THE SOCIAL IMPACT OF THE PROPOSED EU REGULATION ON GROUND HANDLINGChristoph Köppchen, Manager Economics

31 May 2012European Parliament, EMPL Hearing

ACI EUROPE MEMBERSHIP

REGULAR MEMBERS: 180

- Number of Airports operated: 405

- Countries: 46

WORLD BUSINESS PARTNERS: 155

National Airport Associations: 8

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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!

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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.

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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

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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

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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

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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

THANK YOU

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