Benchmarking of User Charges Introduction and Methodologies Presented by Pauline Wentzel and Sylvana...

Benchmarking of User Charges

Introduction and Methodologies

Presented by Pauline Wentzel and Sylvana Thiele

Overview

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 chargesCharge 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.

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

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:• Amsterdam Airport Schiphol• Frankfurt• London Heathrow • London Gatwick• Paris Charles de Gaulle• Paris Orly

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

SEO Study

Example: Landing and take-off charges

source: SEO, Government Influence on Aeroneutical charges, p.7.

SEO Study

Example: Parking Charges


SEO Study

First Approach


SEO Study

Methodology • Step 1: aeroneutical costs per passenger movement

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

SEO Study

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


SEO Study

Methodology• Step 3: Cost Comparisons


SEO Study

Methodology

• Step 4: analyses by aircraft type


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

adjustments


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


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:• 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.

Benchmarking of User Charges Introduction and Methodologies Presented by Pauline Wentzel and Sylvana...

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