1. CMS Adonnino Ascoli & Cavasola Scamoni CMS Albiñana & Suárez de Lezo CMS Bureau Francis Lefebvre CMS Cameron McKenna CMS DeBacker CMS Derks Star Busmann CMS von Erlach Henrici CMS Hasche Sigle CMS Reich-Rohrwig Hainz ASSEMBLY OF EUROPEAN REGIONS September 12, 2007. EU regulation concerning regional airports by Annabelle LEPIECE Member of the Brussels Bar The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author

2. 17 September 2007 -2- Assembly of European Commission EU regulation concerning regional airports INTRODUCTION I.EVOLUTION OF THE APPROACH OF THE EUROPEAN COMMISSION TOWARDS AIRPORTS II.TYPES OF AIRPORTS III.FINANCING OF AIRPORTS IV.AIRPORT CHARGES V.HANDLING SERVICES VI.OTHER REGULATIONS The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

3. 11 September 2015 -3- Assembly of European Commission EU regulation concerning regional airports I.EVOLUTION OF THE APPROACH OF THE EUROPEAN COMMISSION TOWARDS AIRPORTS Previous approach of the European Commission towards airports  1994 Community Communication on the application of Articles 87 and 88 of the EC Treaty to State aids in the aviation sector : « The construction or enlargement of infrastructure projects (such as airports, motorways, bridges, etc…) represents a general measure of economic policy which can not be controlled by the Commission under the Treaty rules on State aids. Infrastructure development decisions fall outside the scope of application of this Communication is so far as they are aimed at meeting planning needs or implementing national environmental and transport policies ».  Aerelba and Manchester cases (1999) The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

4. 11 September 2015 -4- Assembly of European Commission EU regulation concerning regional airports New approach of the European Commission 1.Application of Article 82 of the EC Treaty :  The system of discounts on landing fees constitutes an abuse of a dominant position : Paris Airports (1998) Brussels Airport (1995) Portuguese Airports (1999) Spanish Airports (2000).  CJCE (Paris Airports 2000) : the management of an airport as the handling fees are concerned is an economic activity within the scope of Article 82 of the EC Treaty. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

5. 11 September 2015 -5- Assembly of European Commission EU regulation concerning regional airports 2.Application of Articles 87 and 88 of the EC Treaty (State aids) : « In the past, the Commission did not perceive the provision of State resources in the form of tax exemptions to airports as affecting trade among Member States and distorting competition, since the provision and operation of airports facilities and services were not clearly identified as a competitive activity. However, the transformation of airports in commercial entities competing with each other is an example of ‘evolution of the common market’ which makes a measure such as a tax exemption become aid » (Aer Rianta Case, 2001) Amsterdam Case, 2001 : fiscal exemption. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

6. 11 September 2015 -6- Assembly of European Commission EU regulation concerning regional airports II.TYPES OF AIRPORTS IN EU REGULATION 1.Handling directive (1996) Airports above 1 million passengers per year or 25.000 tons of freight  Free access to self handling Airports above2 million passengers per year or 50.000 tons of freight  Free access to handling activities by third parties The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

7. 11 September 2015 -7- Assembly of European Commission EU regulation concerning regional airports 2.Community Guidelines on financing of airports and start-up aid to airlines from regional airports (2005) :  Category A : “Large Community airports” with more than 10 million passengers a year;  Category B : “National airports” between 5 and 10 million passengers a year;  Category C : “Large regional airports” between 1 and 5 million passengers a year;  Category D : “Small regional airports” with less than 1 million passengers per year.  No freight criteria The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

8. 11 September 2015 -8- Assembly of European Commission EU regulation concerning regional airports 3.Annex II of draft regulation of the European Parliament and of the Council on Common rules for the operation of air transport services in the Community (2006) Definition of regional airports Annual traffic volume less than 900.000 passengers movements; Annual traffic volume less than 50.000 tons freight; Location on an island of a Member State. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

9. 11 September 2015 -9- Assembly of European Commission EU regulation concerning regional airports III.FINANCING OF AIRPORT : 2005 COMMUNITY GUIDELINES 1.Public funds granted to airports (subsidies, capital injections, guarantees, loans, etc …) : Public subsidies for activities that normally fall under State responsibility in the exercise of its official powers as a public authority (safety, air traffic control, police, customs, etc …); Financial compensations for airport activities constituting services of general economic interest; Subsidies for the financing of airport infrastructure; Aid for airport activities (management, handling activities). Comments : Very strict rules; Wrong understanding of the sector; Systematic obligation of notification to the European Commission even for small regional airports. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

10. 11 September 2015 -10- Assembly of European Commission EU regulation concerning regional airports 2.Commercial incentives granted by public authorities / airport operators to airlines : Application of the private investor principle; Public service obligations (non viable routes) and social aid schemes for certain categories of air passenger; Start-up aids : Comments : Impossible to apply the private investor principle to regional airports; Too many (12) and too strict conditions for start-up aids : lack of success. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

11. 11 September 2015 -11- Assembly of European Commission EU regulation concerning regional airports IV.AIRPORT CHARGES 1.EC Treaty Article 82 of the EC Treaty (Portuguese airports and Brussels airport cases)  No discrimination between airlines Article 87 of the EC Treaty (Manchester Case, 1999)  Rebates on landing fees : Transparent; Non discriminatory; Limited in time. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

12. 11 September 2015 -12- Assembly of European Commission EU regulation concerning regional airports 2.Draft directive on airport charges (1997)  Applicable to airports : with more than 250.000 passengers per year; or 25.000 tons of freight.  Non-discrimination : Same level of airport charges to equivalent intra-community air services in terms of aircraft types and/or characteristics, the distance flown and/or the administrative and customs formalities. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

13. 11 September 2015 -13- Assembly of European Commission EU regulation concerning regional airports  Cost-relatedness : level of airport charges set in a reasonable relation to the overall cost of the service and facilities which these charges intended to cover (dual till);  Modulations : other income; discounts; no discrimination and transparence.  Transparence of the airports charges (services covered, method of calculation). The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

14. 11 September 2015 -14- Assembly of European Commission EU regulation concerning regional airports 3.EC proposal for a directive on airport charges (2007) Applicable to airports with : over 1 million passenger movements per year; or 25.000 tons of freight. Principle of non-discrimination among users or passengers : differentiation according to the quality and scope of services. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

15. 11 September 2015 -15- Assembly of European Commission EU regulation concerning regional airports Consultation and transparency of the airport charges:  Consultation by the airport manager of the users on : o Operation of the system of airport charges; o Level of such charges; o New infrastructure investments.  Agreement on changes to the charges system or their level;  Transparency : communication of a long list of information (services and infrastructure, global costs of the airport, revenues, productivity, etc …). New Independent regulatory authority :  Disagreement on the airport charges system or level;  Disagreement on the quality standards. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

16. 11 September 2015 -16- Assembly of European Commission EU regulation concerning regional airports COMMENTS  Scope too broad : maybe justified in large and national airports but not adequate for regional airports;  Common goal of airports and users : increase the level of passengers BUT different economic interests;  No mention of modulations on the basis of aircraft types, administrative formalities, peack/off peack landing or environmental criteria;  No principles for rebates;  Communication of confidential business information infringing Competition law. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

17. 11 September 2015 -17- Assembly of European Commission EU regulation concerning regional airports  Increase of administrative burdens;  Loss of autonomy of the airports in the management of their own investments and activities;  Withdrawal of the cost relatedness principle (cross – subsidiation allowed between commercial revenues and airport charges). The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

18. 11 September 2015 -18- Assembly of European Commission EU regulation concerning regional airports V.HANDLING SERVICES 1996 Directive Report from the Commission on the application of the Directive (2007) :  Positive impact on competition;  Better value for money spent on groundhandling services;  Greater pressure on prices;  Still malfunctions. Revision of the directive (Consultation paper of 2003) :  Abolition of any threshold ?  Subsidiary for handling services provided by airport operator ?  Improvement of the selection procedure. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

19. 11 September 2015 -19- Assembly of European Commission EU regulation concerning regional airports VI.OTHER REGULATIONS 1.Public services obligations : Proposal of a Regulation of the European Parliament and / of the Council on Common rules for the operator of air transport services in the Community. 2.Air navigation services : new Regulations on : The provision of air navigation services; The common requirements; The air traffic controller license; The common charging schemes. 3.Safety and security : Regulations or requirements and standards, procedures, etc …; Future European rules on the financing of safety and security measures. 4.Environmental requirements. 5.Allocation of slots. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

20. 11 September 2015 -20- Assembly of European Commission EU regulation concerning regional airports CONCLUSIONS The European Commission wants to promote the development of regional airports. An action plan for airport capacity, efficiency and safety in Europe (2007) : Importance of regional airports to the development of an integrated European air transport network :  Development of existing latent capacity;  Improvement of their accessibility (rail and road access). Improvement of co-modality thanks to Community funds. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

21. 11 September 2015 -21- Assembly of European Commission EU regulation concerning regional airports BUT overregulation affects the development of regional airports :  Administrative burdens;  Loss of autonomy in the management of the airport;  Inadequate conditions imposed on regional airports;  Existing remedies;  Wrong understanding of the sector. The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.

22. 11 September 2015 -22- Assembly of European Commission EU regulation concerning regional airports Thank you for your attention Annabelle Lepièce Tél. +32 2 743 69 34 Email : annabelle.lepiece@cms-db.comannabelle.lepiece@cms-db.com The content of this presentation is protected by copyrights and may not be reproduced without the consent of its author.