IATA has hit out at airport operator Aéroports de Paris (ADP) over the imposition of an annual 5% increase in airport charges over the next five years, in what is the latest in a series of rows between airlines and airport operators.

Aeroports de Paris  W250

© Aeroports de Paris

In September 2005, ADP proposed a 35% increase in charges over five years, with IATA responding with a request for a 3% reduction in charges to encourage efficiency. A consultative committee then recommended a maximum increase of 11% over inflation during the five-year period, with a limit of 2.5% over inflation in any one year. IATA was also unhappy with that proposal, but much less so when the French transport minister Dominique Perben made his final decision, overruling the committee that he himself had appointed. IATA has also made clear its fears that ADP is being primed for privatisation, and points to the lack of transparency in the charges decision.

“It is incredible that the [transport] minister ignored the recommendation of his consultative committee and approved increases well above inflation,” complains Giovanni Bisignani, IATA’s director general, claiming that Paris Charles de Gaulle is already the second most expensive airport in Europe and that “efficiency and cost reduction are a matter of survival for airlines.

“It should be focusing on cost decreases not increases. This short-sighted decision will have long-term effects on the competitive position of Paris as a major hub,” he warns.

Jeff Poole, IATA’s director for industry charges and taxation also makes clear that IATA is far from happy with the outcome. “There are significant investment costs but there is also a very significant growth in traffic to give a volume effect which should reduce charges,” he argues. “And we should not necessarily pay up front for investments, but rather on a usage basis.”

ADP says that it needs to increase the charges to make the airport competitive with the likes of Frankfurt and London Heathrow. “We are giving the airlines what they want. Air France, for instance, wants a new terminal. We can’t do that if we don’t spend.” ADP plans to invest €2.5 billion ($2.8 million) over the next five years in the Paris airports, Charles de Gaulle E4 and Orly. “This only represents about €30 million a year to share among the airlines operating from our airports. That is around 30¢ per ticket.”

ADP claims that the increase in capacity, passenger expectations, the upgrading of infrastructure, and legal and environmental constraints have led to increased investments. It claims that as a result, expenditure has increased from €282 million in 1995 to €520 million in 2004, with capital invested per passenger increasing from €38 to €55. “That is to say the airport fees have not increased as fast as the capital invested.”

Air France, ADPs largest customer, says that it has noted that the increase in charges is three times the rate of inflation, and is studying the consultative committee’s report, while the second largest customer, easyJet, complains that: “Such a large increase in charges defies the current trend across Europe of airports reducing charges in order to boost traffic.” The low-cost carrier claims: “ADP is simply taking advantage of its planned privatisation to secure Government support in order to make huge profits.”

ADP is less than sympathetic: “As far as we know easyJet is very happy to operate from Paris and it is a strategic choice for them. Of course, they have the choice to operate from other airports, which other airlines such as Ryanair do. But I don’t think they’re interested.” ■


Source: Airline Business