Airline Associations have challenged the charges levied by the French-owned Portuguese airport operator, ANA.
Airlines for Europe (A4E) and the International Air Transport Association (IATA) have demanded the Portuguese government endorses a way forward for lower airport charges by re-negotiating the concession agreement granted to ANA.
As part of the 2012 agreement, ANA sets airport charges according to a predetermined formula rather than taking costs into consideration. As a result, passengers and airlines at Lisbon airport have been paying at least fees 30% higher than necessary. ANA runs ten airports in Portugal.
The text of the complaint to the Commission reads, “The rationale behind the grant of the concession agreement was to ensure that ANA was attractive to investors. However, the deal was rushed through and the long-term, adverse consequences for airlines serving Portugal are increasingly apparent.”
This poorly constructed deal, argues the associations, has increased ticket costs for passengers and has damaged Portugal’s economic competitiveness.
The formula used by ANA, as agreed by the government in the concession document small print, is at odds with a key principle established by the UN International Civil Aviation Organisation, i.e. 'that airport charges should be related to the cost of providing services.'
A4E and IATA have called on the Portuguese government to re-negotiate the terms of the concession agreement to ensure a better deal for passengers.
The two associations have filed a joint complaint to the Directorate General for Competition (DG COMP) at the European Commission in a bid to support Portugal’s government in getting a better deal.
The airline associations already have complained to the EC about Portugal’s non-compliance with the European Airport Charges Directive, whose rule should have been followed.
Rafael Schvartzman, IATA’s Regional Vice President for Europe, commented, “The poor decisions of the previous government under the Troika mandate regarding the airport concession means passengers and airlines are in danger of paying inflated airport charges, damaging the competitiveness of the economy. But the good news is that we believe there are grounds to scrap the agreement and start again.
Thomas Reynaert, the Managing Director of A4E, added, “Our legal complaint seeks to clarify the situation and does not impact our desire to work with the Portuguese government to rectify the situation. We believe that there is an opportunity to ensure that passengers and airlines using Portuguese airports get a fair deal.”
“Other European governments and regulators should be alerted to the risks associated with predetermined airport concession agreements, which help airports and their shareholders increase their profitability while making a true consultation process on charges, investments and the role of the regulator redundant. Eventually, such concession agreements can prevent airlines from obtaining a proper and fair deal on airport charges – and ultimately, a fair deal for the passenger," concluded Reynaert.
Comments
I suppose when they start making those who sign these contracts personally liable for losses then things might change.
When will governments learn that when civil servants negotiate with big business, they always come off worse?