Annexure II - AERA
Annexure II - AERA
Annexure II - AERA
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NERA<br />
t COllorrlic COflS ultir1Cl<br />
The EU Directive, that explicitly mentions policies on airport charges endorsed by ICAO,14<br />
states that:<br />
"It is necessary to establish a common framework regulating the essential<br />
features ofairport charges and the way they are set [. ..}. Such a framework<br />
should be without prejudice to the possib1l1ty for a Member State to determine if<br />
and to what extent revenues from an airport's commercial activities may be<br />
taken into account in establishing airportcharges." (Emphasis added)"<br />
The above quotation provide evidence that the EU Directive, in coherence with ICAO policies,<br />
"does not prescribe the basis on which airport charges should be set, and explicitly leaves<br />
open key issues such as the regulatory till,,16<br />
The conclusions drawn by <strong>AERA</strong>, according to which "no definitive position for or against any<br />
form of regulatory till is available on this issue in the EU directives" implicitly recognize that<br />
ICAO principles allow dual till and hybrid till regulation, and not only single till. 17<br />
4. Regulatory approaches adopted in other countries<br />
The Convention on International Civil Aviation (also known as the Chicago Convention), which<br />
set up ICAO, was signed in 1944 and, after that date, was ratified by the single States. Currently,<br />
about two hundred countries are numbered in the contracting States.<br />
The regulatory approaches - in terms of regulatory till- adopted at national level by the single<br />
States that have ratified the Chicago Convention can differ significantly.<br />
In some countries the regulatory framework is based on an ex post regulation, also known as<br />
"light handed" regulation. Under this approach, there is no explicit ex ante regulation of prices<br />
(i.e. airports may freely set prices); prices are subject to ex post monitoring from Competition<br />
Authorities. However, regulation shall be imposed if airport performance is considered to be<br />
poor (e.g. if airports reduces service quality beyond certain critical levels). Ex post regulation is<br />
currently implemented, inter alia, in Australia and New Zealand.<br />
14<br />
15<br />
Idem, par. 9, lOand 17 ofthe Preamble.<br />
Idem, par. 2 of the Preamble.<br />
16 Dr. Francesco Lo Passo and David Matthew. NERA (2009), The EU Directive on Airport Charges: Principles. Current<br />
Situation and Developments.<br />
<strong>II</strong> <strong>AERA</strong> (2011), Order No. 13/2010-11 , In the Maller of RegulatoryPhilosophy and Approach In Economic Regulation of<br />
Airports Operators, par. 5.32 . .<br />
<strong>Annexure</strong> <strong>II</strong>-B<br />
CP No. 9/2013-14/T-12023(14)/1/2012- Tariff- Vol - <strong>II</strong>I <strong>Annexure</strong> <strong>II</strong>-B Page 23 of 51<br />
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