Annexure II - AERA

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