EC wants transparency in aviation security financing

European Commission (EC) regulators have adopted a report outlining their position on financing aviation security measures, calling for greater transparency and commonality in applying security charges to limit the risk of competitive distortion.

Significantly, the report also affirms that public funding of security measures in the aviation sector, in general, does not constitute state aid.

EC transport commissioner Jacques Barrot says: “The protection of citizens against terrorist attacks must remain a top priority. Security measures in aviation and maritime transport are also to be financed by public authorities, but without distortion of competition.”

The EC report, requested by the European Parliament and Council, is based on two studies covering the financing of security measures in the aviation and maritime industries. The EC civil aviation security financing study, on which today’s adopted report is based, was concluded in late 2004.

The EC estimates security charges on intra-European flights comprise up to 2% of the average air fare and notes two basic models of financing security charges exist within Europe: a centralized scheme where state bodies provide the main security activities and a decentralized scheme where airport authorities provide the service.

“However, in both models the passenger is ultimately the main financer of security through taxes or airline security charges,” the EC says, although it does note that, in the majority of countries, passenger funding in 2002 did not cover the full security costs, with a majority of states leaving the burden of financing such deficits on airports.

It concludes increased transparency relating to security taxes and charges would give users better information and provide a clearer insight into possible effects on competition.

“The current lack of transparency increases the difficulty to identify potential distortions,” the EC report says, noting the differing approaches means there is the possibility of some distortion in competition. “This is particularly relevant in cases where member states require additional, more stringent measures than those imposed by Community legislation.”

It also points to possible distortions on a global level based on different approaches to funding security measures, citing as an example strong public assistance on security costs granted by the USA.

“This issue needs to be addressed so as not to disadvantage the Community’s transport industry in comparison with its competitors from outside the EU, with its consequential negative effect on EU economic growth,” it says.

“It should therefore be ensured that similar principles are being applied to the European transport industry’s competitors in third countries by the governments responsible for them, preferably in the form of agreements in international fora such as ICAO or IMO, or failing that, bilateral agreements.”

It concludes that public funding of security measures would generally not be viewed as state aid.

“The EC considers that, in view of the fact that the protection of European citizens against terrorist attacks is essentially a state responsibility, public funding of actions to prevent such acts does not constitute state aid, as it is connected with the exercise of powers that are typically those of a public authority.”

Source: Air Transport Intelligence news