IAG’s Walsh comments in findings from a new study into EU airport charges

Eleanor Steed
By Eleanor Steed July 5, 2017 12:49

IAG’s Walsh comments in findings from a new study into EU airport charges

In an interview on an Airlines for Europe (A4E) newsletter, Willie Walsh, chief executive of International Consolidated Airlines Group (IAG) commented on the findings of a new independent study by York Aviation on “The Cost and Profitability of European Airports” that showed European passengers are paying excessive airport charges, particularly at monopoly airports and airports which operate under a Dual Till regime.

Walsh said that the current system “incentivises airports to spend an exorbitant amount of money at airlines’ and passengers’ expense. This is driving extremely high costs, making European airports uncompetitive as hubs.”

According to the York Aviation study, says Walsh, Dual Till provides airports with almost five times more profitability than Single Till. In addition, Dual Till airports have eight per cent higher operational costs implying they are less efficient. Airports make huge profits while airlines do not. This equation is not sustainable, he said.

“There is a direct and indivisible link between an airport’s aeronautical and commercial activities,” adds Walsh. “They should not be considered separately when determining the level of airport charges. People don’t go to airports to shop but to fly. They shop while they are waiting for their flights. If airlines weren’t operating at the airports, the shops wouldn’t be there. Passengers contribute to the commercial success of the airports therefore profits from commercial activities should be used to decrease aeronautical charges in order to be competitive and attract more customers.”

Walsh concludes that the current ACD is “not fit for purpose and needs urgent reform.”

He called on the European Commission to ensure that “proper Market Power Assessments are in place to regulate the monopolies with corrective measures, and that national competition authorities have the competences and resources to effectively regulate the airports.”

Eleanor Steed
By Eleanor Steed July 5, 2017 12:49