Article published on October 2013 in Legal Eye and reproduced by courtesy of Stephenson Harwood
The progress of the European Commission’s EU Airports Package, which was published in December 2011 to address issues on slots, ground-handling, and noise, has stalled. The European Parliament has approved all three elements of the package of legislation, with some substantive amendments, at First Reading stage, but the European Council has not.
Slots
The slots proposal was amended and approved at first reading by the European Parliament on 12 December 2012. The Parliament made some changes to the Commission’s original proposal, maintaining the current ratio of the use it or lose it rule at 80:20, and reduced the Commission’s proposal for the qualifying length for a series of slots from 15 to 5 in Summer and 10 to 5 in Winter. The amendments are now with the European Council for consideration. The rumours coming out of Brussels are that the text of the proposed new Slot Regulation is
not agreed and that it is becoming increasingly uncertain whether a new Slot Regulation will be required at all.
One ongoing concern for airlines is that the European Commission and Parliament are resentful that airlines have control of their own slots, and that they (the EU legislature) may reserve the right to tackle the issue of who should own slots at a later date. This issue is of particular concern because airlines have capitalised the value of their slots as assets in their balance sheets, so any indication of an attempt by EU legislators to introduce measures to change slot ownership has to be monitored carefully.
Ground-handling
The proposed increase in the minimum number of ground handling companies given licences to operate at large airports is politically very sensitive, with the German ground-handlers’ unions, particularly at Frankfurt and Munich airports, exerting considerable lobbying pressure on MEPs.
The European Commission proposed an increase in groundhandlers at large airports from 2 to 3 at airports with more than 5 million passengers per annum. The Rapporteur for the TRAN Committee of the European Parliament, Polish MEP, Arthur Zasada, proposed in his working report to the TRAN Committee an increase in groundhandlers from 2 to 4 at qualifying airports. The TRAN Committee rejected this proposal, requiring the Rapporteur to significantly amend his report and find a compromise with the demands of the Employment Committee of the European Parliament. The text that was adopted by the TRAN Committee in March 2013 proposed a smaller increase in groundhandlers from 2-3 only at airports with over 15 million passengers per annum over a 10 year period. The TRAN Committee also proposed more stringent social terms and conditions and protection of employment conditions. These revised recommendations have been narrowly voted through the first reading of the European Parliament, but have not been voted on yet by the European Council – where there are reported to be significant differences of opinion. The timeline for the European Council to vote on this proposed new Regulation is unclear.
Noise
The proposed new noise Regulation is far less controversial than the proposed groundhandling Regulation. The European Parliament agreed on amendments on 12 December 2012 but approval by Council is still pending.
The current EU Lithuanian Presidency did not include the Airports Package in the European Council work plan for its six month Presidency of the EU, which expires in December 2013, which is why progress on the Airports Package has stalled at Council level. The EU Transport Commissioner, Vice President Siim Kallas, wants to have the Airports Package adopted in full, and there has been no move by the European Commission to disaggregate the three component parts of the Package, so the three draft Regulations in their current state look set to stagnate until the Greek Presidency takes over in January 2014.
The Greek Presidency has not yet said whether it is going to prioritise the Airports Package, but if it does, it will face political difficulties in pushing the proposed new groundhandling regulations through. It seems likely that it will not prioritise this package of regulations until after the European Parliament elections have taken place in May next year.
Author: Paul Phillips (Partner, Head of aviation litigation and regulation with Stephenson Harwood) / Publisher: SCMO
