EU airport charges Directive: IATA and ACI differ on evaluation report


The European Commission's Airport Charges Directive of 2009 (the Directive) established a common framework for the regulation of airport charges in the EU and ECAA (European Common Aviation Area).

In Jul-2019, a decade on, the Commission published an evaluation of the Directive in order to assess whether it needs to be reviewed. It applies to airports with at least five million annual passengers or, where there is no such airport, to the largest airport in each member state.

In 2009 the Directive covered 68 airports, handling 75% of passengers in Europe. In 2017, 89 airports (of which 83 in the EU) were covered, handling 85% of passengers. From 2009 to 2017 passenger numbers at the airports covered grew by 55.2% - from 1.0 billion in 2009 to 1.5 billion in 2017 - versus a 38.5% increase in total passenger numbers in Europe (data from the Commission's Jul-2019 report).

Compared to the hypothetical situation where the Directive did not exist, the overall conclusion of the evaluation is that it has led to improvements in the setting of airport charges, although it has not fully met its original objectives.

Perhaps not surprisingly, the airline representative body IATA and airport representative body ACI Europe reacted very differently to the evaluation report.


  • The Directive aimed at two main issues: airports extracting higher prices than in a competitive market, and diverging systems/lack of transparency.
  • It has four specific objectives to tackle the issues. The Jul-2019 evaluation of the Directive had five evaluation criteria.
  • The overall conclusion was that the Directive has led to improvements in the setting of airport charges, but that it has not fully met its objectives.
  • IATA's response to the evaluation was that stronger regulation is needed, while ACI Europe's response was that less regulation is needed.

Airport Charges Directive of 2009 aimed at two main issues

The Directive sought to address two main issues:

One was the possibility that some airports could extract prices and terms that would otherwise not be achieved in a competitive market.

The second was the existence of diverging charging systems in member states and a lack of transparency in how they are developed.

And there were four specific objectives

The Directive has four specific objectives:

(i) to ensure fairness in the process of setting charges;

(ii) to contribute to fair competition between EU airports through a common framework and principles for charging;

(iii) to promote more transparent charging systems applicable to users of airport infrastructure; and

(iv) to generate and maintain sufficient revenues to sustain and complete airport infrastructure at an optimal level.

The EC evaluation of the Directive had five evaluation criteria

The report published by the Commission in Jul-2019 set out five evaluation criteria against which to assess the Directive.

These were its relevance, effectiveness, efficiency, coherence and EU added value.

The report reached the overall conclusion that the Directive had led to improvements in the setting of airport charges compared with the hypothetical alternative of no such Directive, but that it had not fully met its objectives.

Relevance: yes, but there are some inconsistencies

Concerning relevance, the report concluded that the two issues underpinning the Directive still persist, but the issue of diverging charging systems and a lack of transparency is now seen more as a problem driver rather than an issue in itself. The specific objective of transparency should not be a final objective but a means to achieve one.

The issue of some airports being able to extract higher prices than would be achievable in a competitive market is still relevant, according to the Commission, albeit on a smaller scale.

However, the report found that the specific objectives of the Directive insufficiently reflect this problem.

Airport competition has increased…

Since the inception of the Directive, competitive pressures on European airports have increased.

Small and regional airports have always faced competition and this has grown. Moreover, competition now embraces medium sized and larger airports, thanks to LCC expansion, the emergence of big multi-hub legacy airline groups, and the rapid growth of some non-European airlines with global networks.

The report did not examine the competitive situation of individual airports, but noted that member state analyses had found significant market power at Amsterdam, London Heathrow, London Gatwick and Dublin.

Beyond these four airports, the report found no conclusive evidence of significant market power at other EU airports, since no other market power assessments have been carried out.

The Commission's evaluation highlighted an additional issue: at airports where there is an airline with strong buyer power, there is a possible risk that the process for setting airport charges could lead to additional barriers to entry for airlines seeking to launch new services at the airport.

However, there is limited evidence on this issue.

…and consumer interests are not fully taken into account

Another issue brought to light by the evaluation is that the interests of consumers - whether passengers or air freight owners - are not explicitly included in the Directive's objectives and, as a result, are not properly taken into account in some circumstances in the setting of charges.

Effectiveness: yes, but it could be better

Turning to the effectiveness of the Directive, the evaluation found progress towards all its objectives. However, different measures taken in different member states make it difficult to separate the Directive's impact precisely.

The Directive's common framework for setting airport charges has contributed to greater transparency and fairness in the process. However, it could have been more effective with more detail on consultation and transparency requirements.

The report found that the Directive's effectiveness in dealing with the risk of airports charging above competitive levels had been hit by leaving to member states decisions on the independence, powers and duties of the airport charges regulators in each country, known as Independent Supervisory Authorities or ISAs (particularly where aspects of airport charges are fixed by the member states themselves).

Nevertheless, it was unable to draw any conclusions about whether any EU airport had misused any significant market power.

The Directive has not had any significant impact on airports' ability to invest, and its lack of specifics in this area potentially limits its effectiveness.

There has been an increase in the differentiation of charges across EU airports, mainly driven by LCC requirements and also by more incentive schemes offered by airports to support traffic growth. There is some disparity in the application of the non-discrimination requirement in the Directive.

Efficiency: yes, but not quantifiable

With respect to efficiency, the evaluation found that the Directive had led to additional costs for industry participants and national administrations, but it was not possible to quantify the full cost of the Directive, nor its benefits. It might have been more efficient if it had better targeted airports with significant market power.

The report suggests that the overall benefits of the Directive exceed its costs.

Coherence: mostly

According to the report, the Directive is generally coherent with other EU airports legislation, particularly on slots and state aid.

However, there is an internal incoherence between its non-discrimination provision and the provision whereby member states are not required to seek the intervention of the ISA at airports where the ISA sets or approves maximum charge levels.

EU added value: likely, yes

The evaluation concludes that "it is likely that the Directive has added value relative to what would have occurred in the absence of EU level action".

Without it, it is likely that member states would have continued applying their own regulatory systems or continued to have no rules in place at all.

IATA's response: stronger regulation is needed

The Commission's evaluation of the Airport Charges Directive received a mixed response. Perhaps not unexpectedly, bodies representing airlines and airports took different positions.

The airline trade body IATA welcomed the evaluation's highlighting of the need to strengthen the Directive to protect consumer interests. However, IATA claimed that "many airports are able to charge prices that would not otherwise be achieved in a competitive market" - an assertion that is neither supported nor dismissed by the evaluation, which seems to go out of its way to avoid firm conclusions.

For IATA, there are three key lessons from the evaluation of the Directive.

First, consumers need to be at the heart of the issue, since they benefit from the pass-through of reductions in airport charges.

Second, the Directive's effectiveness depends on stronger powers for regulators and third, the risk of airports abusing their significant market power remains.

IATA called for an impact assessment of the Directive by the Commission to analyse the best approach to achieve its objectives. It argued that strengthening the Directive and targeting economic regulation would play a major role in protecting consumers and building a more efficient transport system.

ACI Europe's response: less regulation is needed

The airport representative body ACI Europe focused on the evaluation's finding that competitive pressures on airports have growth since the adoption of the Directive, using this to support its view that airports in Europe are generally not in a position to misuse any market power they may have.

"Indeed", said ACI Europe in a press release, "the report does not validate airlines' tired allegations that airports exhibit excessive profitability levels, that they overcharge for the use of their facilities and that the 'dual till' system reflects excessive market power".

Instead, ACI continued, the report points to airlines' ability to use their power over airports to block or delay investment in capacity or quality, limiting airline competition and resulting in higher fares.

By contrast with IATA's call for stronger regulation, ACI Europe argues that the best way to allow markets to operate efficiently is for regulators to step back, allowing commercial entities to resolve their own agreements under the protection of the EU's "robust" competition rules.

Conclusion: compromise ahead

The reality probably lies somewhere between the views of IATA and ACI Europe - suggesting a reasonable outcome.

ACI's hope for reduced airport charge regulation and relying on the more broadly applicable competition rules is not going to be fulfilled.

One of the original motivations for the Airport Charges Directive was the view in the Commission that there needed to be an ex ante means to regulate airport charges, whereas competition rules only have teeth ex post.

The tone of the evaluation, while carefully avoiding making any firm statements not supported by rigorous data and analysis, very clearly points towards stronger and more detailed regulation of airport charges.

However, it is also clear that there is more competition between airports than in the past. Moreover, there are some instances where individual airlines can exert significant power over an airport.

IATA highlighted the need for more explicit consideration of consumer interests in airport charge regulation. It is difficult to dispute that, but it is worth remembering that airlines are not the end user, and their interests do not always align with those of consumers.

As is often the case with EU regulation, the next step will be further analysis. As is also often the case, the final outcome will be a compromise. This will probably mean little fundamental change to airport charge regulation but, perhaps, greater consistency across member states, particularly in the role and powers of ISAs.

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