Air France-KLM into Battle over Asia Airport Fees

AMSTERDAM KOMPAS.com - Air France-KLM is taking the lead in long-haul airlines' fight back against soaring airport charges in Asia as airports expand to meet fast-growing domestic and international traffic.

Air France-KLM will hand over a survey to the International Air Transport Association next month in which it details the problem, senior vice president Asia-Pacific Marnix Fruitema said in a recent interview with Dow Jones Newswires.

“We have done research into the exorbitant increases in airport charges at many Asian airports,“ Fruitema said. He declined to detail the conclusions of the research.

Air France-KLM, which has just announced a widespread restructuring plan to offset the squeeze on its profit margins from high fuel prices and sluggish European growth, pays more than EUR100 million a year on airport-handling and related charges in the region, Fruitema said.

The airline, the largest Asia-Europe carrier by number of passengers and revenue, has got the backing of Delta Air Lines (DAL), AMR Corp.'s (AMR) American Airlines, Deutsche Lufthansa and Malaysia's AirAsia Bhd. in its campaign against opaque pricing and the lack of consultation common in Europe, Fruitema added.

IATA said it is looking into the issue. “It is a concern when airports increase charges without justification and consultations with the users of the airports,“ Singapore-based association official Albert Tjoen said.

“In the past, we have achieved successful (consultations) in Indonesia, Japan, South Korea and Thailand, but many more campaigns are ongoing. These include Delhi, Manila and Singapore,“ Tjoen said. But a spokeswoman for the international airports organization Airports Council International said it is too simple to think the same rules should apply for all airports in the region.

“Airport operators do their operations and charging based on local economic situations, with local governing models, local financing opportunities, local infrastructure development and local government rules“, said spokeswoman Cheryl Marcell. “There is no general ruling possible on charges and increasing or decreasing them“, she said.

Asian airports are investing heavily to cope with traffic growth. Passenger traffic in the Asia-Pacific region could soar to more than 4 billion passengers by 2029 from 1.2 billion passengers in 2009, according to the latest forecast from ACI. Still, the controversy over charges has come to a head in India where Delhi's Indira Gandhi International Airport plans a four-fold increase from April 1 2013. As a result, American Airlines and AirAsia have decided to stop flying to the airport.

Delhi would become the most expensive airport in Asia with EUR17,000 in charges for landing a Boeing 747-400, according to Air France-KLM. At Amsterdam's Schiphol Airport the comparable charge is EUR9,000, the airline said. Airport operator DIAL, a joint venture whose partners include GMR Group and Fraport, wasn't available for comment. DIAL has a first-stage plan to increase capacity to 60 million passengers. Delhi airport handled 29 million passengers in 2010.