Better airports The 2011 Airport Package

1.  Better airportsThe 2011 Airport Package

2. Content • The communication ‘Addressing capacity and quality to promote growth, connectivity and sustainable mobility’ • Revision of Groundhandling Directive • Revision of Slot Regulation • Revision of Noise Directive

3. Airports are a vital part of our aviation system and economy Almost 800 million passengers used EU airports in 2010, a third of the world market, almost three times more than when air traffic was liberalised in the early nineties Yet competition is increasing. Over the next five years, air transport growth will be driven mainly by regions like Asia Pacific, the Middle East and Latin America  EU airports in a fast-changing world

4. EUR-hubs are geographically well located …but the (competitive) world is changing Inter-regional routes (isodistance lines at 9500 km) DXB IST AMS JFK BJS

5. RANK CITY CODE TOTAL PAX% CHANGE RANKING2009 1 ATLANTA GA, USA ATL 89 331 622 1.5 1 2 BEIJING, CHINA PEK 73 948 113 13.1 3 3 CHICAGO IL, USA ORD 66 774 738 4.1 4 4 LONDON, UK LHR 65 884 143 (0.2) 2 5 TOKYO, JAPAN HND 64 211 074 3.7 5 6 LOS ANGELES, USA LAX 59 070 127 4.5 7 7 PARIS, FRANCE CDG 58 167 062 0.4 6 8 DALLAS/F.W., USA DFW 56 906 610 1.6 8 9 FRANKFURT, DE FRA 53 009 221 4.1 9 10 DENVER CO, USA DEN 52 209 377 4.1 10 Source: ACI  TOP 10 WORLD AIRPORTS BY PAX IN 2010Total passengers: arriving and departing passengers; direct transit passengers counted once

6. RANK CITY PASSENGERS% CHG REG WORLD RANK 1 ISTANBUL SAW 11 598 026 74.7 EUR 121 2 CAMPINAS 5 591 163 57.8 LAC 212 3 RIO DE JANEIRO 7 833 588 53.5 LAC 175 4 CHARLEROI 5 182 168 31.7 EUR 229 5 MOSCOW SWO 19 329 185 30.9 EUR 68 6 BELO HORIZONTE 7 599 323 29.5 LAC 178 7 BOGOTA 18 762 502 26.8 LAC 72 8 PHUKET 7 313 783 26.5 ASP 185 9 SHANGHAI 40 578 621 26.4 ASP 20 10 MUSCAT 5 751 516 26.2 MEA 209 11 ANKARA 7 788 214 25.9 EUR 176 12 ST PETERSBURG 8 443 753 24.9 EUR 160 13 MEDAN 6 189 575 24.9 ASP 202 14 SHANGHAI 31 298 812 24.8 ASP 41 15 MILWAUKEE WI 9 848 377 24.1 NAM 133 16 COLOMBO 5 259 648 24.0 ASP 226 17 SÃO PAULO 27 432 346 22.8 LAC 47 18 MASHHAD 5 920 416 22.5 MEA 206 19 MOSCOW VKO 9 460 292 22.4 EUR 138 20 HA NOI 9 519 839 21.5 ASP 135 21 FORTALEZA 5 441 732 20.6 LAC 220 22 IZMIR 7 518 333 20.2 EUR 182 23 ANTALYA 22 078 962 20.0 EUR 60 24 HURGHADA 8 059 849 19.8 AFR 170 25 DOHA 15 863 053 19.5 MEA 92  TOP 25 FASTEST GROWING AIRPORTS IN 2010(WITH OVER 5 MILLION PAX)

7. By fostering their competitiveness so as to raise their profile as providers of air services and job engines This can be done by addressing two key issues: capacity and quality  How to secure EU airports’ growth?

8. Europe’s major airports are facing a capacity crunch Air traffic in Europe will nearly double by 2030. Yet Europe will not be in a position to meet large part of this demand due to a shortage of airport capacity (10% of predicted demand) 19 European airports will be operating at full capacity every day meaning 50% all passengers and cargo flights affected by delays Tripling capacity in the air will be pointless without matching capacity on the ground Airport capacity must be optimised and where possible increased. Also, noise restrictions should be proportional to the identified noise problem  Capacity

9.  FORECAST AIRPORT CONGESTION 9 |

10. SOURCE: STUDY PREPARED BY STEER DAVIES GLEAVE 'IMPACT ASSESSMENT OF REVISIONS TO REGULATION 95/93

11. Today almost 3 out of 4 flight delays are due to the turn around of aircraft at airports (delays caused by airlines or their groundhandlers, airports or other parties involved in the turn around process) The groundhandling market has become increasingly dynamic but is still not efficient enough The overall quality of groundhandling services has not kept with evolving needs especially in terms of reliability and resilience, safety and security Disruptions experienced have shown the need for increased coordination of ground operations for European airports and the network as a whole (knock-on effects)  Quality

12.  Conclusion • There is a shift in the global aviation market • Half of the world’s new traffic added during the next 20 years will be to, from, or within the Asia Pacific region. The highest growth will be seen within China (78 new airports by 2020) • Europe can do much for its air transport system especially by enhancing the efficiency of each link of the aviation chain • Airports should no longer be viewed in isolation but as part of a truly European airport network

13. Groundhandling services Proposal for revision of Directive 96/67/EC

14.  The groundhandling services market Groundhandling services • All services at airports carried out for individual airlines (check-in, baggage handling, refuelling…) Some estimates • Revenues of groundhandling: EUR 50 billion worldwide • Employment: at least 60,000 persons in Europe • Costs linked to groundhandling services for airlines represents 5 to 12% of operating costs

15. Directive 96/67/EC adopted in 1996 Full opening to competition for the majority of the groundhandling services Possibility to limit competition to minimum of two suppliers for four important categories (“restricted services“) (baggage handling, ramp handling, fuel and oil handling, freight and mail handling) Progress made Increased number of suppliers and new providers General decrease in prices Increase in quality (according to airlines) Degree of competition in restricted services and access regime varies significantly across Member States  The current groundhandling services Directive

16. Consultation of stakeholders, December 2009 – February 2010, 103 respondents to questionnaire: Airport operators (31% of respondents) Airlines (23%) Independent groundhandlers (16%) Workers’ organisations (6%) National and regional government (14%) Consultation indicated that further improvements of groundhandling services are necessary: Problems of efficiency and quality (reliability, resilience, safety and security, environment)  Why change?

17.  Improving Efficiency • Ensure that airlines have an increased choice of groundhandling solutions at EU airports • Full opening of the self-handling market for airlines • Increase in the minimum number of service providers to three at large airports • Harmonise and clarify national administrative conditions on market entry • Mutual recognition of approvals with harmonised requirements • Ensure a level playing field at airports between groundhandling companies operating under different regulatory regimes • Better management of centralised infrastructures • Legal separation of airports’ operators from their groundhandling activities • Improved tender procedure

18.  Improving Quality • Increase coordination between groundhandling providers at the airport • Clarified rules for subcontracting • Recognised role of the airport managing body in the coordination of ground services (including by setting minimum quality standards) • Reporting on the performance • Clarify the legal framework for training and transfer of staff • Compulsory minimum training for staff • Possibility for Member States to impose a requirement to take over staff with same conditions where there is a tender procedure

19.  Conclusion • Balanced proposal taking into account the interests of different stakeholders (airlines, airports, independent groundhandlers, employees) • Gradual further market opening but additional safeguards to protect interests of employees • Significant number of measures targeting quality improvements

20. The Airport Slot Regulation Proposal for revision of Regulation 95/93

21. The current system – brief reminder • Slot definition:the permission given by an independent coordinator to use the full range of airport infrastructure necessary to operate an air service at a coordinated airport • Example for a slot:permission given by an independentcoordinator to land/take off at8 o’clock, every Monday during 5 weeks period, at Heathrow Airport • Two seasons in aviation (summer and winter)

22. The currentsystem: basic principles • Based on the IATA Worldwide Scheduling Guidelines: an administrative system for slot allocation • Currently there are 89 fully coordinated airports (the EEA Member States plus Switzerland). Of these airports, 62 are coordinated year-round, and 27 are coordinated seasonally • Trading of slots has originally developed in United Kingdom (US$209 million for four daily slot pairs at Heathrow in 2008) • Communication from the Commission from 30 April 2008 - no infringement procedure against Member States in which trading of slots occurred if such trading took place “ in a transparent manner”

23. Main proposals 1/4 • Introduce a uniform framework for secondary trading • Obligation for Member States to allow secondary trading at their airports • Pre-trade transparency to be guaranteed by the Member State • Post-trade transparency (name of air carriers, traded slots and price) to be ensured by the slot coordinator, confidentiality respected; Commission or Member State can have access; aggregate data to be published by the coordinator

24. Main proposals 2/4 • Strengthen the new entrant rule to allow stronger competitors to enter the market • The maximum number of slots to be held is changed from 5 to 9 slots/day to a specific route • Priority for intra-EU routes is maintained • New provisions on abuses of the rule are introduced • Strengthen the independence of the slot coordinators and the transparency of slot data • Organisational and functional independence of slot coordinators + financial independence • Requirement on slot coordinators to publish more data in online databases, keep historic data for at least 5 years and present annual reports to the Commission

25. Main proposals 3/4 • Increase the length of the slot series from 5 to 15 for the summer scheduling period and to 10 for the winter scheduling period; exception introduced for air services of strong seasonal demand (charter air carriers) • Increase the slot utilisation threshold from 80% to 85% (« grandfathered rights »); bank holidays are not counted against the 85/15 rule but slots need to be returned to the slot pool well in advance

26. Main proposals 4/4 • Introduce mechanisms to discourage the late return of slots to the pool (sanctions or modulation of airport charges to take into account the cost of reserving airport capacity without using it) • Link the slot allocation with the Single European Sky • Creation of « network airports » (vital for the resilience of the air traffic management network) • Stricter procedure for the capacity assessment • Enhanced role for the coordination committee • Strengthened rule on consistency between flight plans and slots

27. Conclusion The measures proposed: • Would lead to 23.8 million additional passengers (annual average for 2012-2025) • Net economic benefits around 5 billion euro and 62,000 new jobs for 2012-2025 Photo: Courtesyof: Gerd Renenich, Lufthansa

28. Towards better rules on airport noise management Proposal for revision of Directive 2002/30/EC

29. Weaknesses in noise decision-making Safety jeopardized • Noise mitigating measures not always integrate safety aspects Knock on effects on aviation network • Noise measures may reduce capacity – especially in already congested airports • Additional airborne holding and delay Land use planning failure Creeping encroachment Not integrated in noise management process • Rigid rules • Measures may exist for too long before review • New air traffic / aircraft capabilities may not be exploited

30. Why do we have to act? • EU citizens affected by nuisances caused by air traffic noise may rise from 2.6 million in 2006 to 5.8million in 2036 • Pressure for noise-related operating restrictions will increase – decided at local level – but EU wide impact. We need RESPONSIBLE decisions • Enhance transparency on: • - Type of aircraft which can be phased-out • - Noise assessment process (including Commission check PRIOR to implementation)

31. What do we propose? • Adhere to internationally recognised principles (ICAO) • Consistency in method • Support noise management in EU airports • Revise outdate definition of marginally compliant aircraft • Bring in line with other European legislation • Environmental noise directive • Slots – SES/performance – SESAR • EU – US : Right of scrutiny – consultation – temporary suspension • Support the implementation • Improve noise mapping • Administrative support

32. Thank you for your attention Photo: Courtesy of: Gerd Renenich, Lufthansa