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Benchmarking of User Charges

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

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Benchmarking of User Charges

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  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 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 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.

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