Establishment of new fees
A consultation process was formally started with airport users in August 2016 to establish the new regulatory fees for 2017. During the consultation traffic trends, investments and service quality and environmental protection parameters as well as all of the other elements that contribute to the establishment of new values were presented to the users. No appeals were submitted to ENAC at the end of the consultations related to these fees.
ENAC published the new tariff fees during October 2016. They become effective January 1, 2017 and have an average increase of 0.8% compared to the fees in effect in 2016, basically in line with the programmed inflation rate (equal to 0.9% as reported in the 2016 Update Note to the Economy and Finance Document, published by the Ministry of the Economy and Finance in September 2016).
Revision of regulation models of airport charges - Call for Input
During the month of September, the Transport Regulatory Authority (ART) stated a revision procedure for the regulation models of airport charges approved with resolution no. 64/2014, considering it opportune to make some changes to the models, in order to improve their operating effectiveness based on the experience obtained during the first two years of application.
The first phase of this revision was the approval of a “call for input”, used to ask for the contribution of various stakeholders on specific issues deemed relevant by the ART in order to acquire elements to use as a guide for revision of the models. This phase was completed with the publication in December of the remarks received by the Authority in relation to the “call for input”.
The contents of the remarks, based on the heterogeneous nature of the issues proposed in the “call for input” regarded various aspects: the structure of the regulation model (dual till or single till system), issues related to the remuneration rate (regulatory WACC), model technical elements Issues of elasticity of traffic development costs, cost efficiency measures, etc.), issues related to consultation procedures (transparency of the data supplied by the Operators, consultation process time frames and procedures, procedures for involving the airlines in the Master Plan and Investment Plan definition phases).
The Transport Regulatory Authority set a deadline for completion of the procedure for May 31, 2017.
Relevant new national and Community legislation
The new "Guidelines for the incentivised introduction and development of air routes by airlines" were published on August 13, 2016. Publication of the new guidelines of the Ministry for Infrastructure and Transport (MIT) became necessary to overcome the interpretative problems related to them, that occurred at the time of application, as well as in consideration of the needs to incentivise air traffic in regional airports to improvement the economic development of the involved areas.
Specifically, the New Guidelines govern:
- incentivising for introduction and development of air routes by airlines;
- regulations only applicable to incentives for introduction and development of a public origin that constitutes State aid;
- the lack of mandatory requirements for airport operators to communication incentive contracts to the authorities that are beyond the application of the Second Guidelines;
- lack of ART ownership in establishing additional operating instructions compared to those contained in the Second Guidelines, regarding incentivising.
The following provision was published on August 20, 2016: “Conversion into law, with amendments, of Italian Law Decree no. 113 of 06/24/2016, containing urgent financial measures for territorial entities and the territory", in effect as of 08/21/2016, which entails the suspension of an increase in the municipal surtax on airport landing fees from September 1, 2016 to December 31, 2016. Moreover, an increase of the surtax totalling Euro 0.32 is included for 2019 through the solidarity fund for the air transport and airport system sector. Subsequently the same topic was dealt with again in the 2017 Budget Law which calls for the permanent suspension, from January 1, 2017 of part of the municipal surtax (i.e. Euro 2.41 for 2017 and Euro 2.34 for 2018), introduced by Law Decree no 145/2013, also indicating that the Ministry of labour and social policies will take care of restoring the lower income for INPS.
On November 25, 2016 MIT adopted the Guidelines for designation of the airport networks, which will follow the designation act to issue pursuant to article 74 of the Italian Law Decree no. 1 of January 24, 2012, converted, with amendments, from Italian law no. 27 of March 24, 2012, subject to specific application to submit to MIT by the interested airports. The Guidelines call for compliance with the following requirements to be able to obtain the "airport network" designation:
(i) airports of the same network must have the same manager; this condition exists even in the case where a single manager exercises a control qualified as per article 2359 of the Italian Civil Code on the other network managers;
(ii) in the case of a corporate group, in order to ensure the transparency of economic transfers between companies of the same group, preparation of consolidated financial statements for the group companies is mandatory. The manager ensures transparency in the use of public funds and trade practices adopted within the network.
The Guidelines also require that MIT:
(i) includes the planning of necessary connections in the Infrastructures Annex of the Economy and Finance document (DEF), specifically railway ones, with the airports in the network, providing proof of the improvement in intermodal transport;
(ii) uses the effects of the establishment of airports in networks, for the purposes of assessing the achievement of economic-financial equilibrium and adequate capital ratios of each airport.
The Decree of November 18, 2016 of the Ministry for Infrastructure and Transport concerning the breakdown of air traffic in the Milan airport system (so-called Del Rio decree) was published in the Official Gazette of the Italian Republic no. 279 of 11/29/2016. It repeals and replaces the previous decree of October 1, 2014 (so-called Lupi Decree). The law, effective as of the publication date, closely follows what was contained in the previous decree: EU airlines may introduce “point to point” flights employing narrow body aircraft between Linate and all European cities within the hourly capacity limits of Linate airport (unchanged at 18 movements/hour).
Directive 2016/1148 was published on July 19, 2016 concerning measures for a high common level of security of network and information systems across the Union (so-called Cybersecurity Directive) to be adopted by May 9, 2018.
As of May 24, 2016 the General Data Protection Regulation has been in effect (EU) 679/2016 (so-called Europrivacy), which replaces most of the Privacy Law. Companies have until May 25, 2018 to adopt it. In this context SEA is working to identify the main legal requirements under the new regulation and proceed with the consequent updating of company procedures. For this purpose, a specific activity plan has been established. The first phase, entailing updating of the mapping of personal data processing performed within the various company departments, was completed at the end of 2016. The next phases will be performed during 2017 until the procedures are actually updated and the privacy requirements pursuant to the new Regulation have been met.
Activities and initiatives in the international, Community and national arena regarding the Airport sector, the business of the SEA Group and its subsidiaries whose main regulatory developments are followed by SEA
The main regulatory developments in the international arena are related to:
- negotiating mandate to the European Commission for air transport agreements between the European Union and Turkey, Qatar, United Arab Emirates, ASEAN;
- revision of the Schengen treaty i.e. the Regulation Proposal amending the EC regulation no. 562/2006 concerning reinforcement of verifications in databases pertaining to foreign borders. The proposal intends to change the obligations of Member States concerning document controls at the external borders of the European Union, including through the use of databases and implementation of new technological systems. Inter-institutional negotiations finished on December 7, 2016, the European Parliament is scheduled to vote in plenary session with the result to be published in the Official Journal of the European Union;
- general revision of the European aviation safety system: a proposal for revision is under way of the Regulation regarding the common rules of the Civil Aviation sector that establishes a European Aviation Safety Agency (EASA) and repeals the regulation (EC) no. 216/2008. On December 1, 2016 the Member States of the Union reached a joint proposal for modification and postponed negotiation with the European Parliament to 2017;
- European Parliament proposal for a Directive on the harmonisation of legislative, regulatory and administrative provisions of the Member States concerning product and service accessibility requirements: the proposal is aimed at the removal of barriers that hinder free circulation and accessibility to products and services in Europe for disabled individuals or with physical dysfunctions through harmonisation of the criteria governing the accessibility to products and services such as computers and operating systems, digital TVs, telephone services, self-service terminals (including ticketing and check-in machines) and passenger transport services.
To implement EU Regulation 139/2014, in the final months of 2016 SEA completed all of the company activities aimed at obtaining the conversion of the airport certificates for Malpensa and Linate, pursuant to the new safety requirements introduced at European level by the new Regulation. These activities include the following: revision and update of the Airport Manuals and related to the company procedure system, with inclusion of the new necessary procedures; company organisational system with the new appointments for: Compliance Manager and Training Manager; inclusion of a new contractual clause on safety compliance in relations with the manager of third party contracting parties - contractors and not operating in the air side areas. For agreements with third parties and also aimed at conversion of the certificates, specific agreements have been signed with ENAV, as the institutional supplier of air navigation services at Linate and Malpensa, similar agreements are in the process of being finalised with the Provincial Headquarters of the respectively competent Fire Brigades, i.e. the Varese and Milan offices, to regulate their areas of competence in the airports. In this context new certificates were issued by ENAC pursuant to 139 respectively for Malpensa airport on December 29, 2016 and for Linate airport on January 26, 2017. All of the relative secondary technical regulations issued by ENAC, governing the conversion procedure, were examined and distributed in the company again in relation to the same subject, with specific focus on the reference Post Holders.