deal is reciprocal in nature, giving benefits to the EU as well as third countries, and that the countries we are dealing with are not rogue States,” said Simpson.

An aeroplane taking off.

Simpson speaks with passion about the need to deliver the Single European Sky, describing it as “one of the major priorities of our time”. He is particularly critical of the failure of Member States to properly implement SES2.

EU ETS

Since the beginning of 2012, emissions from all domestic and international flights landing and taking-off from EU airports have been included in the EU Emissions Trading System (ETS). It applies to EU and non-EU airlines alike, and has proven a highly contentious issue. China and India have refused to comply, while the US Congress has passed legislation making it illegal for its airlines to abide by the EU rules.

“It’s going to lead to a trade war unless the Member States act urgently and we could have EU planes impounded in places like China. The EU needs to step back and give ICAO some time to come up with a global solution, which I support. If the EU wants to charge ETS over its own airspace it can, but to do it over everybody else’s is ridiculous. Frankly, this can only be resolved at governmental level and at the moment none of them have the courage to raise it in case they are seen as anti-environmentalist,” commented Simpson.

A long-time TRAN member, Simpson has seen the evolution of European aviation policy over the last 10 years – a period notable for the emergence and growth of the low-cost carriers. Meanwhile, perhaps the most significant factor internationally has been the rapid development of airlines and airport capacity in the Middle East.

“The European Parliament has been the biggest supporter of liberalisation and remains the biggest advocate of the Single European Sky. It’s not always been a success. There have been airline failures and indeed airport closures, but at the end of the day, Europe is still a big player in civil aviation. However, its position is under threat unless we deliver on projects like the SES and ensure we have sufficient airport capacity,” concluded Simpson.


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