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THE SOCIAL IMPACT OF THE PROPOSED EU REGULATION ON GROUND HANDLING Christoph Köppchen, Manager Economics 31 May 2012 European Parliament, EMPL Hearing.

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Presentation on theme: "THE SOCIAL IMPACT OF THE PROPOSED EU REGULATION ON GROUND HANDLING Christoph Köppchen, Manager Economics 31 May 2012 European Parliament, EMPL Hearing."— Presentation transcript:

1 THE SOCIAL IMPACT OF THE PROPOSED EU REGULATION ON GROUND HANDLING Christoph Köppchen, Manager Economics 31 May 2012 European Parliament, EMPL Hearing

2 ACI EUROPE MEMBERSHIP REGULAR MEMBERS:180 - Number of Airports operated:405 - Countries: 46 WORLD BUSINESS PARTNERS:155 National Airport Associations:8 2

3 3 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!

4 4 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.

5 5 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

6 6 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

7 7 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

8 8 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

9 THANK YOU


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