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 - Countries: 46 WORLD BUSINESS PARTNERS: 155 National Airport Associations: 8 2 2

GROUND HANDLING – THE NEED FOR A GOOD QUALITY OF SERVICES WHAT IS CONSIDERED AS ‘GROUND HANDLING’? Passenger and baggage handling: check-in, baggage delivery Freight & Mail handling; Ramp handling (aircraft marshalling and loading) Fuel & Oil Cleaning, Catering, Aircraft maintenance, etc.  No Ground Handling: Security, PRM, Customs WELL-PERFORMING GH OPERATIONS ARE KEY! Complex and interdependent operations at airports Quality & costs of GH services = competitive advantage…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: Fully opened at all EU airports above 2 mio. pax 4 categories (ramp, baggage, fuel, freight): Minimum number of 2 handlers at airports > 2 million pax Self-handling: Minimum number of 2 licences at airports > 1 mio. pax Space, efficiency and safety considerations! INDEPENDENT HANDLERS DOMINATE THE MARKET Sources: European Commission, 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 highly competitive environment Pressure on working conditions of staff & quality of 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 three Ground Handlers at airports above 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 binding transfer of staff at national level Insufficient social safeguards in the proposal TRAINING REQUIREMENTS FOR STAFF Minimum training of 2 days for staff in Ground Handling Progress, but one week would be preferable

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 & Reporting Problematic and disproportionate, added value unclear

CONCLUSIONS: PRIORITIES FOR THE LEGISLATIVE PROCESS FOCUS ON QUALITY OF SERVICE OF GH SERVICES Provide airports with tools to set minimum standards NO DOGMATIC APPROACH TO MARKET LIBERALIZATION Keep provisions of existing Directive: Decision at national level! INTRODUCE STRONGER SOCIAL SAFEGUARDS Introduce binding transfer of staff in Art.12 Increase training requirements TAKE INTO ACCOUNT THE OPINION OF SOCIAL PARTNERS Improvements to tender procedure, length of licence and social clause