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Air transport

Michał Zajfert
2008-08-11
The number of passenger flights has been rocketing in the past several years. The barrier to further expansion is insufficient infrastructure – airports and access system. For the first time, however, substantial EU finance has been earmarked for airport growth. But is that enough? It isn’t – what is still required is to reorganise the market.
REKLAMA

Polish airports had a throughput of 19.1 mln passengers in 2007, that figure expected to rise by 20 pct this year. At the same time the number of passengers cleared through Warsaw’s Okęcie airport is steadily dropping; last year, for the first time, it was lower than the total number of passengers cleared through Polish regional airports. It is specifically regional airports which are to grow most rapidly in the next few years, Łódz, Wrocław, Katowice, Szczecin, Gdańsk and Poznań airports to lead the field.

Okęcie airport’s Terminal 2 was opened for business after several years delay but when its capacity is studied in conjunction with the growth rate of air transport it becomes obvious that this new object will become just as crowded in a few years as Terminal 1 is today. Its opening has not resolved the major problems facing Warsaw airport, to mention only the lack of sufficient public transport services. The principal barrier to the further expansion of Okęcie airport is its location in the centre of a major agglomeration. That is why a new airport is urgently needed in the Warsaw agglomeration, with much being said down recent years about adapting the military airport in Modlin for that purpose. The president of Mazowsze Province recently signed a decision concerning the environment provisions for the construction of that airport, which is to concentrate on servicing budget airlines and charter flights. The first passenger flights are planned for the I quarter 2010 at the earliest.
Another alternative, apart from Modlin, for Warsaw Okęcie could be a central airport as has been recently suggested but no specific location has yet been pointed out, government to take an appropriate decision on the matter at the year’s end. Having said that, the delay in constructing Modlin airport and the crowds at Okęcie airport offer Łódż and Radom regional ports a grand opportunity. Regular flights have been organised from the first mentioned for a number of years, with the passenger terminal also being enlarged.
The part played by regional airports in the rapidly growing air transport continues to increase, but regulation of land property rights with the military and creation of conditions in those ports for competition among fuel suppliers is imperative for further expansion. The infrastructure in six of those airports is being expanded with the Euro 2012 Football Championships in mind, much of the finance coming from EU grants with airport management companies and local governments ensuring own contributions. The army will be transferring large parts of Kraków, Wrocław and Bydgoszcz military airports to civilian authorities in long-term usufruct to ensure the further expansion of the civilian airports which have been built alongside those used for military purposes.

The relative EU directive requires that the land service in airports should be rendered by at least two bodies, one of which has to be independent of the airport and of the largest carrier operating in it. The requirements to ensure competition is common to all EU airports which serve at least two million passengers annually.. Only Warsaw Okęcie comes into that category among Polish airports, though Kraków and Katowice are near that ceiling. Only one company – Petrolot – owned by PLL LOT supplies fuel in Okęcie at present which contradicts EU provisions. Other areas of airplane service are also incorrect, e.g. there are, admittedly, two companies each which handle luggage, cargo, postal services and ramps but they are all controlled by the airport management company or by the largest carrier. Add to that the fact that none of those companies was selected through competition which is required by law. The European Commission summoned Poland to remove all those infringements. The earlier mentioned Petrolot is presently the monopolist in almost all Polish airports, with the exception of Wrocław where a company appointed by the port authorities also functions. The outcome is that fuel in Poland is among the most expensive in the world, according to carriers, and is only less expensive in Wrocław. The Lotos company intends to compete with Petrolot in Gdańsk airport at the end of the current year.
The policy of airport managers of protecting Petrolot’s monopoly is very short-sighted Fuel costs constitute a substantial item in air carriers’ costs, especially budget airlines. The price demanded for fuel is discouraging airlines from opening new connections, while budget carriers are resigning from plans they may have had to open their bases in Polish ports. The outcome is that the number of serviced arrivals and cleared passengers which are fundamental item in a port’s revenue, is growing more slowly that was possible should competition existed among fuel suppliers.

The situation of PLL LOT, the national carrier, is still far from clear. The State Treasury presently owns 67.97 pct of PLL LOT shares, the official receiver of SAirlines BV bankruptcy assets – 25.1 pct, while the remaining 6.93 pct of the shares is the property of the airline’s workers. The Treasury has reached agreement with the receiver and has established the principles under which LOT can enter the Stock Exchange, which is to take place this year. The agreement reached with the receiver is a positive step towards privatisation. The most beneficial for LOT would be for the Treasury to sell all its owned shares which would notably raise the appraisal of the company’s assets.
The “open sky” agreement reached between the USA and European Union became valid at the turn of March this year, liberalising trans-Atlantic air traffic and forcing airlines to compete. Till now servicing those flights was implemented only by national carriers by bilateral international contracts. The “open sky” agreement eliminates all restrictions concerning routes, prices and the weekly number of flights, but the benefits of those changes will surely not be felt straight away.

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