Brussels throws lifeline to regional airports

Brussels will continue to allow regional airports handling less than 700,000 passengers a year to tap public coffers for vital financial support, writes Aimée Turner.

In reviewing state aid guidelines, the European Commission has effectively abandoned its original proposals to limit operating aid to airports handling a much lower threshold of 300,000 passengers a year. Critics claimed this could have led to the closure of a significant number of airports across Europe.

The decision follows a two-year review process that will shape the public funding of EU airports in the years ahead.

European airport trade body ACI Europe together with the Assembly of European Regions applauded the decision, insisting that while European airports operate in a highly competitive market, smaller airports are structurally unable to sustain themselves.

“This is due to a combination of high fixed costs, limited access to non-aeronautical commercial revenues and lower yields compared to larger airports. As a result, clearer rules have long been needed to allow these airports to receive support where really necessary – particularly given it was widely acknowledged that the preceding guidelines could not be enforced effectively,” they said in a joint statement.

Olivier Jankovec, director general of ACI Europe said: “European airports compete tooth and nail to retain and attract air services and these much awaited new guidelines provide a level-playing field upon which to do so. As well as serving the industry, these guidelines should be implemented in a way that better secures the many economic and social benefits associated with air access in the EU.”

The two industry bodies also noted that a new safety regulatory framework established by the European Aviation Safety Agency (EASA) will include new requirements and duties for regional airports and thus impact their operating costs even further.

They do claim however that the Commission has fallen short of providing the long-term legal certainty needed for these airports and their communities – as it intends to reassess this stop-gap measure in five years’ time.

“We believe the Commission has taken a sensible approach to a sensitive issue,” added Fabio Gamba, chief executive of the European Business Aviation Association. “This measure not only fine-tunes and provides greater clarity on the application of state aid, but it also offers a level of flexibility for the small regional airports that are most dependent on these funds. As primary users of regional aerodromes, the business aviation sector has always argued that small regional airports hold intrinsic value for local communities, delivering, among other things, jobs and passenger spending power. This value must be recognised as part of the economic sustainability of small airports; not just self-generated income alone.”

In a new white paper published by UK consultancy Helios which explains how air traffic control services could be shared between smaller airports, Nick McFarlane argues that such measures could not only reduce costs, but also potentially improve services while overcoming common staffing issues.

“The problem for airports is that they have significant fixed or inelastic costs, in part arising from the regulatory requirements of their operating licence,” says McFarlane.

 

Posted in Airports, News

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