Brussels, 1 December 2011
Europe's Airports 2030: Challenges Ahead
The 10 key facts and figures Airports matter - almost 800 million passengers used EU airports in 2010, a third of the world market, almost three times more than when air traffic was liberalised in the early nineties. Aviation is one of Europe's most competitive sectors. Airports are a vital part of our aviation system and airports are increasingly important to our economy. Europe has for historic and geographical reasons established a strategic position as an aviation "hub" for the world. But competition is increasing. Half of the world's new traffic added during the next 20 years will be to, from, or within the Asia Pacific region. Over the next five years, air transport growth will be driven mainly by regions like Asia Pacific, the Middle East and Latin America.
Faced with intense global competition, there are two major challenges facing European airports: capacity and quality. Europe's airports are facing a capacity crunch. Air traffic in Europe will nearly double by 2030. Yet Europe will not be in a position to meet a large part of this demand due to a shortage of airport capacity.
Already today 5 major European airport hubs are at saturation - operating at full capacity: Düsseldorf, Frankfurt, London Gatwick, London Heathrow, Milan Linate (Eurocontrol). By 2030, on current trends 19 key European airports will be at saturation, including for example, Paris CDG, Warsaw, Athens, Vienna and Barcelona1. The resulting congestion could mean delays affecting 50% of all passenger and cargo flights (see detail in annex). Airport capacity must be optimised. Also, noise restrictions must be proportional to the identified noise problem.
Quality and efficiency of services at airports must be improved. Today, 70% of all delays to flights are already caused by problems due to the turn around of aircrafts at airports (delays caused by airlines or their ground-handlers, airports or other parties involved in the turn around process)2. The overall quality of ground-handling services has also not kept with evolving needs especially in terms of reliability and resilience, safety and security. Disruptions experienced have shown the need for increased coordination of ground operations for European airports and the network as a whole (knock-on effects) so as to ensure continuity of airport operations.
The Airport Package To face these challenges, the European Commission has today adopted a policy document and three legislative proposals: to help tackle a shortage of capacity at Europe's airports; to improve the quality and efficiency of ground-handling services; and to improve the transparency of the decision making process on noise restrictions. Slots
What is an airport slot? An airport "slot" is a permission to use runways and terminals to operate a flight to or from a congested airport on a specific date at a specific time. Slots are a planning tool for rationing capacity at airports where demand for air travel exceeds the available runway and terminal capacity. Airport slots are vey important to airlines in particular as they enable them to fly to and from some of the busiest, capacity-constrained airports in Europe.
What are the current rules? Under current rules, slots are allocated to airlines under an administrative system, established under a 1993 EC Regulation. Slots are allocated for winter and summer seasons (late March-late October is the Summer season). A minimum of 5 slots allocated at the same time on the same day of the week during a season forms a series of slots. Under the 1993 rules, if airlines use a series of slot 80% of the time they can retain it for the next season (grandfather clause). Otherwise it is returned to the pool. If the use of a slot falls below 80% for a season, it must be returned by the airline to the pool for re-distribution. The pool system is also used to allocate new capacity. Slots from the pool are allocated by an independent co-ordinator. 50% of the pool slots go to new entrants. 50% go to other airlines on a first come first served basis. There are currently 89 European airports experiencing a level of congestion which is such that they use a "slot" system. In practice, only in the UK has a system of secondary trading of slots developed.
What is the problem? The current administrative system of slot allocation is inefficient. The "grandfather clause" is not sufficiently performant as it allows for capacity to remain unused. More broadly, there is no market incentive for airlines to sell on under used slots to other airlines who could make better use of the capacity. The system hinders competition and passenger choice: no concrete financial value is placed on a slot which could serve as an incentive to trade a slot with another airline, for example. The system hinders the mobility of slots which is important for a dynamic aviation market.
In addition, since the regulation was conceived in 1993, air traffic has increased dramatically, the number of airports facing capacity constraints has also grown and the situation will worsen if nothing is done. At many congested airports it is already difficult for carriers to enter the market or indeed grow their operations since airlines will do everything necessary to keep their slots from one season to the next. Pool slots are often only available for flight timings which are less attractive (e.g. mid afternoon, late evening, when fewer people wish to fly). If nothing is done, the situation will get much worse - 19 airports in Europe are likely to be operating at full capacity by 2030 leading to delays on 50% of all flights. The new proposals
The revised slot regulation will introduce key measures including: - Secondary trading of slots: the new proposal will allow for the trading or slots between airlines across the EU. The 1993 Regulation did not provide for secondary trading of slots between airlines, however it did not specifically ban it. Over time, the situation has evolved so that a patchwork of different practices has evolved across the EU. For example, secondary trading exists in the UK, but it is banned in Spain. Establish clear conditions for the transparent trading of slots so all market competitors can know what can be bought and sold. The Regulation establishes clearly a coherent regime to ensure transparency in the trading of slots. This will be supervised by national authorities. Increase the slot utilisation threshold from 80% to 85% and the length of the slot series from the current 5 to 10 for the winter season and 15 for the summer season - to impose a stricter discipline on airlines by tightening the rules requiring airlines to demonstrate that they have used their slots sufficiently during the season (the so-called 'use it or lose it' rule). The aim is to ensure that airlines who wish to keep slots for the coming season, use the capacity. It is estimated that the changes proposed would allow the system to handle 24 million more passengers a year. The changes proposed could be worth €5 billion to the European economy and create 62,000 more jobs over the period 2012-2025
SECTION 2: Ground-handling
What is ground-handling? Ground-handling covers a wide variety of services for airlines delivered at airports in support of the operation of air services. It includes not only highly technical services such as maintenance, fuel and oil services and freight handling, but also services which are essential to passengers' safety and comfort, such as passenger check-in, catering, baggage handling and surface transport at the airport. Ground-handling services are an essential part of the aviation system.
Revenues of ground-handling: EUR 50 billion worldwide
Employment: at least 60,000 people in Europe
Costs linked to ground-handling services for airlines represent 5 to 12% of operating costs
The current rules
A 1996 Directive on Ground-handling (Directive 96/67/EC) introduced competition in different ground-handling services at airports to companies not affiliated with the airport or the national carrier. Directive 96/67/EC adopted in 1996 introduced: full opening to competition for the majority of ground-handling services. The Directive has brought many benefits, including an increased number of suppliers and new providers as well as an improvement in quality, according to the airlines buying the services; and at the same time the lowering of prices. However, Member States were given the ability to limit competition to minimum of two suppliers for four important categories involving the aircraft itself ("restricted services") (baggage handling, ramp handling, fuel and oil handling, freight and mail handling). The result today is that the degree of competition in these restricted services and the access regime varies significantly across Member States.
In practice, only a limited number of countries including: the UK, the Nordic countries, the Netherlands and Poland have open competition in the key "restricted services". Others, like Spain, Germany, Austria, Belgium, Portugal have chosen to limit competition in the "restricted services" to the minimum of two service providers. What is the problem? 70% of all flight delays are caused by problems on the ground at airports, not in the air. A wide consultation with stakeholders (carried out end 2009- early 2010) shows that further improvements of ground-handling services are necessary to tackle persistent problems with efficiency and quality (reliability, resilience, safety and security, environment).
And while Europe is in the process of reforming its air traffic control system (Single Sky proposals) in order to improve the performance of air traffic management. We cannot tackle successfully problems of delays and congestion if we do not improve the performance of airports on the ground. The new proposals
The new proposals on ground-handling will include key measures to:
Ensure that airlines have an increased choice of ground-handling solutions at EU airports. The proposals introduce full opening of the self-handling market for airlines. At the same time they will increase the minimum number of service providers (in restricted services) from two to three at large airports. Give airports more control over the co-ordination of ground-handling services. Establish a new role for the airport managing body as "ground co-ordinator" of ground services (including by setting minimum quality standards). That means that airports are tasked with the proper co-ordination of ground-handling within an airport. And most importantly they have the tools to establish minimum quality standards to be respected by all groundhandlers at their airport. In addition the proposals will clarify rules for subcontracting. The proposals will clarify the legal framework for training and transfer of staff. Ground-handling is a very labour intensive industry (labour accounts for 65%-80% of the costs). High quality, well trained staff are essential to maintain the safety and security of ground-handling services, as well as to ensure quality services. To this end, the new proposals include provisions to strengthen the training and stable employment conditions of staff, notably, by Introducing a new possibility for Member States to impose a requirement on companies that win ground-handling contracts in restricted markets to transfer the staff from the previous contract holder with their full existing conditions Establishing compulsory minimum training for staff. In addition, the proposals will: Strengthen the ground-handling market via the mutual recognition of national approvals for ground-handlers issued by Member States. In other words, an approval issued in one Member State would entitle a handler to provide services in a different Member State. 'Mutual recognition' is a standard mechanism used in the European single market to break down barriers to providing services across borders;
Introduce greater transparency on how airlines (and their handlers) are charged for airport 'centralised infrastructures' (for example, fees charged by the airport for the use of baggage processing systems) and under which conditions airports themselves can provide ground-handling services. This is to create a more level playing field to allow independent handlers to compete more effectively. Section 3: Noise
The current system
Noise-related operating restrictions are put in place by Member States at most large European airports. Restrictions protect people living near airports from the effects of aircraft noise and form part of a wider noise-abatement strategy, which has four principal elements. Those elements are: reduction at source (quieter aircraft); land-use planning and management; noise abatement operational procedures (e.g. avoiding overflight of a specific area); and operating restrictions (e.g. bans on flights during the night). As these measures may reduce the available capacity at airports and also impact non-EU airlines, the decision-making process must follow international principles on noise management (the balanced approach established by the International Civil Aviation Organization (ICAO)). The current rules
Under Directive 2002/30, Member States are obliged to ensure that decisions on noise-related operating restrictions carefully balance the need for noise protection for residents near an airport against the possible impact of such restrictions on air traffic. The process to be followed, including noise assessments, must properly assess the proportionality, cost-efficiency and transparency of noise-related operating restrictions.
What is the problem? There are still many inconsistencies as to how such restrictions are put in place around Europe. In some cases, noise restrictions may not be compatible with the safest operational conditions for the operation of flights into an airport. There may be an excessive impact on the capacity of an airport due to noise restrictions, which can in turn have a knock-on effect at other airports. Noise restrictions can also have other environmental impacts such as additional holding patterns which may be required for incoming aircraft. Noise restrictions may also encourage further residential development near the airport which should be kept clear in order to reduce the noise impact of airport operations. Lastly, from a procedural point of view, there is often a tendency for noise restrictions to become 'cast in stone' without review, meaning that new operational techniques, technological solutions or aircraft technology cannot easily be deployed.
The new proposals
The proposals aim to improve the procedures used to establish noise-related operating restrictions at EU airports, in order to improve clarity and transparency and better reflect the 'balanced approach'. This will create a common European approach to setting restrictions. The objective is to improve the way that restrictions are put in place rather then to call into question the legitimate need to protect residents from excess airport noise.
The new proposals will:
Allow airport authorities to phase out more easily the very noisiest aircraft which can account for a disproportionate amount of noise nuisance. This means reviewing the outdated definition of marginally compliant aircraft to take account of developments in technology. Give the Commission a scrutiny role, ex ante, on new noise measures, with a view to ensuring a consistency of approach across Europe. The proposals are not about noise target setting, but about the procedures prior to decisions. The aim is to ensure that restrictions on noise must be justified, in a transparent way and are evidence-driven, and follow "the balanced approach" agreed by the UN- body responsible at international level (ICAO, International Civil Aviation Organisation). This is however only a review right for the Commission, it will not substitute for a Member State decision. Include practical steps to support the implementation of measures, including: the clarification of the links between noise measures and airport management;the improvement of noise mapping and administrative support to ensure the efficient use of the European airspace;
The proposals should allow airports to 'decouple' the growth in air traffic from the level of noise nuisance suffered by local residents, allowing improved noise protection at the same time as preserving growth and the economic contribution which it makes.


 
Forecast airport congestion (SAMPLE AIRPORTS)
Capacity assumptions
Demand exceeds capacity during part of day
Assumes annual movement cap raised to 510,000 in November 2010 but no further increase
Sufficient capacity most or all day
Second runway built when needed
Demand exceeds capacity most or all day
Assumed 10% increase in capacity in 2015 but no further increase
New runway (2011) and terminal (2015) allow increases from 83 to 126 movements/hour
Assumes no new runway but increase of 2-3 movements/hour on current runway
Assumes no third runway, or mixed mode, or relaxation of annual movement cap.
Assumes ATC improvements increase capacity from 98 to 120 movements/hour by 2020 (increase phased in from 2014)
Assumes no amendment to Bersani Decree
Assume third runway operational by 2017
Assume additional capacity added when required
Paris CDG
Assumes increase from 114 to 120 movements/hour by 2015, but no further increase (e.g. fifth runway)
Assumes no relaxation of annual slot cap
Rome Fiumicino
Assume improved ATC allowing 100 movements/hour but no new runway
Assume third runway operational in 2020, initially allowing 80 movements/hour increasing to 90 movements/hour by 2025
Hours per day demand exceeds capacity Airport
Note: Covers daytime period (16-18 hours depending on airport).
* Very limited capacity available in some off-peak hours, but cannot be allocated due to annual movement cap - in effect airport is full all day, year-round.
Source: Steer Davies Gleave, Impact assessment of revisions to Regulation 95/93, March 2011
EUROCONTROL 'Challenges of Growth 2008' 
EUROCONTROL 'Performance Review Report 2010' by the Performance Review Commission.  and EUROCONTROL CODA Report 2010 available at