Benchmarking of User Charges
Introduction and Methodologies
Presented by Pauline Wentzel and Sylvana Thiele
Overview
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Introduction
SEO Study
Cranfield University
Conclusion
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
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
Different charges for different
activities
Sometimes
Ground Handling
Fuel
Volume of fuel
No
Government taxes
Departing passenger
No
source: Graham,Anne: Managing aiports, p.103.
Introduction
 Factors that influence the magnitude of
airport charges:
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Government funding
Content and quality of service offered
Volume of traffic
Characteristics of traffic
General cost environment
Accounting practices
Treatment of aeroneutical users
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
SEO Study
 Choice of airports:
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Amsterdam Airport Schiphol
Frankfurt
London Heathrow
London Gatwick
Paris Charles de Gaulle
Paris Orly
SEO Study
Airport aeroneutical
Government aeroneutical
charges
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
SEO Study
 Example: Landing and take-off charges
source: SEO, Government Influence on Aeroneutical charges, p.7.
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 Example: Parking Charges
source: SEO, Government Influence on Aeroneutical charges, p.9.
SEO Study
 First Approach
source: SEO, Government Influence on Aeroneutical charges, p.9.
SEO Study
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Methodology
• Step 1: aeroneutical costs per passenger movement
source: SEO, Government Influence on Aeroneutical charges, p.13..
SEO Study
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Methodology
• Step 2: accumulation of the aeroneutical charges for all aircraft types
source: SEO, Government Influence on Aeroneutical charges, p.13.
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Methodology
• Step 3: Cost Comparisons
source: SEO, Government Influence on Aeroneutical charges, p.17.
SEO Study
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Methodology
• Step 4: analyses by aircraft type
source: SEO, Government Influence on Aeroneutical charges, p.22.
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
Cranfield University
 The issue of Comparability
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Different sets of activities
Different ownership structures
Different goals and objectives
No homogenous product or service
No standardised conditions
 adjustments
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
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
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
Conclusion
 Information needed:
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Public charges
Aeroneutical revenues
Flight movements
Info on specific aircraft types
Regulatory framework
Thank you for your attention!
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.