25.1.2012
Competition Council closes the Terminal A-case

Today, the Danish Competition Council closed the so-called Terminal A-case. The Danish aviation legislation does not allow for the establishment of an independent terminal on the grounds of Copenhagen Airport. A number of independent competing terminals could harm safety and security among other serious issues. Thereby, the competition case against Copenhagen Airport has ended.

At their meeting today, The Danish Competition Council decided to close the so-called Terminal A-case, which revolved around whether a number of investors were allowed to operate an independent competing low-cost terminal on the grounds of Copenhagen Airport. The Danish Transport Authority has informed the Council of its assessment that the Danish aviation legislation does not allow for several different companies operating independent terminals at Copenhagen Airport. The assessment closes the competition case.

Copenhagen Airport is satisfied that the competition case is over, and Vice President for Communications, Henrik Peter Jørgensen, points to the fact that the legislation is like it is for a good reason.

“It is important that the responsibility for the overall safety and security is placed with only one company and not divided between a number of companies. That responsibility lies with us. A scheme with multiple competing terminals would render the assignment of responsibility unclear and result in numerous practical, safety and security-related and regulatory problems. That is why there is no such scheme anywhere else in the EU,” said Henrik Peter Jørgensen, VP for Communications, Copenhagen Airport.

The conclusion of the regulatory authorities is in line with the explanation Copenhagen Airport gave to the investors behind the Terminal A-case in 2008, when they approached the airport with the idea for the first time.

Problematic to Amend Legislation
“Apart from the fact that a terminal operated by another company would create a lot of safety, security and logistic-related problems in itself, Terminal A would also be a poor solution for passengers and airlines. For instance, it was the plan that passengers and their luggage were to be transported across the airport in sealed busses, because the planes were to park 2.5 km from the terminal,” said Henrik Peter Jørgensen.

Like in previous similar cases, the Competition Council has approached the minister responsible, in this case the Minister for Transport, Henrik Dam Kristensen, with a recommendation to take a closer look at the legislation. However, according to Copenhagen Airport it is a really bad idea to amend the legislation.

“Naturally, the decision to change the legislation is entirely political, but there are good reasons for why the legislation says what it says today. Firstly, an amendment cannot be implemented by Denmark alone, because such an amendment requires a change in EU legislation as well. Secondly and most importantly, allowing for the opening of independent terminals will lead to a number of major practical, safety and security-related problems,” said Henrik Peter Jørgensen.
 

Facts about the Terminal A-case The company Terminal A ApS consists of a group of independent investors, who introduced an idea about an independent low-cost passenger terminal in Copenhagen Airport. The investors intended to rent a piece of land in the airport’s cargo area for the purpose In the summer of 2008, Copenhagen Airport declined renting out the piece of land, because the Danish aviation legislation does not allow for independent terminals, and moreover because it would cause massive practical, safety and security-related problems The Competition Council has now closed the case. The regulatory authority concludes that the aviation legislation does not allow for an independent rival terminal An independent terminal would not benefit  Denmark. An analysis carried out by Copenhagen Economics shows that terminal competition can cost the Danish society up to DKK 500 million annually and in the region of 5,500 airport-related jobs in a number of years An independent terminal would cause serious practical, safety and security-related problems – not least in the shape of a shared responsibility for safety and security at the airport. Should independent terminals become legal, it would among other things mean that: The responsibility for safety and security in the airport would be divided between several different operators, which increases the risk of errors and breakdowns in communication in day-to-day operations, and it would cause uncertainty about who has the overall responsibility and thereby needs to live up to the requirements of the regulatory authorities Copenhagen Airports has a concession and therefore an obligation to supply the necessary capacity for routes in and out of Denmark. An unclear division of responsibility between two companies would create uncertainty about the operation and development of a vital part of Denmark’s infrastructure. The charges paid by the airlines for the use of the airport could not be agreed on and approved by the Danish Transport Authority, as it happens today. The negotiation that currently precedes the determination of Copenhagen Airport’s charges ensures that the charges takes both low-cost routes, network routes and the airport's long-term options to invest into consideration and is therefore important to the airport’s ability to retain and attract routes