Iberia, Lufthansa and Vueling demand $1 billion from Aena
The employers’ association IATA is asking the court to remove Covid costs from the rate calculation base and is seeking a reversal of the increase approved by the Council of Ministers this year.
Aena and airlines through the International Air Transport Association (IATA) in Spain have opened several procedures in which at least 3.5 billion euros are at stake. This is Ena’s demand for compensation.Sado because of the consequences of the pandemic (according to one estimate, 2,500 million) and the companies’ resources for airport taxes, in which several billion are at stake in the period 2023-2025. The main IATA partners operating in Spain are Iberia, Vueling, British Airways, Air Europa, Binter, Volotea, Air France, KLM and Lufthansa, among others.
While the first issue appears to be the most important due to the amount (see attached information), sources close to Aena and the airlines agree that due to the potential for prosperity and its long-term implications, the most important issue is tariffs. .
There are two main differences that will be resolved in court. The first concerns administrative proceedings in the National Court and concerns the health and safety costs that Ene has had to incur to combat Covid. Airlines say the costs are already built into the 2022 fare, so fares for subsequent years should be calculated on a 2022 basis, discounting Covid costs.
Another point relates to the annual application of the airport tax renewal formula. The airlines argue that a 2014 law governing Aena – when it went public – means that, in practice, fares cannot rise (but can be reduced) until 2025 inclusive.
Uncontrollable expenses
The main problem is growth in 2024, which was 4.09%, 0.59 points due to improved service delivery by Aena and 3.5 points due to increased external costs, over which the group chaired by Maurici Lucena has no control (P factor), mainly energy and inflation in general.
The P factor of more than 1% was due to be approved by the Council of Ministers on January 30, with fares remaining at the current level of €10.35 per passenger.
Court and Supreme
The issue of tariffs is considered in two areas. On the one hand, the decisions of the National Commission for Markets and Competition (CNMC) are being appealed to the National Court of Justice, in which it authorizes the increases for 2023 and 2024. In addition, IATA also submitted the P factor to the Supreme Court – which accepted it for processing – since it is a decision of the Council of Ministers.
The airlines argue that the increases in recent years have gone beyond the legal framework, so the additional costs they are calculating for the period 2023-2025 amount to around one billion euros. The P factor and Covid costs are weighted similarly in these reports.
The sector also argues that what it believes is a miscalculation of rates affects future payouts as they will be calculated on a higher basis (equivalent to 300 million per year forever). They also criticize that Aena has not made enough efforts to improve efficiency and that record 2023 profits of €1.631 million and a dividend distribution of €1.149 million prove post hoc that the pandemic crisis was not that severe.
Tariffs price
The sector says fares should now be €9.14 per passenger, up from €10.40 now.
On the other hand, Aena believes that it can increase costs that it cannot afford (the P factor), as well as indicators that measure the quality of its services; He claims that efficiency has improved and claims that the CNMC supervisor agreed with him by authorizing the increase.
He also explained that today’s fares are 6.9% lower than in 2015, the first year in which no fare increases were applied, and that the 2024 increase of 0.4 euros per passenger will have little effect on the ticket price. ticket.
WHAT ARE THE PRICES?
The amount that airlines—passengers themselves—pay for the services Aena provides to them at the airport.
HOW MUCH DO YOU PAY?
Since 1 March last year, 10.35 euros have been paid per passenger, which is 0.4 euros more than before the last revision and 6.9% less than in 2015.
WHAT IS THE PROBLEM?
Airlines say the law requires them to freeze fares until 2025 at the earliest, but Aena says there are exceptions to the hike.
DO THEY ALWAYS COME BACK?
IATA, the Airline Association, Ryanair, Lufthansa and Emirates are among those who use the services occasionally or systematically.
WHAT IS HAPPENING NOW?
IATA is asking for the increase in recent years to be reversed and has received permission from the Council of Ministers for a 3.5% increase to the Supreme Court.
EAT MORE?
Aena is seeking compensation for the loss of business due to Covid and is trying to overturn a law that reduced business income due to Covid.
Possibility of Dora reopening due to Covid
Another major conflict between Aena and the airlines relates to Covid losses between 2020 and 2021, which the airport manager wanted to pass on to the airlines. To this end, he demanded the renewal of the Airport Regulations Document 2017-2021 (Dora I). Aena was protected by the law regulating it, 18/2014, in article 27 of which the reasons are established that allow modification of the Dora. These include “any non-Aena event that is unforeseen, provided that it has a definite and significant impact on the financial viability of the network”, which explicitly mentions “network-wide reductions of more than 10% caused by natural disasters, terrorist acts or war situations,” although the pandemic was not foreseen.
The General Directorate of Civil Aviation, by its decision, denied the listed company the right to compensation. Ena filed a refusal with the Madrid Supreme Court, and the judge granted Ena’s request to “reopen the process” to, among other things, hold a hearing before drawing up a resolution.
According to information accessed by this newspaper, Aena’s claims will amount to around 2.5 billion euros for revenue it no longer has, although the airport monopoly says it has never made a financial request. On the other hand, CNMC estimates that in 2020 alone, the impact of the tariff deficit will amount to 1.365 million.
“Aena believes that all the requirements stipulated in the above-mentioned Article 27 for the modification of the Dora and the provision of economic rebalancing provided for in the said resolution have been fulfilled,” the company said in its latest reports. Airlines that trust Civil Aviation to meet its criteria argue that past debts cannot be included in future Doras.