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

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REGULAR MEMBERS:

- Number of Airports operated: - Countries: 

WORLD BUSINESS PARTNERS:

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National Airport Associations: 180 405 46 155 8 2

GROUND HANDLING – THE NEED FOR A GOOD QUALITY OF SERVICES

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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.

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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!

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THE GROUND HANDLING MARKET TODAY

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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!

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INDEPENDENT HANDLERS DOMINATE THE MARKET

Sources: European Commission, KPMG and ACI EUROPE

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GROUND HANDLING – THE SOCIAL IMPACT OF THE EXISTING DIRECTIVE 1996/67

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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

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THE COMMISSION PROPOSAL: IMPACT ON SOCIAL CONDITIONS

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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

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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

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TRAINING REQUIREMENTS FOR STAFF

> Minimum training of 2 days for staff in Ground Handling

Progress, but one week would be preferable

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THE COMMISSION PROPOSAL – OTHER KEY AREAS

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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

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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

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ADMINISTRATIVE BURDEN

> New procedures for Centralized Infrastructure & Reporting

Problematic and disproportionate, added value unclear

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CONCLUSIONS: PRIORITIES FOR THE LEGISLATIVE PROCESS

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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!

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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

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THANK YOU

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