New government points the way ahead

According to their coalition agreement, CDU/CSU and SPD want to see improvements in efficiency and customer-friendly security checking processes. It is the view of the Lufthansa Group that this theme is critical if we are to strengthen Germany as a location for air transport. The current scenario in Germany is that the federal police is responsible for a broad spectrum of tasks. Decisions on what technology is used, the sequence of processes, the number of personnel employed at each checkpoint and how the level of quality is assured are all the responsibility of the authorities. Structured collaboration with the air traffic industry has been intensified over the past year. For good reason – every day more than 400,000 passengers put their trust in the airlines of the Lufthansa Group alone.

Develop successful collaboration

A groundbreaking example here is a pilot project at Cologne/Bonn Airport which has been concluded in the meantime – the federal police, security services, and a number of experts from the airport and the Lufthansa Group have worked together to develop and set up a completely new kind of security check area for the airport. Never before has there been such close collaboration between the air transport industry and the federal police. The project was a success – whilst retaining a consistently high level of security, the level of efficiency of the security technology and checking procedures was significantly improved. There was also a positive response from passengers and employees to the clearly arranged and friendly design of the security check area.

Cologne/Bonn has demonstrated that it is possible in Germany too to achieve an intensive systems partnership in the area of aviation security checks – as has been the practice in other EU states for many years. This collaboration is becoming even more important as the continuing rise in passenger numbers brings with it additional challenges for the security check areas. It is today already the case that many travelers see the security checks as not only necessary but also very time-consuming.

The federal government must go ahead

Lufthansa supports the federal government in incorporating the positive results achieved in Cologne/Bonn into the current legislation of many other airports. This also applies to the evaluation and establishment of new models regarding the responsibility for the setting up and management of aviation security check areas.

Three themes need to be given priority

The lost opportunities for growth are closely associated with national charges which other air transport locations do not have to reckon with.

• Aviation tax – in 2017 alone, German airlines had to pay EUR 590 million to the tax authorities in aviation tax. There are very few countries that place such demands on their airline industry – in fact, quite the opposite. Austria recently cut their aviation tax in half; Ireland and the Netherlands have abolished it completely. Three countries, one goal – to get rid of additional charges in order to stimulate growth far beyond just the airline industry. The figures for Germany are also convincing. According to the calculations of PricewaterhouseCoopers, abolishing aviation tax by 2020 would trigger an annual GDP growth of EUR 4.1 billion, would create 12,000 new jobs – and in doing so would bring in increased income for the tax authorities.

• Aviation security costs – in Germany, the costs for security checks on passengers and baggage are charged to the airlines in the form of aviation security fees. Between the years 2011 and 2017, these costs increased by 64 percent to EUR 693 million per year. In Germany, this figure is passed on in full to the airlines. The situation is different in Italy, Spain and the US, for example, where the state assumes up to two thirds of the costs. There is good reason for this, as the protection of citizens against terrorist attacks—which is, after all, the objective of the security checks—is one of the state’s core tasks. This is also the way the new federal government sees things and, according to the coalition agreement, they are in favor of the state taking on a larger share of aviation security costs.

• Operating hours – even as things stand today, the restrictions imposed on night flying in German airports are considered strict by international comparison. For example, Frankfurt, as an international hub, is completely closed between the hours of 11.00 pm and 5.00 am – a stark contrast to all comparable competitor airports in Europe and the Middle East. As the infrastructure—which cost many billions of euros—has therefore to be amortized within shorter working hours, the German air transport sector is effectively more expensive in structural terms. The ever-increasing additional fees levied on noise-related charges also represent a financial burden for airlines and lead de facto to a ban on night flights in economic terms.

Long-haul routes – indispensable for mobility within Europe

The major hubs such as Frankfurt, London and Paris are known for their flight connections with the whole world. What is less well-known is the fact that these airports also play a decisive role in providing a diversity of flight connections – known in Brussels jargon as connectivity – within Europe. These long-haul routes are connected by dozens of feeder flights going across Europe. These include flights which are not only booked by long distance travelers but also by passengers whose destinations are within Europe. If the customer group of long distance travelers shrinks, then many routes to the hubs will no longer be worth operating – and the diversity of connections between the regions will decline.

“Airlines are subjected to an enormous amount of pressure from competitors. Many of the large airports have things somewhat easier, however. At the end of 2017, as the world's largest airline association, we carried out an evaluation using an extensive volume of data. The bottom line – countless major airports are able to exercise a significant degree of market power. We are asking our politicians to harness this power through a fair system of regulation.

The airlines have very little freedom in their choice of destination airports. Firstly, in order to run a profitable operation, they have to respond to the preferences of their passengers. They will otherwise lose customers and will be operating flights that are only half-full. Secondly, it is extremely costly to relocate long-haul flights—which are linked with countless feeder flights—to any great extent or even completely. Thirdly, the capacities of potential alternative locations are limited. Overall, this has led to a situation in which the major airports have a significant degree of market power.

Evidence of this can be seen in the disproportionate increases in airport charges. Our analysis has shown that, between 2006 and 2016, the proportion of airport fees in ticket prices more than doubled. If these had remained constant in the same period, the consumer would have been able to save an average of EUR 17 per flight. At the end of the day, it is the consumer who loses out.

Where balancing market mechanisms are not effective, then politicians need to take action in the interest of the location in question. We expressly advocate a 3-tier regulatory system depending on the level of market power of the particular airport. In accordance with this, airports with a good deal of market power would be comprehensively regulated by an independent body. A possible candidate for Germany would, for example, be the Federal Network Agency who have for many years ensured fair conditions for those participating in sectors such as rail, post and telecommunications. With airports which only have a moderate degree of market power, this is not so necessary. In this case, it would be sufficient for stricter EU guidelines to be adopted than those in use to date. For the remaining, mostly smaller airports, the existing EU and international provisions are adequate.

Through their passengers, the airlines bring the airports millions of euros in commercial revenues. This needs to be taken into consideration in the airport fees which are ultimately paid by the passengers in their ticket prices.”