Swiss International Airlines - Discrmination at GVA?

Full fare airlines at GVA will be charged higher landing fees than Easyjet and low fare airlines; causing a ruckus.
Easyjet flies into a Swiss storm

By James Arnold
BBC News Online business reporter

Is Easyjet having an easy ride in Geneva?
There's turbulence in the skies over Geneva, where three major airlines are furious at the airport's policy of favouring their low-cost rivals.
In April, Geneva International Airport (GIA) proposed lower fees for airlines that use only basic terminal services.

At the same time, fees for mainstream carriers are to be raised.

Airlines have until the end of this month to respond, and KLM, Air France and Lufthansa have already spelled out their implacable opposition.

GIA, they say, is freezing them out in order to curry favour with budget airlines - principally Easyjet, which sees Geneva as a major European destination.

Going for growth

The airport has pinned its hopes on attracting fast-growing carriers.


Budget airlines... only need a very basic service from us, and should be charged accordingly

Philippe Roy, Geneva International Airport
Budget airlines currently account for one-quarter of its traffic, a figure that GIA expects to approach 35% over the next 10 years.

The airport's April strategy aimed at segmenting its service. "We realised that there are two kinds of airlines," says Philippe Roy, spokesman for GIA.

"Those with a complex international network, and those just go from point A to point B. The second group - budget airlines - only need a very basic service from us, and should be charged accordingly."

Terminal velocity

The proposal is to refit an old airport building into a basic terminal, suitable only for loading and unloading passengers.

The existing terminal, meanwhile, will be made more luxurious.

So GIA expects traditional airlines to pay more; under the proposal, passenger taxes are to rise from 19 Swiss francs (£8; $15) to 22.

The cheaper terminal, meanwhile, will be charged at a lower 14-franc rate.

Easy terms for Easyjet?

The airline argues that a fuller service demands a higher cost, but mainstream airlines feel cheated.


This is a solution designed to suit Easyjet

Werner Kellerhals, Lufthansa
"This is inappropriate at a time when we are doing as much as we can to keep fares down in a difficult economic climate," says Frank De Reij of KLM.

The airlines feel that their higher fees are being used effectively to subsidise Easyjet, and to pay for a second terminal that they will not benefit from.

There are suspicions that the new tariffs came under pressure from Easyjet, which is known for hammering out tough terms with airports.

"It's very apparent that this is a solution designed to suit Easyjet," Werner Kellerhals of Lufthansa told the Tribune de Geneve newspaper.

Coming to terms

The plan is due to be discussed at the airport's board meeting on 2 July, and Mr Roy insists that nothing has yet been decided.

The case is the latest example of the difficulties airports face in dealing with the changing airline industry.

Charging lavish fees for the various handling and maintenance services they have traditionally provided to international airlines is no longer so easy.

Budget airlines, which account for a fast-growing share of European traffic, are not interested in most of the services airports have to offer.

But they can provide a promising stream of passengers, arguably the only source of genuine revenue growth in the troubled aviation industry.

Their relations with airports have been fraught with political difficulties.

In the best-known case, the European Commission found that Charleroi airport near Brussels had effectively subsidised Ryanair, by offering the carrier favourable terms.

But airlines do it all the time...you ask people on an aircraft haow much they paid for their ticket and you would get as many answers as there are passengers...well almost. Airlines say that if you book ahead of time and stay a saturday night etc. etc. etc. you cost us less (simplified, I know), so we will charge less. I guess Geneva airport are doing the same thing. Who ever said that everyone should pay the same for the same product?

So, discrimination? Strictly speaking perhaps, but that's why it's called discriminatory pricing... But is it as serious as your header suggests (I had visions of all non-caucasian passengers being carted off to some torture room to be faced with the Godzilla of Geneva security officers)? Nope, not really, pretty much the same as what goes on all over....

According to this news item, passengers at GVA are indeed in for higher, or, if flying easyJet, lower, taxes and airport charges soon.


July 3, 2004, 12:15
Low-cost plan takes off at Geneva airport

The authorities at Geneva airport have decided to go ahead with a controversial plan to offer lower taxes to passengers flying with budget airlines.
The proposal had come under fire from traditional airlines who maintained that it gave low-cost carriers, such as easyJet, an unfair advantage.



At the heart of the controversy were plans to reduce passenger taxes for low-cost carriers, and to raise them for people flying with traditional carriers.

The proposal also involved refitting the older of the airport’s two terminals to service only low-cost airlines.

The plan was unpopular with the larger airlines. Last month Lufthansa, KLM and Air France - which account for about 20 per cent of all passenger traffic at Geneva - called for the taxes to remain at the same level and for the project for terminal two to be scrapped.

But on Wednesday, easyJet replied by threatening to pull out of the airport, if the low-cost terminal was not created.

Green light

However, the authorities said on Friday while they had given the green light to the plan, they would not be raising taxes for traditional airline passengers.

“The airport authorities listen to all the airlines,” said airport director, Jean-Pierre Jobin.

Jobin said that concerns of the traditional airline companies had been heard, but that the solution would also allow low cost carriers to grow and develop their business at Geneva airport.

Lorella Bertani, vice president of the airport’s board, said that the decisions made on Friday had been in no way influenced by those involved but were “in the interest of all.”

Jobin added that a rise in the number of passengers - estimated at three per cent for the year, but already at 6.8 per cent in the first semester - had meant that an increase in airport taxes could be avoided.

Budget airline hub

The move towards lower airport taxes for budget airlines is designed to cement Geneva’s position as a hub for low cost carriers, which are continuing to capture a larger share of the market.

They now account for 25 per cent of all traffic at Geneva, and the airport expects the figure to jump to 30-35 per cent over the next ten years.

The airport authorities said they had received offers from two airlines, easyJet and Virgin Express, for the new low cost terminal.

Jobin said if the two companies confirmed their commitment for five years, the move would go ahead as planned.

The new terminal is due to open its doors on November 1 2005 at a cost of SFr20 million ($16.2 million). It is expected deal with up to four million passengers a year.

Welcomed

The International Air Transport Association (IATA) said in a statement on Friday that it welcomed the news as a “step in the right direction.”

It particularly commended the decision not to raise airport taxes. Original plans had put the rise at SFr3 to at least SFr19 in total.

But the IATA said it would continue to monitor closely the airport’s plans to redevelop Terminal 2 as a low-cost terminal.

“We have made it crystal clear that IATA will not accept any situation that sees the cross-subsidisation of a redeveloped Terminal 2 with revenues from Terminal 1,” said IATA’s director general, Giovanni Bisignani.

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“We have made it crystal clear that IATA will not accept any situation that sees the cross-subsidisation of a redeveloped Terminal 2 with revenues from Terminal 1,” said IATA’s director general, Giovanni Bisignani.


In principle I agree, but if Terminal 2 is cheaper to run because it only has basic amenities for LCCs rather than for full service carriers then I see no reason why it shouldn't be cheaper.

Cross-subsidisation of Terminal 1 with revenues from a redeveloped Terminal 2 would be equally unacceptable (well maybe not to Mr. Bisignani as most LCCs are NOT members of IATA....)

According to a report in 10vor10 on Swiss TV, the new T2 will feature self check-in desks and will have passengers tag their bags themselves. They'll then have to carry them onto a cart. They will also have to walk to their plane (no jetway, no busses) in every weather.

EZ have been increasing services from GVA and are continuing to expand service to the UK in the Autumn. In contrast, LX/SR have withdrawn most of their former international services, concentrating on ZRH.

I haven't got the figures handy, but I suspect GVA is earning far more from EZ than from LX. It stands to reason that they should look after their bigger customers.

If EZ use more basic facilities than the expensive airlines, it stands to reason that they should pay less. Look at FR - they effectively have their own terminal st STN, complete with expensive airbridges that FR don't use. Passengers take the steps to ground level then use the aircraft steps to enter the plane. Unforunate if you have a bad back but cheaper for the operator.

Carry on, GVA :) ! Now if only 'Unique' could adopt the same philosophy at ZRH ...