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THE SOCIAL IMPACT OF THE PROPOSED EU REGULATION ON GROUND HANDLING. Christoph Köppchen , Manager Economics. 31 May 2012 European Parliament , EMPL Hearing. ACI EUROPE MEMBERSHIP. REGULAR MEMBERS: 180 - Number of Airports operated: 405
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THE SOCIAL IMPACT OF THE PROPOSED EU REGULATION ON GROUND HANDLING Christoph Köppchen, Manager Economics 31 May 2012EuropeanParliament, EMPL Hearing
ACI EUROPE MEMBERSHIP REGULAR MEMBERS:180 - Number of Airports operated: 405 -Countries: 46 WORLD BUSINESS PARTNERS:155 National Airport Associations:8 2
GROUND HANDLING – THE NEED FOR A GOOD QUALITY OF SERVICES • WHAT IS CONSIDERED AS ‘GROUND HANDLING’? • Passenger and baggage handling: check-in, baggagedelivery • Freight & Mail handling; Ramphandling (aircraftmarshalling and loading) • Fuel & Oil • Cleaning, Catering, Aircraft maintenance, etc. No Ground Handling: Security, PRM, Customs • WELL-PERFORMING GH OPERATIONS ARE KEY! • Complexand interdependentoperationsatairports • Quality & costs of GH services = competitiveadvantage…or disadvantage! Under-performance: Delays and inefficiencies in the whole network!
THE GROUND HANDLING MARKET TODAY • A COMPETITIVE MARKET AT EU AIRPORTS • Most GH categories: Fullyopenedat all EU airportsabove 2 mio. pax • 4 categories (ramp, baggage, fuel, freight): • Minimum number of 2 handlersatairports > 2 million pax • Self-handling: Minimum number of 2 licences atairports> 1 mio. pax Space, efficiency and safetyconsiderations! • INDEPENDENT HANDLERS DOMINATE THE MARKET Sources: EuropeanCommission, KPMG and ACI EUROPE.
GROUND HANDLING – THE SOCIAL IMPACT OF THE EXISTING DIRECTIVE 1996/67 • GROUND HANDLING = LABOUR-INTENSIVE SEGMENT • 65-80% of GH costs are staff costs • Competition on price= wages/social conditions • THE EFFECTS OF COMPETITION SINCE 1996 • Prices of Ground Handling services: ca. -25% • Low-margin business in a highlycompetitiveenvironment • Pressure on working conditions of staff & qualityof service • COLLABORATION OF SOCIAL PARTNERS AT EU LEVEL • Joint Statement of three out of four Social Partners in April 2011
THE COMMISSION PROPOSAL: IMPACT ON SOCIAL CONDITIONS • FURTHER LIBERALISATION OF THE GH MARKET • Minimum number of threeGroundHandlersatairportsabove 5 mio. pax • Full opening of the self-handling market Increased pressure on prices & working conditions • SOCIAL SAFEGUARDS IN THE PROPOSAL • Clarification on the possibility to have national laws on transfer of staff • But: No obligation for a bindingtransfer of staff at national level Insufficient social safeguards in the proposal • TRAINING REQUIREMENTS FOR STAFF • Minimum training of 2 days for staff in GroundHandling Progress, but one weekwouldbepreferable
THE COMMISSION PROPOSAL – OTHER KEY AREAS • MINIMUM SERVICE STANDARDS • Key to ensure efficient operations at the airport • Regulation introduces right for airport to set standards Important improvement, but need to ensure enforcement • COMPETITIVE DISADVANTAGE FOR AIRPORT HANDLERS • Legal separation of airport handlers/CI: Counter-productive • No sub-contracting for airports, but allowed for all 3rd party handlers Problematic: No level-playing field for GH services • ADMINISTRATIVE BURDEN • New procedures for Centralized Infrastructure & ReportingProblematic and disproportionate, added value unclear
CONCLUSIONS: PRIORITIES FOR THE LEGISLATIVE PROCESS • FOCUS ON QUALITY OF SERVICE OF GH SERVICES • Provideairportswithtoolsto set minimum standards • NO DOGMATIC APPROACH TO MARKET LIBERALIZATION • Keep provisions of existingDirective: Decisionat national level! • INTRODUCE STRONGER SOCIAL SAFEGUARDS • Introducebindingtransfer of staff in Art.12 • Increasetraining requirements • TAKE INTO ACCOUNT THE OPINION OF SOCIAL PARTNERS • Improvements to tender procedure, length of licence and social clause