Benchmarking of User Charges

1
Benchmarking of User Charges

• Introduction and Methodologies

Presented by Pauline Wentzel and Sylvana Thiele
2
Overview

• Introduction
• SEO Study
• Cranfield University
• Conclusion

3
Introduction

• Why benchmark aeroneutical charges?
• Pressure from airlines and IATA on airport
  operators
• Significant for charter and LCC (operation of
  short sectors)
• Greatest impact when new routes are being
  considered

4
Introduction

• Structure of aeroneutical charges

Charge Common basis for charging Income to airport operator?
Landing Weight of aircraft Yes
Terminal navigation Included in landing charge or based on weight of aircraft Sometimes
Air-bridge Included in landing charge or based on aircraft movement Yes
Passenger Departing passenger Yes
Security Included in passenger charge or based on passenger numbers Yes
Parking Weight of aircraft per hour or 24 hours after free period Yes
Ground Handling Different charges for different activities Sometimes
Fuel Volume of fuel No
Government taxes Departing passenger No
source Graham,Anne Managing aiports, p.103.
5
Introduction

• Factors that influence the magnitude of airport
  charges
• Government funding
• Content and quality of service offered
• Volume of traffic
• Characteristics of traffic
• General cost environment
• Accounting practices
• Treatment of aeroneutical users

6
SEO Study

• Background
• Commissioned by the Directorate General of Civil
  Aviation in the Netherlands (DGL)
• Carried out by SEO/AAE in coop with To70 and DLR
• November 2003

7
SEO Study

• Choice of airports
• Amsterdam Airport Schiphol
• Frankfurt
• London Heathrow
• London Gatwick
• Paris Charles de Gaulle
• Paris Orly

8
SEO Study
Airport aeroneutical charges Government aeroneutical charges
Landing and take-off charges Noise charges
Passenger service charges Security charges
Parking charges for aircraft ATC charges
Airport security charges Other government charges or taxes
Airport noise charges
source own research
9
SEO Study

• Example Landing and take-off charges

source SEO, Government Influence on Aeroneutical
charges, p.7.
10
SEO Study

• Example Parking Charges

source SEO, Government Influence on Aeroneutical
charges, p.9.
11
SEO Study

• First Approach

source SEO, Government Influence on Aeroneutical
charges, p.9.
12
SEO Study

• Methodology
• Step 1 aeroneutical costs per passenger movement

source SEO, Government Influence on Aeroneutical
charges, p.13..
13
SEO Study

• Methodology
• Step 2 accumulation of the aeroneutical charges
  for all aircraft types

source SEO, Government Influence on Aeroneutical
charges, p.13.
14
SEO Study

• Methodology
• Step 3 Cost Comparisons

source SEO, Government Influence on Aeroneutical
charges, p.17.
15
SEO Study

• Methodology
• Step 4 analyses by aircraft type

source SEO, Government Influence on Aeroneutical
charges, p.22.
16
SEO Study

• Problems
• Fleet mixes and load factor may not be
  representative
• Variations in what is covered by a charge
• Does not take peak-hour charging into account
• Comparison based on published prices, does not
  reflect discounts
• Comparisons affected by exchange rate
  fluctuations
• Study adresses only levies with a public interest

17
Cranfield University

• The issue of Comparability
• Different sets of activities
• Different ownership structures
• Different goals and objectives
• No homogenous product or service
• No standardised conditions
• adjustments

18
Cranfield University

• Methodology
• 24 European airports
• Standardisation of cost, revenue and staff number
  data
• Select a common set of activities
• adjust data to activities of standard airport
• movement away from reality

19
Cranfield University

• Methodology
• Example of adjustments made ATC
• Standard airport assumed to have no involvement
  in the supply of ATC
• Thus assumption of no costs being incurred and
  no revenues received
• Removement of staff numbers and associated costs
  at airports that do undertake ATC
• Aeroneutical revenues are reduced by the same
  amount as the costs

20
Conclusion

• difficult to compare the level of charges at
  different airports because of the varied nature
  of the charging structures
• difficult to see how airport charges can have a
  major impact on airline behaviour
• charging policies have the greatest impact when
  new routes are being considered

21
Conclusion

• Information needed
• Public charges
• Aeroneutical revenues
• Flight movements
• Info on specific aircraft types
• Regulatory framework

22
Thank you for your attention!
23
References

• Association of European Airlines Benchmarking of
  Airport Charges, Information Package, February
  1998.
• BAA plc A report on the economic regulation of
  the London airports company, June 1996.
• Graham, Anne Managing Airports, An International
  Perspective, Second Edition, 2003.
• SEO Benchmark, Government influence on
  Aeronautical Charges, Amsterdam 2003.