IATA has called on the European Union to
significantly strengthen economic regulation of major European
airport monopolies by focusing on the interests of passengers.
Enforcing greater cost-efficiency at Europe’s airports will feed
through into cheaper air fares, stimulate travel and enhance
European competitiveness. In turn, this will support jobs and grow
The case for stronger airport charges regulation
is seen in how European passengers have been denied the full
benefits of cheaper air travel, as illustrated over the period
2006-2016 in a just-released IATA study:
- The average cost of an air ticket remained
virtually the same (including all ancillary charges such as hold
- The revenue portion of the ticket price for
airlines fell from 90% to 79%
- The portion of the ticket price taken by the
airport doubled. Passenger taxes also doubled.
Had airport charges remained constant over the
2006-2016 period consumers could have benefitted, on average, 17
Euros per one-way trip. That price stimulus of nearly 10% of
average tickets costs would have improved Europe’s
competitiveness, and potentially generated an additional 50
million passengers. In turn that would have unlocked 50 billion
Euros in European GDP and created 238,000 jobs.
"Airlines, like all competitive businesses, are
in a constant struggle to improve efficiency," said Alexandre de Juniac
(pictured), IATA’s Director
General and CEO. "Europe’s airports however are largely insulated
from competitive forces. Europe’s light-handed Airport Charges
Directive has failed Europe’s travelers and its own
competitiveness by letting airport charges rise. Tighter EU
regulation is needed to stop airport monopolies from taking money
from the pockets of travelers to reward investors. The goal should
be economic regulation of airport monopolies that is an effective
proxy for competition—promoting efficiency while protecting
consumers. In that regard the voice and interests of airlines –
airports’ main customers - should be carefully listened to. This
will ensure effective regulation that will broadly balance the
interests of travelers, investors, citizens and economies."
The trend of increasing private ownership of
European airports adds urgency to the situation. Since 2010 the
number of European airports in private hands has almost doubled.
"In many cases privatization has failed to deliver promised
benefits to passengers and the local economy often suffers the
results of higher costs. The balancing role of effective and
strong economic regulation is essential," said de Juniac.
In its Aviation Strategy, the European
Commission has identified the need to boost the efficiency of
airport services and has engaged in an assessment of whether and
how the Airport Charges Directive needs to be reviewed.
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