ACI EUROPE president discusses Brexit, airport capacity and investments

ACI EUROPE provided feedback at its annual New Year Reception in the European Parliament last night, on future challenges within the airport industry.

Dr Michael Kerkloh, president of ACI EUROPE and chief executive officer of Munich Airport, spoke about the potential impact of Brexit and the need for alignment in the European Commission’s approach to airport capacity, investment and user charges.

Dr Kerkloh spoke about the impressive resilience of air traffic last year in the face of increasing geopolitical risks and expressed concerns about the growing possibility of a no-deal Brexit scenario. He expressed the urgent need for clarity on the future of aviation relations between the UK and EU-27.

The president of ACI EUROPE said: “We understand that if the UK leaves the EU without an agreement, the status quo cannot be an option, but we are worried about the contingency measures proposed on the EU side. Freezing airline capacity will hurt connectivity and consumers on both sides as tickets have already been sold for the summer season.”

ACI EUROPE calculates that 93,000 flights could be lost, and 20 million passengers affected. This would have serious consequences on airports and their communities—with a total economic impact of up to €2.1 billion in foregone GDP and a loss of 43,000 jobs.

Dr Kerkloh continues: “On the EU side, larger airports and big cities might withstand the shock but medium-sized and smaller airports and their regional communities will be much more affected as their exposure to the UK can be very significant. Let’s not forget that behind these contingency measures, there are people’s lives and jobs.”

The European Commission has repeatedly stated that it considers that the lack of airport capacity is among the top challenges facing European aviation4.

Discussing the EU Directive on airport charges, Dr Kerkloh said: “By constantly calling for lower airport charges, airlines threaten the development of quality infrastructure needed to accommodate air transport demand over the next 20 years. All this comes down to creating market conditions which limit airline competition and allow them to charge more in airfares and ancillaries.”

With Governments unwilling to fit the bill and State aid rules limiting public financing, creating capacity will require corporate and private investment, which in turn requires a predicable and proportionate regulatory environment based on the EC’s own ‘user pays’ principle.

However, the review of the EU Directive on airport charges has yet to provide legal certainty and alignment with these objectives. This is creating anxiety with airports’ shareholders and private investors, potentially compromising airport capacity projects.

Dr Kerkloh said: “Just this morning, Vienna Airport publicly announced that the policy options being pursued by the European Commission as part of their review of the airport charges directive, constitute a massive obstruction to the delivery of their third runway5.

“The uncertainty, the increasing dominance of some airlines, the realities of airport competition, the implications of the ‘user pays’ principle and our State aid rules as well as the need for private investment. At a time of increasing airline dominance, there is no room for a disconnect between charges, investment and capacity. I appeal to the Commission to see the bigger picture here and to focus on consumer interest.”

The European Commission will soon release its own evaluation report of the current EU Directive on Airport Charges.