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Big carriers cry foul over Geneva’s low-cost plan

Low-cost carriers may soon get an easier ride at Geneva airport Keystone

Lufthansa, KLM and Air France are spearheading opposition to a proposal by Geneva airport to lower taxes for passengers flying with low-cost carriers.

The airport authorities are due to take a decision on whether to go ahead with the proposal by July 2.

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

Low-cost travellers would have taxes reduced to SFr14 ($11) while others would see the rate upped by SFr3 to at least SFr19.

The move is designed to cement Geneva’s position as a hub for budget airlines, 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.

If the proposal goes ahead, the older of the airport’s two terminals will be refitted to service only low-cost carriers like easyJet.

Basic infrastructure

“A relatively small investment of about SFr10 million will be required for the renovation since the terminal will only need the most basic of infrastructure,” Philippe Roy, spokesman of Geneva International Airport, told swissinfo.

“So based on these conditions, we can offer low-cost carriers lower fees,” Roy said of what would be an unprecedented move in Europe.

He admitted easyJet had put the airport authorities under pressure to offer better conditions, but said the savings were only possible if the airport could reduce services by setting aside a separate terminal.

“Our response to easyJet has always been the same,” he said. “If it uses the same infrastructure as the other airlines, it has to pay the same fees.”

Roy said the rate increase for passengers flying with traditional airlines would help cover the cost of upgrading Geneva’s main terminal, which is to be outfitted with new passenger lounges.

Unfair advantage

The new rates, which the Geneva authorities say will be competitive with those of other European airports, are due to come into effect on September 1.

Despite the claim, airlines such as Air France, KLM and Lufthansa have cried foul.

The three traditional carriers, which account for about 20 per cent of all passenger traffic at Geneva, said that the two-tier fee system grants low-cost carriers an unfair competitive edge.

“It’s very apparent that this is a solution designed to suit easyJet,” Werner Kellerhals of Lufthansa told the “Tribune de Genève”.

The airport authorities maintain that as part of the proposal they will grant traditional carriers a rebate based on the annual amount of passenger taxes collected.

They say the rebates “could be as high as 40 per cent”.

But the traditional carriers are demanding rebates based on traffic growth alone.

swissinfo with agencies

The Geneva airport authorities will decide by July 2 whether to refit the older of its two terminals exclusively for low-cost airlines.

If they go ahead, they will reduce passenger taxes for people flying with these carriers.

Traditional airlines have rejected the proposal, saying it grants low-cost airlines an unfair advantage.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR