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Airports: connectivity, services, state aid, charges

MOBILITY & TRANSPORT

The European aviation sector is a vital part of the European economy, leading globally with approximately 900 million air passengers annually. This accounts for one-third of the global market. Airports play a crucial role in this success, not only in connecting passengers and freight customers but also as significant economic drivers. In 2015, the Airports Council International estimated the total economic impact of airport and aviation-related activities in the EU at €338 billion. The sector is an 'economic multiplier,' facilitating and generating wider economic activities and supporting up to 2 million direct jobs and 5.5 million jobs in total.

Large airports, in particular, face challenges like capacity and congestion. Efficient air traffic management is essential to meet the rising demand for flights. The connectivity offered by European airports varies significantly, with some hub airports providing hundreds of destinations, while smaller regional airports offer fewer routes. Factors such as infrastructure, workforce, tax regimes, and historical, cultural, and trading links influence the success of international hub airports and airlines.

The EU is focused on improving connectivity and fostering fair competition in the aviation sector. Legislation has been adopted regarding the  allocation of slots at airports, groundhandling services, and airport charges. In 2014, the Commission introduced new guidelines on state aid in the aviation sector, ensuring support for airports in regions with specific needs and maintaining a level playing field for airports and airlines, using taxpayer money responsibly. More information about state aid in the aviation sector can be found on DG Competition's webpage.

The Connecting Europe Facility (CEF) allocates €33.7 billion from the EU’s 2021-2027 budget to co-fund key transport projects, aiming to bridge gaps in Member States' transport networks. The CEF regulation outlines the rules for EU financial support, priority projects, and limits of EU co-financing per project type.

Airports not only need to provide the necessary infrastructure for the growth and demands of the aviation system but also play a crucial role in ensuring the safety and security of the aviation chain. This comprehensive approach underscores the significance of the aviation sector in the EU's economic and social landscape.

Airport capacity and quality

​Airports play a crucial role in the European aviation system and its economy, with air traffic projected to grow significantly.

However, Europe faces a potential incapacity to meet this demand due to limited ground infrastructure. According to Eurocontrol's Challenges of Growth 2013 study, flight numbers are expected to increase by 50% by 2035 compared to 2012, but airport capacity expansion plans have been scaled back to only a 17% increase, potentially leaving 1.9 million flights and about 120 million passengers unaccommodated.

This situation also raises concerns about increased congestion and delays, with more than 20 airports potentially operating at or near capacity by 2035, compared to just three in 2012. To tackle these challenges, Europe must optimize its existing infrastructure and improve service quality and efficiency at airports. Cooperation across airlines, airports, air traffic management, and groundhandling is essential to meet the rising flight demand.

While Member States primarily manage airport infrastructure, the EU contributes by addressing common issues, updating airport regulations, and promoting investment, including through innovative financial instruments. This approach aims to foster growth, cohesion within the EU, and stronger links globally.

EU policy focuses on enhancing airport capacity where needed and ensuring high safety and service standards. The European Observatory on Airport Capacity & Quality played a pivotal role in this regard, facilitating discussions among Member States, the Commission, and aviation stakeholders to bolster national efforts on airport capacity and quality.

Three priority tasks were identified:

1. Learning from national, regional and local strategies on airport capacity;
2. Assessing any gaps in understanding the sources of airport delays in Europe; and
3. Quantifying the economic impact of unaccommodated demand due to airport capacity constraints and exploring the environmental variables influencing airport capacity.

Reports on these three issues were endorsed by the Observatory in June 2015:

• Final report of the Task Force 'Economic impact of unaccommodated demand and environmental variables influencing airport capacity'
• Final report of the Task Force 'Delays to air transport in Europe: Methods of measuring, reporting and analysing'
• Final report of the Task Force 'Learning from national, regional and local strategies on airport capacity'. Airport capacity in the EU: a strategic perspective

Slots

​Slots, or specific permissions for aircraft to land or take off at particular times, are crucial in managing airport capacity, especially as air transport has seen continuous growth. Recognizing this, the EU established rules with Council regulation (EEC) 95/93 and lastly changed in 2022, to allocate slots at busy airports, based on neutrality, transparency, and non-discrimination. These slots, managed by independent coordinators, adhere to a "use it or lose it" policy, where airlines must utilize 80% of their slots or risk losing them.

Last changes are designed to optimize airline operations by fully utilizing airport capacities:
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1. Slot Trading Enhancement: Facilitate transparent slot trading among airlines across EU airports, promoting efficiency and flexibility.
2. Market Access for New Entrants: Revise rules to empower new airlines to enter markets at busy airports, offering a robust challenge to established carriers.
3. Stricter Slot Utilization Monitoring: Enforce stringent guidelines ensuring airlines adequately utilize their allocated slots, promoting fairness and efficiency.
4. Strengthening Coordinator Independence: Enhance the autonomy of slot coordinators while boosting the transparency of slot transactions, ensuring a fair and competitive market.
5. Enhanced Information Flow: Improve communications among slot coordinators, airports, airlines, and air traffic control authorities, fostering informed decision-making and a responsive approach to disruptions, like severe weather events.

Groundhandling

​Groundhandling refers to various essential services that airlines require to operate flights, including maintenance, fueling, freight handling, passenger check-in, catering, baggage handling, and transport within the airport.

Council Directive 96/67/EC, introduced in 1997 and changed in 2003, revolutionized groundhandling in the EU by introducing competition, breaking the previously common monopolies. This shift has led to enhanced service quality, reduced costs, and more options for airlines at larger EU airports. While competition is encouraged, Member States may limit the number of suppliers for certain services like baggage handling, ensuring at least two providers, including one independent from the airport or dominant airline.

Self-handling, where airlines handle their own ground services, is also permitted under similar competitive rules. The directive's main goal, to liberalize the groundhandling market, has largely been met, with ongoing monitoring by the Commission to ensure passenger safety, comfort, and competitive pricing for airlines.

For more detailed legislative information, you can refer to Council Directive 96/67/EC of 15 October 1996 on access to the groundhandling market at Community airports and the List of airports in Member States under Directive 96/67.

Airport charges

Airport charges are fees airlines pay for using airport facilities, including for landing, handling freight, and utilizing airport infrastructure like runways and terminals. These charges, varying based on the service (per passenger or per aircraft operation), indirectly affect passengers and freight customers through ticket prices or fees.

The application and regulation of airport charges can vary significantly. While national authorities often impose or regulate these charges, even privately-owned airports must comply with authority rules. These charges also serve as management tools, allowing airports to manage infrastructure usage or mitigate environmental impacts by adjusting certain fees.

Europe's involvement stems from the need for a non-discriminatory, fair application of airport charges within the single market, ensuring competitive equity among airlines. This led to the adoption of a Directive 2009/12/EC in March 2009, aligning with International Civil Aviation Organization (ICAO) policies, targeting larger EU airports (handling over five million passengers annually) and the largest airport in each Member State. Read the 2019 Evaluation of the Directive, and its Executive Summary.

The Directive aims for:
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1. Transparency: Requiring airports to disclose cost breakdowns to justify charge calculations.
2. Non-discrimination: Ensuring airlines receiving identical services pay the same fees, allowing differentiation only based on clear, transparent criteria, including environmental considerations.
3. Consultation Systems: Mandating dialogue on charges between airports and airlines.
4. Independent Supervisory Authority: Establishing or designating authorities to resolve disputes over charges.

This framework ensures fair, transparent charging practices, contributing to the equitable and efficient functioning of the European aviation market.