By Olivier Jankovec, Director General, ACI EUROPE
Freight traffic also appears to be surging back, and with IATA pointing to improved economic conditions for airlines, there is scope for more capacity growth in the months ahead.
All good news, even though downside risks are still there – from a rather weak economic recovery to geopolitical tensions across the Mediterranean and with Russia. What’s more, many airlines in Europe are going through painful structural adjustment processes, adding significant business uncertainty and volatility for airports.
So it was fitting that the European Commission finally clarified the rules of public financing in February, when it adopted its Guidelines on State Aid for aviation. These new rules are to be welcomed, not least because the Commission has come a long way from its initial thinking. Our unique contribution to economic development, job creation and social cohesion is recognised – as is the fact that small regional airports are structurally unable to stand on their feet. The Commission thus accepts the need for some form of financial support and also leaves the door open to the public financing of very large airport infrastructure. Finally, it has come up with much simplified rules for start-up aid given to airlines.
These are significant achievements for ACI EUROPE, as we successfully teamed up with the Assembly of European Regions (AER) and mobilised more than 50 Members of the European Parliament in support of our position.
Some of these rules will be reconsidered in 5 years’ time – so this is not the end game. But for now, the new Guidelines are striking a balance between protecting connectivity and strengthening the industry’s level playing field. Indeed, the European Commission fully acknowledges that airport competition is a reality – we cannot agree more.
Two years ago, ACI EUROPE commissioned an in-depth study into the matter, providing for the first time empirical evidence of the – significant – extent of competition between airports. This study sparked quite a debate, prompting IATA to produce its own report on airport competition. At our 6th ACI Economics and Finance Conference that took place in London in March, we moved the debate further. ACI EUROPE released a new analysis paper which looks at how regulation could better reflect growing airport competition.
This is about accepting the logic that where there is significant competition, there is no need to regulate. In situations where regulation is still needed, it should avoid disincentivising airports and airlines from finding common ground and entering into commercial contracts, just like in any other business. Aligning regulation with market reality is likely to take some more time, but it is an essential part of the normalisation of our industry. The UK and Denmark have partially moved into that direction, although we are still far from the even more flexible approach that aviation regulators are following in Australia and New Zealand.
In the coming months, we will be working on a new Economic Impact study for the airport industry, as well as on a new way of measuring and ranking the connectivity offered by each European airport. This is part of our on-going efforts to raise the societal profile of our industry – no small feat given what is at stake with (or without) airport development for Europe. Expect more about that at our Annual Congress & General Assembly next June in Frankfurt.
In the meantime, our Airport Trading Conference is about to kick off in Zurich followed by our Regional Airports Conference & Exhibition in Madeira in May. This issue of Airport Business features a fresh new look and several new features. It also brings you up to speed with some of the latest developments in travel retail, airport operations and the passenger experience. It also puts the spotlight on Kevin Toland, the CEO of DAA in Ireland. Kevin is part of a new breed of airport managers who are bringing fresh thinking and experience from other consumer-focused industries – yet another sign of airports’ transformation from B to B to B to C.
