IACA Position Papper on Aviation Security Funding

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IACA Position Paper_Security Funding

IACA Position Papper on Aviation Security Funding

IACA's response to the European Commission's Consultation on Financing of Aviation Security.

A. Introduction Art. 22 of Regulation (EC) No. 300/2008 on common rules in the field of civil aviation security obliges the European Commission to present a report on the principles concerning the financing of related security costs. In June 2008, the Commission has launched a consultation process in order to gather stakeholders' views on this matter. Through this Position Paper, the International Air Carrier Association (IACA) wishes to contribute to the debate from the perspective of leisure airlines.

B. IACA's general opinion on the subject

On the final responsibility for the funding of aviation security measures:

Terrorism targets governments, not airlines.

Therefore, all costs linked to security measures that are designed to mitigate such terrorism risk should be paid by governments, not by airlines or their passengers.

IACA is disappointed to note that the Member States continue to disregard their responsibility for the funding of security measures (both in Regulation EC 300/2008, as well as in the current discussions leading to the future Directive on airport charges). IACA cannot accept that EU Member States are trying to escape the financial consequences of threats for which they are the target (and not the airlines). In the end, Member States should pay for measures to protect citizens against acts that are targeted against governments.
The question on “who pays” is both a political and an economic question. In the current financial crisis that is affecting the aviation industry, there is no room for unjustified security charges upon airlines.
IACA deplores that the Commission's document mixes up the issues of security and safety, when it compares the funding of aviation security with the funding of road safety. IACA notes that the aviation sector pays for security and safety, whilst the security measures facing aviation do not apply to the road sector. Despite unfortunate terrorism attacks on public buses and trains in Europe, these modes of transport still benefit from distorted competition with airlines, as they face less strict security measures.

On the possibilities to pass on security charges to the customer:

IACA regrets that so many people continue to believe in the myth that airlines are able to pass on any additional cost to their passengers. Typically in their today's liberalized market, carriers are able to include no more than one third of extra charges or costs in air fares. Once they do include these costs in ticket prices, price elasticity creates a negative effect on their demand, especially in the case of leisure travel.

On the “the user pays” principle:

In contrast to many parts of the transport industry, the “user pays” principle is applied in the aviation sector. Today, airlines or their passengers fully pay for all the infrastructure required for the intended service provision, i.e. for the transport of passengers and goods by air. However, the potential misuse of aircraft by terrorists as a weapon against governments is obviously not part of the industry's activity. Therefore, the “user pays” principle should never apply to the funding of security measures that avoid such terrorism risk.

C. IACA's opinion on the options described in the Commission?s consultation paper.

IACA regrets that the fundamental question (i.e. who bears the ultimate cost of aviation security) is carefully avoided in all four options suggested in the Commission's paper. IACA hopes that the European institutions will have the courage to tackle this fundamental debate about the final responsibility for their citizens' security.

Furthermore, there is one funding option missing in the Commission's list, namely the collection of money from passengers by airports, instead of the collection through airlines. Indeed, airlines fail to understand why they should be the charge/tax collectors on behalf of other entities, without being compensated for this activity which ultimately harms their company image in the travelling public.

Instead of preferring a single option, IACA favours a combined approach, based on design elements inherent to the four options suggested by the Commission.

1. An EU Directive

IACA would welcome a Directive, subject to the following design:

a.The Directive should be based on the principle that all costs referring to terrorism protection against States should be borne by public funds.

b.Member States that impose more stringent measures than the agreed EU security standards should in that case organize public funding for the extra costs.

c.There should be absolute transparency on security charges, based on consultation.

2. Harmonization of security measures at EU levels

IACA would welcome a harmonisation of security measures at EU levels for reasons of transparency and in the interest of offering a seamless travel concept to the public.

3. Mandatory one-stop security on intra-EU services

IACA is in favour of implementing a one-stop security concept within the European Union and would welcome the removal of re-screening requirements for EU-originating traffic.

4.International initiatives on principles for the financing of security costs

In order to safeguard a global level playing field between all aircraft operators, IACA would welcome any move from the European Union to harmonize security matters through ICAO. In the current context of global competition and liberalisation of intercontinental routes, it is unacceptable for European airlines continue to be faced with the obligation to fully fund aviation security, whilst their competitors benefit from their governments' policy to pay for security measures that protect citizens against the consequences of unlawful use of aircraft against states.

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Publication Date: 20 Aug 2008


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