NMa Study on the economic market power of Schiphol

NMa Study

on the economic market power

of Schiphol

Consultation Meeting

Program

13:30 – 13:45 Introduction (NMa)

13:45 – 14:00 Scope of the study (NMa)

14:00 – 15:00 GAP study (GAP)

Introduction: Project overview

( Study of the economic market power of N.V.

Luchthaven Schiphol on the relevant market(s) for aviation(-related) services on Schiphol Airport

( Request of the Ministry of Transport: part of the evaluation of the Aviation Act (‘Wet Luchtvaart’) ( Advisory board: Ministry of Transport, Ministry of

Introduction: Evaluation Aviation Act

( Aviation Act (‘Wet Luchtvaart’) effective since 2006 ̇ Partly based on NMa report 2001 on economic

market power of Schiphol ( One of the central questions:

̇ Do current market conditions still justify sector-specific regulation of charges and conditions? ( Evaluation ready in the course of 2010, includes:

̇ NMa study on economic market power situation

August September October November December January February March Progress meetings Advisory board Study definition & supplier selection

Introduction: Process

GAP Schiphol Study

2009

Consultation Meeting

Reporting NMa Schiphol Study Reporting

2010

Publication

Program

13:30 – 13:45 Introduction + Process (NMa)

13:45 – 14:00 Scope of the study (NMa)

14:00 - 15:00 GAP study (GAP)

Scope: Phasing

1. Scope of the study

( NMa and Ministry of Transport:

Aviation and aviation-related activities

2. Study on the economic market power

( Aviation and aviation-related activities

( Executed by German Airport Performance (GAP)

3. Assessment of advisability of (continuation of) sector-specific regulation

( Risk of abuse of market power?

Scope: Aviation activities

Dutch Aviation Act:

1. Aviation activities are activities of the airport operator to facilitate: Ü Take-off and landing of aircrafts, including at least the use by aircrafts of

taxiways, runways and platforms

Ü Aircraft parking, including at least the use by aircrafts of the parking facilities on the airport

Ü Processing of passengers of aircrafts and their luggage related to take-off and landing of aircraft, including at least:

• The use of the passenger terminal, and • The use of access roads

Ü Security of passengers and their luggage, including the facilities for customs check

2. Activities directly connected to aviation activities: Ü Granting concessions for (re)fueling of aircrafts

Ü Granting concessions for catering of aircrafts Ü Utilities

Scope: Business areas Schiphol

Area sizes in line with 2008 sales levels

Aviation-related

Scope: Other activities

( Remaining activities in three business areas

1. Consumers

2. Real Estate

3. Alliances & Participations

Not in scope:

• Market structures do not point towards market power

• No reason for pro-active NMa research

• No complaints

• Few signals, but no base for further analysis

• Sector-specific regulation not advisable

1. Consumers

• Market structures:

• Parking: alternatives around Schiphol; other transportation

• Shops & Catering: part of wider geographic market

• No reason for pro-active NMa investigation

• No complaints

• Few signals

• Review of signal information: No suspicion of competitive issues

• Sector-specific regulation not advisable

General competion law sufficient

2. Real Estate

• Market structures:

• Real Estate: alternatives around Schiphol (Hoofddorp, Badhoevedorp, Amsterdam Zuid-as)

• Compare Commission ROL (Ruimtelijke Ontwikkeling Luchthavens)

• No complaints

• Few signals

• Review of signal information: No suspicion of competitive issues

• No reason for pro-active NMa investigation • Sector- specific regulation not advisable

General competion law sufficient

3.

Alliances & Participations

• Mainly concerns foreign markets where NMa has no

authority

• No reason for pro-active NMa investigation

• No complaints

• No signals

• Stakes in local (and foreign) airports taken into

account in GAP study on market power of Schiphol, but otherwise irrelevant

General competion law sufficient

Program

13:30 – 13:45 Introduction + Process (NMa)

13:45 – 14:00 Scope of the study (NMa)

14:00 - 15:00 GAP study (GAP)

Program

13:30 – 13:45 Introduction + Process (NMa)

13:45 – 14:00 Scope of the study (NMa)

14:00 - 15:00 GAP study (GAP)

( Objective:

Ü Given economic market power on relevant market(s) is (continuation of) sector-specific regulation

advisable or is general competition law sufficient? ( Focus on advice for or against sector-specific

regulation

Ü Ministry of Transports decides on regulation

Ü Regulatory regime is object of evaluation Aviation Act

Ü No NMa advice on content of regulation

( General competition regulation is based on NL/EU competition law

( Sector-specific regulation sets additional conditions to prevent abuse of market power

( Preference for sector-specific regulation when potential competition issues require frequent, more extensive or efficient measures

Ü Analysis of risk of abuse, and

Ü Cost/benefit analysis of sector-specific regulation

( Network industries often have sector-specific regulation

Markets and activities

TE2-3 TE1

Tenancy / Rentals TE1-3

Access for groundhandlers GHS1-11

Market categories with market power

Aviation-related activities

Aviation activities ATO1-3

2. Market for the access to

infrastructure for groundhandlers 1. Market for the

provision of infrastructure to

airlines

Activities

Aviation Activities ATO1-3

( Risk of abuse of market power

Ü Opportunity and incentive to increase charges for airlines

(or other forms of abuse)

( Considerations of Aviation Act still valid:

̇ Frequent complaints on charges to be expected.

̇ General competion law not effective due to long procedures

and only invention after problem has occured

Continuation of sector-specific regulation advisable

Advice on Market category 1

Access for groundhandlers GHS1-11

( Risk of abuse of market power

Ü Opportunity and incentive to set charges for groundhandlers

Ü Currently only concessions for refueling

( Considerations

Ü Activities related to Aviation activities: better to regulate both

Ü Consistency of regulation: regulate all access to

groundhandlers

Ü Minimal cost of regulation: fits into current regulation

Sector-specific regulation advisable

Advice on Market category 2

Tenancy / Rentals TE1-3 (part of market categories 1 & 2)

( Risk of abuse of market power

Ü Incentive based on profit maximizing behavior

Ü Operationally required spaces

( Considerations

Ü Rents currently in line with rents for spaces not operationally

required: locational rents

Ü Harder to regulate: which spaces are operationally required,

how much space is required etc. : Costs outweigh benefits

General competition law sufficient

Markets and activities

Tenancy / Rentals TE1-3

»

Access for groundhandlers GHS1-11

Advice on regulation

Aviation-related activities

Aviation activities ATO1-3

General competition law sufficient Sector-specific regulation advisable Activities

( Study on the economic market power on aviation(-related) activities on Schiphol airport

( Two relevant market categories defined (+subdivision)

1. Market for the provision of infrastructure to airlines

2. Market for the access to infrastructure for groundhandlers & others

( Economic market power found on both market categories

( Advice on regulation

Ü Continue sector-specific regulation on aviation activities

Ü Include all access for groundhandlers in sector-specific

regulation

Ü General competion law sufficent for rentals and other

Program

13:30 – 13:45 Introduction + Process (NMa)

13:45 – 14:00 Scope of the study (NMa)

14:00 - 15:00 GAP study (GAP)