The guidelines and regional airports Christoph Köppchen, Policy Manager Brussels, AER Seminar 08.09.2009 EU Guidelines for State Aid for Regional Airports.

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Presentation transcript:

The guidelines and regional airports Christoph Köppchen, Policy Manager Brussels, AER Seminar EU Guidelines for State Aid for Regional Airports - A Chance to support regional development

THE VOICE OF EUROPE’S AIRPORTS  444 AIRPORTS / 46 COUNTRIES  172 WORLD BUSINESS PARTNERS Investors, Banks, Construction Companies, Security equipment manufacturers, Retailers, Consultants, etc.  5 NATIONAL ASSOCIATIONS –ALFA ACI (French Speaking airports Worldwide) –UAF (France) –Assaeroporti (Italy) –AOA (UK) –ADV (Germany)

OUR MISSION "ACI EUROPE advances the collective interests of Europe's airports and promotes professional excellence in airport management and operations"

AGENDA I.Setting the Scene: The economic impact of regional airports II.The economic crisis: A more flexible application of existing state-aid rules III.Revision of EU Guidelines: The need for a flexible and sustainable framework ensuring regional development

I – SETTING THE SCENE The economic role of airports  Airports as economic actors in their region –Fostering of wider economic activity at and around their premises: a catalyst for job creation! –Tourism a key industry for numerous regions  Airports as engines of growth –Airport operators in Europe directly employ staff, with employees on airport sites working in total (2007) –The total contribution of airports and onsite jobs to European GDP amounts to approx. 59 billion € (2006)  Airports ensure connectivity of remote areas – Recognition by EU Airport Charges Directive

I – SETTING THE SCENE The economic impact of regional airports  High economic impact of regional airports on their regions –Incentive to support development of regional airports by public (regional) authorities  Various studies confirm the positive contribution to economic growth –ACI EUROPE (2004): every million passengers supports 2000 jobs regionally –European Parliament (2007): positive effects of low-cost traffic at regional airports –Frankfurt Hahn (2007): 52.3 million € tax revenue generated in 2005 –Airport of Biarritz-Anglet-Bayonne (2008): 1629 jobs and € million of revenues depended directly and indirectly from the airport in 2006

I – SETTING THE SCENE A competitive environment  Liberalised air traffic rights in the EU: –Possibility for airlines to operate and base aircraft in EU Member States without restrictions  Success of Low-Cost Carriers (LCC), in particular at regional airports: –Market share of LCCs: In 2007, 23% of available seat capacity was offered by low-cost carriers (AEA members: 53%). By 2020, projected market share of over 50% for LCCs intra-EU. Competitive market environment: Risk-sharing with airlines, e.g. through incentive measures

II – THE ECONOMIC CRISIS Falling passenger numbers at regional airports

II – THE ECONOMIC CRISIS The effects on regional airports  Commercial effects of the crisis: Falling passenger- numbers = less commercial- and non-commercial revenues  Reaction of regional airports: Cost-cutting programmes and delay of investments  BUT: Airlines reconsider destinations and frequencies, with possible closure of non-profitable regional routes! What happens to new routes on the brink of profitability after the end of support measures according to EU guidelines?

II – THE ECONOMIC CRISIS A flexible application of state aid rules  Maximum duration of start-up aid to new routes according to EU State Aid guidelines: –3 years –5 years for outermost regions  BUT: Many routes may not be viable in the short term without additional support until the crisis is over! –All initial investments in these routes may be lost – and many jobs in danger!  ACI EUROPE request (April 2009): Extension of duration of start-up aid for notified existing and newly established schemes in 2009 to up to 5 years in the EU –Limited support measure for regional airports –Indepedent from review of EU guidelines

III – THE REVISION OF THE GUIDELINES Current issues with the existing guidelines  General assessment: a complex set of provisions –Cumbersome procedures: Administrative burden for airports –Lacking legal certainty in several areas  Financing of airport infrastructure –Change of Commission practice: application of state-aid rules to construction of airport infrastructure –High administrative burden for airports –Legal uncertainty: Private Investor Test –Pending cases at European Court of Justice (CFI) (Germany)  Start-up aid to airlines –Few notifications of start-up aid schemes –Many complaints from third parties, leading to lenghty procedures and Commission overload –Legal uncertainty: Definition and status of airports’ own resources

III – THE REVISION OF THE GUIDELINES Preliminary considerations for a revision  Guiding principles for a revision of the guidelines –Simplification of the guidelines –Creation of more legal certainty –Reduction of unnecessary red tape in the air transport sector  Potential areas for revision could include: –Scope of the guidelines –Infrastructure financing and state aid: Back to 1994 principles? –Private Investor Test: guidance on requirements –Simplification of criteria for the grant of start-up aid (in coherence with EU Airport Charges Directive) –The issue of profitability of airports (§52) –Clarification of the position of self-financed public airports  Current evaluation of present guidelines by ACI EUROPE

CONCLUSION  Regional airports play a vital role in the economic development of their region  Due to the economic crisis, the existing state-aid guidelines should be flexibly applied (duration of start-up aid: 5 years)  The current guidelines are complex and should be simplified as well as clarified  Any revision should ensure a flexible and sustainable framework that takes into account the economic realities of regional airports

Thank you!