Airlines rely heavily on airports. Therefore, the way an airport is operated affects airlines. This occurs, among other things, when airports set their rates and conditions. A dispute arose between the airline easyJet and the Authority for the Consumer and Market (ACM) concerning the setting of rates and conditions for Schiphol Airport. This article discusses this dispute and looks at important aspects of setting airport rates and conditions.
Determination of rates and conditions at Schiphol Airport
The Aviation Act and the Schiphol Airport Operations Decree 2017 prescribe how the operator of Schiphol Airport must determine the rates and conditions. An important part of this is to consult with users and representative organisations (legal entity designated by ministerial regulation to represent the interests of users);
Prior to the determination of the rates and conditions – which takes place once every three years in accordance with Article 8.25d paragraph 1 of the Aviation Act – the operator issues a proposal for the rates and conditions. This proposal must be accompanied by a substantiation of the effects of the new rates and conditions proposed.
Influence of users on determination of rates and conditions
Users – such as easyJet – can make their views known to the airport operator within four weeks (Article 8.25da paragraph 2 Aviation Act). The operator must include the views in its determination and indicate whether the views have led to any changes.
It also follows from the Aviation Act that the charges and conditions must be reasonable and non-discriminatory (Article 8.25dc paragraph 1 Aviation Act) and that charges may be differentiated for reasons of public interest, including environmental protection.
Users and representative organizations may – if necessary – submit an application to the ACM to establish that the operator’s rates and conditions are contrary to the Aviation Act. The ACM must take a decision on the entry into force of the rates and conditions within four weeks and a decision on the application within four months.
Case at Board of Trade Appeals:
Do the Schiphol 2019 rates and conditions violate the Aviation Act?
In this case with judgment on 14 September 2021, easyJet was of the opinion that the Schiphol rates and conditions as determined as of 1 April 2019 were in conflict with the Aviation Act and the Operating Decree. easyJet therefore submitted an application to the ACM as described above. The ACM rejected the application and ruled that there was no conflict. Consequently, easyJet lodged an appeal with the Dutch Trade and Industry Appeals Tribunal (CBb).
In this case the CBb assessed whether the rates and conditions had been determined according to the correct procedure and whether users had been correctly involved in view of the views they had expressed. It also assessed whether the tariffs met the requirements of reasonableness, non-discrimination and cost-orientation.
Objection easyJet: 2019 fares and conditions are contrary to Aviation Act
easyJet put forward three reasons on the basis of which it believed the ACM had wrongly rejected its application. First of all, the users were allegedly insufficiently involved in the determination of the rates and conditions. Secondly, the users were insufficiently involved in the determination of the investment program. Finally, the tariffs and conditions would be unreasonable and discriminatory. The CBb ruled that these grounds for appeal of easyJet do not succeed.
Involvement in rate setting
easyJet was first able to express its views on the rates and conditions proposal. The statement that there was no involvement is therefore incorrect. The fact that the quality indicators in the proposal were drawn up without easyJet’s involvement does not detract from this.
Rate Structure Sufficiently Reasoned
The CBb also disagrees with easyJet’s argument that insufficient reasons were given why Schiphol did not want to change its rate structure. In fact, Schiphol did respond to easyJet’s view and argued that it was not appropriate in view of the existing congestion at the airport. EasyJet was also consulted on the further content.
Objection investment choices unfounded
With regard to the investment programme, Schiphol also responded to easyJet’s view. The investment choices were further explained in response to the view.
Furthermore, the CBb considered that Schiphol did indeed violate Article 16.1 opening words and under (b) of the Exploitation Decree by not mentioning a certain effect in the investment programme. However, this mere breach does not justify the conclusion that the rates and terms and conditions are contrary to the Aviation Act and the Exploitation Decree, because compliance with this section does not result in material changes.
When are rates and conditions reasonable and non-discriminatory ?
Finally, easyJet argued that the tariffs and conditions are both unreasonable and discriminatory for Low Cost Carriers, such as it. It believes that the tariff structure is unreasonable and discriminatory since it does not use all facilities, but does have to pay for them. Also, the facilities of the different piers are different, but the same tariffs apply.
However, the CBb ruled that this chosen structure is not unreasonable or discriminatory, since the facilities are available. The fact that easyJet has made the choice not to use them does not make this any different. It is not by definition unlawful that differences exist between the piers. That the capacity and/or facilities of certain piers should be increased is not the subject of these proceedings. What is at issue, after all, is the lawfulness of the determination of the rates and conditions.
Deviating Facilities Do Not Lead to Conflicting Rates or Conditions
According to the CBb, users such as easyJet are sufficiently involved in the determination of the rates and conditions, as the ACM previously ruled. The fact that easyJet in particular uses a certain pier (H/M pier) and the facilities are different from other piers does not make the rates and conditions contrary to the Aviation Act and the Operating Decree.
Want to know more about the Aviation Act and the Operating Decree?
Please contact LVH Advocaten in Rotterdam if you would like to know more about aviation law and, more specifically, the setting of tariffs. LVH advocaten regularly assists airlines in all kinds of legal matters.
