Airlines are stepping up their campaign over rising charges in Argentina's recently privatised airport system but some believe this is flying in the face of standard airport practice.
Iata led a high level delegation to the Argentinian government and regulators in early August to seek a revision of the terms of the long-term concession awarded to the Aeropuertos Argentinas 2000 (AA2000) consortium to operate 33 of the country's airports including Ezeiza, Aeroparque and Cordoba. However, Iata's appeals have fallen on deaf ears.
Iata is concerned that airlines will be faced with escalating airport charges as the consortium, led by Milan airport operator SEA and Ogden of the US, searches for revenue streams to cover the $171 million annual concession fee it agreed to pay the Argentinian government and a compulsory $1.3 billion capital investment programme.
Julian de la Camara, Iata's director of user charges, says the commercial to aeronautical revenue ratio of 35:65 is the opposite to the UK's privatised airport operator BAA plc. He does not believe that AA2000 can raise enough revenues from commercial sources. 'I don't see how the consortium can do this in a quick way - it will take a long time to have the ratio better compensated.' AA2000 does not know the real state of financial affairs at the airports, claims de la Camara, and has failed to produce a cost-related budget that justifies the rates of return it is demanding.
Prior to privatisation, the passenger tax was raised by 35 per cent and a number of new charges, such as air bridge and approach charges, were imposed. Although aeronautical charges were subsequently fixed for five years under the terms of the concession, baggage handling and rents for check-in counters, VIPlounges and other office space, are not capped. This means that charges could be raised dramatically. Jorge Cubero, executive secretary of the Argentinian board of airline representatives, Jurca, claims AA2000 plans to raise land rentals from $14.7 to $40 per square metre. 'Personally I'm afraid charges for airlines will not go down. They will be increasing,' he says.
Airlines want guarantees from the government and regulators. 'If other fees are not regulated what guarantee can they give us that they [AA2000] don't go wild', says Iata's de la Camara.
Iata is also attacking the subsidy by the government - through the large annual privatisation concession fees - and the consortium, through high charges at its international airport, of smaller regional airports. De la Camara claims that only four of the 33 airports now run by AA2000 are profitable, and complains that all the concession money is going to be spent on airports international airlines rarely benefit from.
However one US-based airline consultant says cross subsidisation is standard practice worldwide, including for model privatisations as BAA. Rental fees are not regulated anywhere, he adds. He also claims that aeronautical charges in Argentina are no higher than anywhere else in Latin America and that charges were articifially held down under state ownership while much needed capital investment was postponed. 'I suspect that in any event rates and charges are going to go up - the question is how much and how fast,' he says.
Meanwhile Iata's de la Camara says airlines are not planning to refuse to pay bills and admits the government will be 'difficult to challenge'.
Source: Airline Business
