(MENAFN- The Peninsula) The Peninsula
The International Air Transport Association (IATA), which represents some 275 airlines comprising 83 percent of global air traffic, has called on the European Union (EU) to significantly strengthen economic regulation of major European airport monopolies by focusing on the interests of passengers.
Enforcing greater cost-efficiency at Europe's airports will feed through into cheaper air fares, stimulate travel and enhance European competitiveness. In turn, this will support jobs and grow the economy.The case for stronger airport charges regulation is seen in how European passengers have been denied the full benefits of cheaper air travel, as illustrated over the period 2006-2016 in a latest IATA study.
According to the findings of the study, the average cost of an air ticket remained virtually the same, including all ancillary charges such as hold bags, during the period, while the revenue portion of the ticket price for airlines fell from 90 percent to 79 percent. The report also shows that the portion of the ticket price taken by the airport doubled, and the passenger taxes also doubled during 2006-2016.
The report noted that had airport charges remained constant over the 2006-2016 period consumers could have benefitted, on average, 17 Euros per one-way trip. That price stimulus of nearly 10 percent of average tickets costs would have improved Europe's competitiveness, and potentially generated an additional 50 million passengers. In turn that would have unlocked €50bn in European GDP and created 238,000 jobs.
'Airlines, like all competitive businesses, are in a constant struggle to improve efficiency. Europe's airports however are largely insulated from competitive forces. Europe's light-handed Airport Charges Directive has failed Europe's travelers and its own competitiveness by letting airport charges rise. Tighter EU regulation is needed to stop airport monopolies from taking money from the pockets of travelers to reward investors, said Alexandre de Juniac, IATA's Director General and CEO.
The trend of increasing private ownership of European airports adds urgency to the situation.
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