audit des aéroports d'europe. le rapport de la cour des comptes

8/10/2019 Audit des aroports d'Europe. Le rapport de la Cour des comptes

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Special Report EU-funded airportinfrastructures: poorvalue for money

EN 2014 NO

EUROPEANCOURTOF AUDITORS


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EUROPEAN COURT OF AUDITORS12, rue Alcide De Gasperi1615 LuxembourgLUXEMBOURG

Tel. +352 4398-1

E-mail: [email protected] Internet: http://eca.europa.eu

Twitter: @EUAuditorsECAYouTube: EUAuditorsECA

More information on the European Union is available on the Internet ( http://europa.eu ).

Luxembourg: Publications Office of the European Union, 2014

ISBN 978-92-872-1276-4doi: 10.2865/10461

European Union, 2014Reproduction is authorised provided the source is acknowledged.

Printed in Luxembourg
mailto:[email protected]://eca.europa.eu/http://europa.eu/http://europa.eu/http://eca.europa.eu/mailto:[email protected]


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EU-funded airportinfrastructures: poorvalue for money

(pursuant to Article 287(4), second subparagraph, TFEU)

Special Report

EN 2014 NO


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02Contents

Paragraph

Glossary

I V Executive summary

1 15 Introduction

1 5 Main characteristics of air transport in Europe

6 8 EU air transport policy and funding of airport infrastructures

9 11 The management of investments in airport infrastructures under the ERDF and CF

12 15 Types of airport infrastructures examined

16 21 Audit scope and approach

22 67 Observations

22 26 Need for new or upgraded infrastructures demonstrated for half of the airports examined

27 Delays in constructions for most and cost overruns for half of the airports examined

28 35 More than half of the constructions were underused

36 38 EU funding for investments which are not cost-effective

39 45 Seven of the 20 audited airports are not financially self-sustainable

46 48 Forecast of passenger number significantly overoptimistic for 12 of the 20 airports examined

49 52 Limited impact of EU-funded investments on passenger numbers, customer service and jobcreation

53 59 Similar investments in airports in close proximity to each other

60 65 Planning of investments in airport infrastructures generally not coordinated at national level

66 67 Limited information available to the Commission on EU-funding of airports


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04Glossary

Airport infrastructure investments : Investments on the landside and airside of airports. Landside infrastructureinvestments include the construction of new terminal buildings, extensions of existing terminals and connections tothe road and rail network. Airside infrastructure investments include the construction of runway, taxi-way, exit-wayand apron space, air traffic control infrastructure and equipment and safety equipment.

Air traffic Movement (ATM) : A landing or take-off at an airport of an aeroplane engaged in air transport. Airsidecapacity is usually measured in terms of ATMs per hour - indicating the number of aeroplanes able to land, park ortake-off within one hour.

Catchment area : The area of influence of an airport to attract visitors and customers, depending on the populationnearby and the surface transport possibilities.

Cohesion policy funds : Funds to promote the policy which aims at strengthening economic and social cohesionwithin the European Union, reducing the gap in the level of development between the regions of the EU. This auditconcerned in particular: (i) The European Regional Development Fund (ERDF): aimed at investing in infrastructure,creating or preserving jobs, sustaining local development initiatives and activities of small and medium sizedenterprises, and (ii) The Cohesion Fund (CF): aimed at strengthening economic and social cohesion by financingenvironment and transport projects in Member States with a per capita GNI of less than 90 % of the EU average.

Directorate General (DG) : A department of the European Commission (EC). In this audit, the relevant DGs werethe DG for Regional and Urban Policy and the DG for Mobility and Transport.

Managing authority : The body at national, regional or local level designated by the Member State that proposesthe operational programme for adoption to the Commission and that is responsible for its subsequent managementand implementation.

Major project (MP) and cohesion fund project (CFP) : A project which comprises of an economically indivisibleseries of works fulfilling a precise technical function having clearly identified aims and whose total cost taken intoaccount in determining the contribution of the funds exceeds 50 million euro. The approval of the Commission isrequired for both major projects and CF projects at individual project level.

Operational programme (OP) : The document prepared at central or regional level in a Member State andapproved by the Commission which takes the form of a consistent set of priorities comprising multi-annualmeasures.


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05Executivesummary

IThrough this audit, the Court analysed EU-fundedinvestments in airport infrastructures and examinedwhether:

there was a demonstrated need for theseinvestments;

constructions were completed on time and onbudget;

the newly built (or upgraded) infrastructures werefully used.

In addition, the Court assessed whether these invest-ments resulted in higher passenger numbers and in animproved customer service. Finally, the Court ana-lysed whether the EU-funded airports were f inanciallysustainable.

IIThe audit focused on 20 EU-funded airports in fiveMember States (Estonia, Greece, Spain, Italy andPoland). These airports received a total EU-funding of666 million euro during the 2000-2006 and 2007-2013programme periods through the European RegionalDevelopment Fund (ERDF) and the Cohesion fund (CF).

IIIThe overall conclusion is that the EU-funded invest-ments in airports produced poor value for money: toomany airports (which were often in close proximityto each other) were funded and in many cases theEU-funded infrastructures were oversized. Only halfof the audited airports succeeded in increasing theirpassenger numbers and improvements in customerservice were either not measured or not evidenced.

IVThe Court also observes that the EU-funding was notcost-effective and that seven of the 20 airports exam-ined are not profitable and, as a result, there is the riskthat they may need to be closed unless they receivecontinuous public financial support. This is particularlythe case with small regional airports having fewerthan 100 000 passengers per year. The Court alsonoted that the EU-funding is not well co-ordinated bythe Member States and, in particular as regards MajorProjects and Cohesion fund Projects, is insufficientlysupervised by the Commission, leading to overcapac-ity and poor value for money.

VThe Court recommends that:

(i) the Commission should ensure during the 2014-2020 programme period that Member States onlyallocate EU funding to airport infrastructures inthose airports which are financially viable and forwhich investment needs have been properly as-sessed and demonstrated. This should also be partof the approval and monitoring of OperationalProgrammes carried out by the Commission;

(ii) the Member States should have coherent regional,national and supranational plans for airport devel-opment to avoid overcapacity, duplication and un-coordinated investments in airport infrastructures.


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06Introduction

Main characteristics of airtransport in Europe

01Air transport is the dominant form ofpassenger transportation over longdistances but it also serves the needsof many middle-distance travellers.According to Eurocontrol, air trafficin Europe will nearly double by 2030and Europe will not be in a position tomeet a large part of this demand dueto a shortage of runway and groundinfrastructure, mainly at major hubairports.

02There are over 500 commercial airportsin Europe today, divided into

(i) hub airports, providing a full rangeof services (business/ leisure,domestic/ intra-Europe/ Intercon-tinental) and bringing togethertraffic from smaller airports, and

(ii) regional airports connectingremote regions to the centres ofeconomic activity, feeding hub air-ports but also having direct flightsto other regional airports.

03The main hub airports in Europe withat least 5 million passengers per year1 capture 78 % of the total Europeanair traffic; airports with passengersbetween 1 and 5 million per year have18 % of the overall numbers whereassmaller airports with less than 1 millionpassengers per year, are only used by4 % of passengers.

04Air transport is an important economicarea: European airports directly and in-directly employ over a million peopleworking for airlines as well as on main-tenance, catering services, retailingand air traffic control. As such, airlinesand airports contribute more than140 billion euro to the European GDP2.

05However, profitability is often prob-lematic: despite the fact that, between2001 and 2010, traffic at regionalairports in Europe increased by nearly60 %, nearly half (48 %) of Europesairports were loss-making in 2010. Thisis in particular the case for smaller,regional airports which the publicauthorities may wish to maintain forsocio-economic reasons.

EU air transport policyand funding of airportinfrastructures

06Since the early 1990s, EU air transportpolicy3 has aimed at overcoming ca-pacity problems by building additionalinfrastructure, but also by makingbetter use of existing facilities. Suchoptimisation could be achieved viaa more efficient use of slots4, betterground handling services and betterintegration with the railway network.

1 For classication rules seeCommunity Guidelines onnancing of airports andstart-up aid to airlinesdeparting to regional airports,Section 1.2.1(12) (OJ C 312,9.12.2005, p. 1).

2 http://ec.europa.eu/transport/modes/air/internal_market/

3 Council Regulation (EEC)No 95/93 of 18 January 1993on common rules for theallocation of slots atCommunity airports (OJ L 14,22.1.1993, p. 1); COM(2001) 370White Paper - Europeantransport policy for 2010: timeto decide; COM(2006) 314 of22 June 2006 Keep Europemoving - Sustainable mobilityfor our continent; COM(2006)819 of 24 January 2007 Anaction plan for airportcapacity, efficiency and safetyin Europe; COM(2011) 144 of28 March 2011 White Paper- Roadmap to a SingleEuropean TransportArea Towards a competitiveand resource efficient

transport system.4 A permission given to use the

full range of airportinfrastructure necessary tooperate an air service at anairport on a specic date andtime for the purpose oflanding or take-off.
http://ec.europa.eu/transport/modes/air/internal_market/http://ec.europa.eu/transport/modes/air/internal_market/http://ec.europa.eu/transport/modes/air/internal_market/http://ec.europa.eu/transport/modes/air/internal_market/


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07Introduction

07Transport infrastructure projects,including airport-related actions, arean important area of spending fromthe EU budget. The EU allocated some4,5 billion euro5 over the 2000-2013programme periods to airport infra-structures via the European RegionalDevelopment Fund (ERDF), CohesionFund (CF) and TEN-T6. Some 1,2 bil-lion euro (or 27 % of this) was allocatedto airport-related investments intechnologies and in multi-modal con-nections (e.g. air traffic managementinfrastructure and airport-city centrelinks), seeFigure 1.

Overview of funding sources for airport infrastructure investments in2000 to 2013

F i g

u r e

1

Air traffic management andmultimodal airport support:1,2 bn or 27 %

TEN-T funds forinfrastructures:0,5 bn or 11 %

Cohesion policy fundsfor infrastructures:

2,8 bn or 62 %

Source: European Court of Auditors.

5 In addition, EIB loans of14 billion euro were providedto support airportinfrastructures as of 2000 innon-Cohesion policy regions,and some 2,3 billion euro wereprovided as loans to supporteet renewal for European aircarriers.(http://www.eib.org/projects/loans/sectors/transports.htm )

6 The trans-European networkfor transport (TEN-T) fundingis limited to mainly studiesand some smallerinfrastructure works inairports in non-cohesionpolicy areas.
http://www.eib.org/projects/loans/sectors/transports.htmhttp://www.eib.org/projects/loans/sectors/transports.htmhttp://www.eib.org/projects/loans/sectors/transports.htmhttp://www.eib.org/projects/loans/sectors/transports.htmhttp://www.eib.org/projects/loans/sectors/transports.htm


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08Introduction

08More than 2,8 billion euro of the3,3 billion euro infrastructure support(85 %) for the 2000-2013 period camefrom Cohesion policy funds (i.e. ERDFand CF), and 75 % of this was investedin four Member States (Greece, Spain,Italy and Poland).Figure 2 provides anoverview of the allocations and An-nex I has the detail per Member State.

Overview of Cohesion policy funds allocations for airport infrastruc-ture investments per Member State in 2000 to 2013

F i g u r e

2

Source: European Court of Auditors.

Italy, 17 %

Greece, 13 %

Rest of EU-28, 25 %

Poland, 21 %

Spain, 24 %


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09Introduction

The management ofinvestments in airportinfrastructures under theERDF and CF

09The responsibility for EU spending un-der the ERDF and CF is shared betweenthe Commission and the MemberStates7. The Commission establishesguidelines for the planning of opera-tional programmes (OPs), negotiates,approves and monitors the imple-mentation of the OPs proposed by themanaging authorities in the MemberStates.

10The Commission bears overall respon-sibility for the proper use of funds,as it is responsible for supervisingthe set-up and operation of controlsystems in the Member States, and forreimbursing approved expenditure.The managing authority is responsiblefor the OP management and imple-mentation, while Commission approvalis required for both major projects andCF projects8.

11Implementing bodies, acting onbehalf of the managing authorities,are usually in charge of managing theairport infrastructure project itself. Forthe projects examined, the entitiesconcerned were AENA (Spain), ENACand ENAV (Italy) and Tallinn airport(Estonia). In Poland, the Centre for EUtransport projects carries out functionsthe managing authority has delegatedto it and projects are managed bythe beneficiaries, whereas in Greecethe HCAA, a public service owningand managing all airports, exceptthe Athens airport, is responsible forprioritisation and selection of airportinfrastructure investment projects.

Types of airportinfrastructures examined

12Airport infrastructures can be eitherlandside or airside. Landside infra-structure investments include theconstruction of new terminal build-ings, extensions of existing terminalsand connections to the road and railnetwork. Airside infrastructure in-vestments include runway, taxi-way,exit-way and apron space construc-tions, air traffic control infrastructureand equipment and safety equipment.

13Most investments in the sample ofprojects examined were for airsideinfrastructures: this covered invest-ment in runways, aprons, taxi-waysas well as safety improvements in18 of the 20 airports. Landside infra-structure investments were mainlythe construction of new terminals orextensions to existing terminals. Theremainder of the audited funds werespent on miscellaneous infrastructuressuch as car parks, cargo terminals andautomated people movers. Table 1 provides a general overview of the EUco-financing per type of infrastructure.

7 http://ec.europa.eu/regional_policy/how/index_en.cfm

8 The Commission approval forall cohesion fund projectsapplies only to the 2000-2006programme period; in the2007-2013 period, suchapproval was only needed forprojects costing more than50 million euro.
http://ec.europa.eu/regional_policy/how/index_en.cfmhttp://ec.europa.eu/regional_policy/how/index_en.cfmhttp://ec.europa.eu/regional_policy/how/index_en.cfmhttp://ec.europa.eu/regional_policy/how/index_en.cfmhttp://ec.europa.eu/regional_policy/how/index_en.cfmhttp://ec.europa.eu/regional_policy/how/index_en.cfm


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10Introduction

T a

b l e 1 Type of EU-funded airport infrastructures examined

Audited airport infrastructure types EU funds audited(in euro) %

Terminals (14 airports) 164 227 220 35,66

Runways (13 airports) 80 590 629 17,50

Aprons (14 airports) 50 988 499 11,07

Taxi-ways (10 airports) 39 594 288 8,60

Safety improvements (12 airports) 34 681 200 7,53

Other (12 airports, e.g. car parks, cargo terminals,automated people movers) 90 419 523 19,64

TOTAL 460 501 539 100,0

9 A bottleneck is a limitation inthe operational capacity of theoverall airport caused bya single component (e.g.runway, apron, terminal)which is determining theoverall airport capacity andpreventing the othercomponents to be used totheir full capacity.

14The objectives of most projectsexamined were to tackle existing orupcoming infrastructure bottlenecks9,to increase the level of services topassengers, to adapt to new safety re-quirements or to improve connectionsto and from the airports.

15Box 1 provides two examples of thetype of airport infrastructures exam-ined during the audit.


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11Introduction

Examples of EU-funded airport infrastructures B o x

1

S o u r c e :

E u r o p e a n

C o u r t o

f A u

d i t o r s

.

Picture 1 - View of the new terminal and apron space at Tallinn airport.

S o u r c e :

E u r o p e a n

C o u r t o

f A u

d i t o r s

.

Picture 2 - Part of the extended apron space at Naples airport.

(a) In Tallinn airport in Estonia some53 million euro of EU-funding wasinvested in an extension to theterminal, an extension of the runway,a reconstruction of the biggest partof the apron as well as environmental,safety and security infrastructure.

(b) The investments audited at Naples airportin Italy dealt with the extension of theterminal, runway, apron and air trafficmanagement equipment. The cost of theinvestments was 52,4 million euro, out ofwhich 20,6 million euro was from the EU.


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12Audit scopeand approach

16Through this audit, the Court analysedEU-funded investments in airport in-frastructures and examined whether:

there was a demonstrated need forthese investments;

constructions were completed ontime and on budget;

the newly built (or upgraded) infra-structures were fully used.

In addition, the Court assessedwhether these investments resulted inhigher passenger numbers and in animproved customer service. Finally, theCourt analysed whether the EU-fundedairports were financially sustainable.

17The audit focused on 20 EU-fundedairports in five Member States (Estonia,Greece, Spain, Italy and Poland). Theseairports received a total EU-fundingof 666 million euro during the 2000-2006 and 2007-2013 programme peri-ods through the ERDF and the CF, outof which 460 million euro was audited.

18Eight airports were selected for auditin Spain, five in Italy, three in Greece,two in Poland and two in Estonia. Thesample selection methodology wasthat

(i) all airports which had major projects and cohesion fund projectswere selected10;

(ii) five airports were selectedrandomly;

(iii) five airports were selected on thebasis of risk assessment. The re-maining11 four airports were select-ed because these were the airportswith the largest amounts spent oninfrastructure projects other thanmajor projects and cohesion fundprojects. Annex II provides a listof the audited airports with theamounts audited, implementationperiods and types of infrastructureaudited per airport.

19The audit comprised a desk review ofrelevant legislation, air transport plan-ning documents of the five MemberStates and publications of the main in-dustry associations (including AirportsCouncil International, Air TransportResearch Society, Eurocontrol, IATA,International Transport Forum OECD,etc.). It also involved on-the-spot auditvisits to assess the outputs, resultsand impacts of the EU funding and thefinancial situation of the airports. Theaudit scope did not include an analysisof state aid issues in relation to airportinfrastructures.

20The audit work was carried out be-tween May 2013 and May 2014.

10 This concerns six airports:three in Spain, one in Italy, onein Greece and one in Estonia.

11 The audit concentrated onmainland airports: smallairports on islands, whereverpossible, were excluded fromthe audited population, asgenerally these would exhibitlower economies of scale andalso the population haslimited possibilities to chooseanother airport.


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13Audit scope and approach

21The Court notes that:

The long term trend of air trans-port demand is positive: despitea temporary dip following the eco-nomic crisis, there was a recoveryof air transport numbers in Europein 2010, with a 3,4 % increasein total number of passengerscompared to 200912. Overall, EU-27passenger numbers increased by6 % between 2007 and 2013.

The national averages for allairports in the five Member Statesexamined by this report had anaverage growth of 2 % between2007 and 2013.

While there was a limited andtemporary crisis effect noted in2007 and 2008, growth returnedto the air transport sector for therest of the audited period. There-fore the economic crisis did notsignificantly affect the results ofthe airport infrastructure projectsexamined.

12 Eurostat, Air transportrecoversin 2010: Issue number21/2012 (http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDF).
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDFhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDFhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDFhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDFhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDFhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDFhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDFhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDFhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-021/EN/KS-SF-12-021-EN.PDF


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14Observations

Need for new or upgradedinfrastructuresdemonstrated for half ofthe airports examined

22During the audit the Court assessedwhether at landside there had beena need for the investments in termi-nals. To this purpose, the Court com-pared the yearly number of passengersper m before and after the invest-ment using as criteria the Europeanbenchmark 13 of 104 annual passengersper m .

23In 10 of the 14 terminal constructionprojects, there was a demonstrableneed for expansion to avoid future sat-uration or projected bottlenecks (Cata-nia, Crotone, Naples, Fuerteventura, LaPalma, Vigo, Heraklion, Thessaloniki,Rzeszw and Tallinn). In two cases (Co-miso and Tartu), new terminals wereneeded to allow the operation of com-mercial traffic. However, there was nopressing need for terminal expansionsat Alghero (5,2 million euro of EU fundsspent) or Badajoz (6 million euro of EUfunds spent): sporadic hourly peaks atthese airports could have been betterdealt with through temporary solu-tions14, rather than building permanentinfrastructures which are for the mostpart underused (see Figure 3).

24Similarly, at airside, half of the runwayand apron expansions financed withEU-money were needed to managepeak hour bottlenecks: in nine of the18 EU fundedairside investments,there was evidence that capacityexpansion was needed (Badajoz, LaPalma, Murcia, Vigo, Catania, Naples,Gdansk, Rzeszow and Tallinn). Inthree cases (Crdoba, Fuerteventuraand Kastoria), the need for a capac-ity expansion was not justified: theexisting airside infrastructure wasmore than sufficient to cope with theforecast demand even in the long runin Crdoba and Fuerteventura, while inKastoria the business case supportingthe project to extend the runway wasnot adequate.

25Overall, in 9 of the 20 airports audited,one or more of the projects sampledfor audit were not needed at all. Thisrepresents 28 % or 129 million euro ofthe EU funding to airports examined,.

13 2012 Airport BenchmarkingReport, published by theATRS-Air Transport ResearchSociety http://www.atrsworld.org/docs/KeyFindings2012A-TRSBenchmarkingRe-port-June22.pdf

14 E.g. hiring more (part-time)staff to speed up the handlingof incoming or departingpassengers; installingtemporary and mobileinfrastructures to transportpassengers between airsideand landside.
http://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdf


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15Observations

Use of terminal before expansion

F i g u r e

3

Source: The airport authorities data.

Key: The benchmark of 104 passengers per m is indicated by the red line; use of the existing capacity before expansion above this benchmarkis coloured in green; orange is used for airports having between 50 and 100 % of the benchmark, whereas red is used for airports with less than50 % of the benchmark. As Comiso is a new airport that was only opened in 2013, analysis of the use of the terminal before expansion is notrelevant.

Yearly passengers/m

2 of terminal

F u e r t e

v e n t u r a

V i g o L a

P a l m a

B a d a j o z

A l g h e r o C a t a n i a

C o m i s o C r o t o n e

N a p l e s

T h e s s a

l o n i k i

H e r a k l i o n R z e

s z o w T a l l i n n T a r t u

500

450

400

350

300

250

200

150

100

50

0

se o termna e ore termna expans on(average before terminal expansion)


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16Observations

Examples of EU-funded airport infrastructures

(a) Building of a new terminalIn Catania in Italy, the terminal building was too small for the number of passengers using the airport.A local aero-club hangar was therefore upgraded and used as a temporary departure hall until the open-ing of the new passenger terminal building (seeFigure 3) which could accommodate passenger traffic andeliminate the previous bottlenecks.

B o x

2

26Box 2 provides examples of EU-fundedinfrastructure projects.

Picture 3 - New terminal building at Catania airport. S o u r c e :

E u r o p e a n

C o u r t o

f A u

d i t o r s

.


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17Observations

(b) Unnecessary airside expansionThe 2001 Master Plan for Crdoba airport in Spain stated that there would be no need for expansion of theexisting runway based on the traffic forecast and the types of aircraft expected (the historical maximum ofATMs/hour in Crdoba was four, while the existing capacity of the apron and runway was 11 ATMs/hour).Moreover, 99 % of the 4,2 million residents living in the catchment area of this airport have also access toat least one other airport within a two hour drive. The traffic attracted by the nearby airports of Mlaga(12,5 million passengers in 2012) and Seville (4,3 million passengers), combined with the connectivityprovided by the high-speed rail line between Seville, Crdoba and Madrid significantly limits the air traf-fic demand of this airport. Nevertheless, the Spanish government decided in 2008 to expand the runway,without any needs analysis or study of potential growth, cost-benefit analysis or justification for the sud-den expected increase in passenger traffic. The runway was extended, allowing the landing and take-offof larger aircraft, at a cost of more than 70 million euro, of which more than 12,6 million came from the EUbudget. However, the volume of air traffic, essentially non-commercial general aviation, remained at thelow level which existed prior to the expansion. The apron space was also extended by 17 300 m at a costof 1,5 million euro, including an 810 000 euro EU investment, despite the original plan being for an expan-sion of only 6 775 m . Since there is very little commercial traffic at this airport (less than 7 000 passengersin 2013), the extended runway is rarely used and the increased apron space is used as parking space fornon-commercial planes (general aviation) (seePicture 4).

B o x

2

Picture 4 - Crdoba apron: expansion used only for general aviation purposes. S o u r c e :

E u r o p e a n

C o u r t o f

A u

d i t o r s

.


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18Observations

Delays in constructionsfor most and costoverruns for half of theairports examined

27The Court also examined whetherthe examined airport infrastructureprojects have been completed on timeand on budget. The audit found that:

at the time of the audit, all but oneproject had been completed;

there were delays in constructionand in the final delivery of theairport infrastructures in 17 of the20 audited airports15. In 14 cases,the delay was more than a yearwith the average delay being 23months. The longest delays werenoted in Murcia-San Javier, Thes-saloniki and Naples16, and

there were cost overruns noted atnine of the 20 audited airports, re-sulting in approximately 95,5 mil-lion euro more being spent thaninitially budgeted (eight of thesenine airports17 had cost overruns ofseveral million euros). The high-est cost overrun was noted in LaPalma, with 25,6 million euro onthe projects audited, and Thes-saloniki where the runway exten-sion to the sea had a cost overrunof 21,7 million euro at the time ofthe audit. These cost overruns aremore than 10 % of the total costamount for these nine airports andare covered by national budgets18.

More than half of theconstructions wereunderused

28The IATA19 manual suggests a carefulapproach when investing in airportinfrastructure, recommending a policyof modular growth20. European Com-mission guidance on such buildingstressed the need to make better useof existing capacity in the f irst instanceand only build infrastructures whichare necessary, proportional to the ob- jective set and which have satisfactorymedium-term prospects for use21.

29The Court examined the actual use ofthe EU-funded infrastructures in theaudited airports. To this purpose theCourt assessed the use of the addition-al terminal space created by analysingthe annual number of passengers perm as well as the use of the terminalat the peak hour. For airside invest-ments, the Court examined the use ofthe capacity created by analysing theevolution of the ATM numbers.

15 The airports without any delayin the building and delivery ofthe infrastructure comparedto initial planning wereCrotone, Gdansk and Tartu.

16 In Murcia-San Javier, theairside facilities, the controltower and the runway wereput into operation 5 yearsafter their completion; inThessaloniki, the delay was4,5 years for the terminalproject; in Naples the delaywas 4,5 years for the air trafficmanagement project despitethe fact that the contractingauthorities had awardedworks directly for reasons ofurgency.

17 The exception is the airport ofBadajoz, where a smalloverrun of 223 000 euro or2,8 % of the budget wasnoted.

18 In another audit the Court alsonoted similar weaknesses inproject preparation in anairport infrastructure projectnanced under TEN-T

spending. In the case of BerlinBrandenburg internationalairport, planning documentswere not ready and had to bemodied during the tenderingprocess, leading to signicantcost overruns.

19 International Air TransportAssociation is the tradeassociation for the worldsairlines. It represents some 240airlines or more than 84 % oftotal air traffic. IATA supportsairline activity and helpsformulate industry policy andstandards.

20 Building of infrastructure ina modular fashion (phases)and at intervals to keepslightly ahead of demand, andto maintain pre-determinedand required levels of service.Source: Section C1.13.7 of the2004 IATA AirportDevelopment Referencemanual.

21 Point 61 of CommunityGuidelines on nancing ofairports and start-up aid toairlines departing fromregional airports (OJ C 312,9.12.2005, p. 1).


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19Observations

Yearly terminal utilisation rate after terminal expansion

F i g

u r e

4


Key: The benchmark of 104 passengers per m is indicated by the red line; green is used for airports which have an average use above this bench-mark following expansion; orange is used for airports between 50 and 100 % of the benchmark, whereas red is used for airports which have anaverage of less than 50 %.

F u e r t e

v e n t u r

a V i g

o L a

P a l m

a

B a d a j o

z

A l g h e r

o C a t

a n i a

C o m i s o

C r o t o n

e N a p

l e s

T h e s s a

l o n i k i

H e r a k l i o n

R z e s z o

w T a l

l i n n T a r t u

250

200

150

100

50

0

Y e a r l y p a s s e n g e r s

/ m 2

o f t e r m

i n a

l

Yearly terminal utilization rateafter terminalexpansion(average after terminal expansion)

30At landside, when comparing theuse of the new or additional terminalspace created to the benchmark 22 of104 annual passengers per m , onlyfour of the 14 audited airports (Cata-nia, Naples, Heraklion and Thessalon-iki) attained the benchmark. Averageuse at the other 10 airport terminalswas considerably below the bench-mark with seven terminals23 havinga yearly utilisation rate below 50 %: seeFigure 4). Overall, more than half ofthe EU funds audited (55 %, or 255 mil-lion euro) went into infrastructureswhich were unnecessarily large.

31When assessing the use of the ad-ditional terminal space at the peak(usually the busiest hour of the busiestmonth of the year24), eight airports hada good use of their terminal space (Al-ghero, Catania, Comiso, Thessaloniki,Heraklion, Rzeszw, Tallinn and Tartu)and three airports had a reasonableuse of their capacity (La Palma, Vigoand Naples). However, two airports(Badajoz and Fuerteventura) had builtcapacity which is not fully used at peakhour.

22 As published by the ATRS-AirTransport Research Society, inrespect of European airportsin 2010. http://www.atrsworld.org/docs/KeyFindings2012A-TRSBenchmarkingRe-port-June22.pdf

23 Of the 7 terminals identied asbeing underused, theterminals at Comiso andRzeszw only becameoperational in 2013 and 2012respectively. According totheir forecasts, these airportswill reach the benchmark of104 passengers per m2 in 2018(Comiso) and 2031 (Rzeszw).

24 In Spain, the denition of thepeak hour was either the 30thbusiest hour of the year or theone that accumulates 97,75 %of the traffic.
http://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdfhttp://www.atrsworld.org/docs/KeyFindings2012ATRSBenchmarkingReport-June22.pdf


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20Observations

Examples of oversized infrastructures

(a) New terminalAt Fuerteventura airport in Spain, a project involving 21 million euro of EU funding was undertaken to en-large the terminal. This project almost tripled the existing floor area (from 34 000 m2 to 93 000 m2), added14 boarding gates (from 10 to 24), eight more luggage belts (from seven to 15) and four additional contactgates (from five to nine contact gates). The scale of the works was pre-determined by a passenger forecastof 7,5 million passengers by 2015, whereas in 2013 the airport had 4,3 million passengers. However, evenif the forecasted 7,5 million passengers had been achieved, the terminal would still have been over-di-mensioned, as according to IATA standards, ten belts would have been sufficient rather than the 15 built.Moreover, as there was not enough traffic to allow the new terminal to be used to its full capacity, and asthere will not be enough traffic before 2030 taking into account the latest forecast, the airport authoritydecided to close part of it (six of the 24 gates) in order to reduce overall maintenance costs (seePicture 5).

B o x

3

32Similarly, the Court assessed airsidecapacity, which depends on the num-ber and characteristics of runways, thesize and configuration of aprons, theexistence of taxi-ways and exit-waysand the type of aeroplanes using theairport. In only four of the airside infra-structure expansions using EU-funding(in Catania, Naples, Thessaloniki andTallinn), were the works in line withreal needs; one airport (Alghero) cre-ated reasonable capacity regardingpeak hour use, while excessive capac-ity was created in the other 11 airportsaudited.

33Box 3 provides examples of oversizedinfrastructures.

S o

u r c e :

E u r o p e a n

C o u r t o

f A u

d i t o r s

.

Picture 5 - Closed part of the Fuerteventura terminal.


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21Observations

(b) Expansion of runwayAlthough there was a need to extend the airside capacity at La Palma, one of the Canary Islands, the addi-tional capacity created by expanding the platform and works on the runway (including the construction oftwo car parks under the runway which are not used) in 2008 was not in keeping with the real needs: afterexpansion (total cost 36,4 million euro; EU funding of 17,1 million euro) the new air-side capacity increasedfrom 12 to 30 ATMs/hour, while the peak of ATMs/hour since the expansion has only been 13 ATMs/hour.Therefore the additional capacity created will continue to be underused until the number of ATMs/hourrises significantly (seePicture 6).

B o x

3

S o u r c e :

E u r o p e a n

C o u r t o

f A u

d i t o r s

.

Picture 6 - Oversized apron at La Palma airport.


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22Observations

Empty and unused airport infrastructures

The cargo project at Thessaloniki airport in Greece involved building two new cargo terminal buildings, therenovation of two existing cargo buildings and the construction of a parking area. The two newly built cargobuildings remained empty (seePicture 7), and only one of the two renovated cargo buildings was in regularuse at the time of the audit visit (EU funds involved: seven million euro). There was no evidence of any studybeing carried out to demonstrate a need to extend capacity for air cargo in the region.

B o x

4

34The Court also assessed whether thebuilt infrastructures were in use at thetime of the audit. Most of the infra-structures were being used, but some38 million euro (8 % of the total) of EUfunds audited was invested in infra-structures which were not used at thetime of the audit.

35Box 4 provides an example of an un-used infrastructure.

S o

u r c e :

E u r o p e a n

C o u r t o

f A u

d i t o r s

.

Picture 7 - One of the two new cargo buildings at Thessaloniki airport, which were empty at the time of the audit visit.


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23Observations

EU funding forinvestments which are notcost-effective

36For infrastructure projects, at the project application approval stage, an in-vestment decision is made based uponthe projected costs and revenues offuture operation. Theoretically the project should only go ahead if forecastrevenues more than cover costs andideally make a contribution towardsfinancial sustainability. The risk to EUinvestment in such projects would bethat the forecast costs and revenuesturn out to have been unrealistic. Forthe type of project examined, the mainareas of concern would be a failure tosee the expected increase in passen-ger numbers or that costs have beenunderestimated.

37The Court calculated an estimatedcost per additional passenger andcompared this with the planned costincluded in the forecasts made whenthe investments were being decidedupon to assess the risk for the EU ofinvesting in airport infrastructureswhich are not cost effective. This costper additional attracted passengerwas calculated by dividing the capitalinvestments made in the 20 airportsduring the period 2000 to 2012 by thenumber of passengers over a notional20 year25 period (based on the actualnumber of passengers up to 2013 andon the latest forecasts made by the air-ports for the remainder of the period(see Figure 5).

38The Courts assessment26 shows that:

for 10 airports (Alghero, Catania,Comiso, Crotone, Naples, Thessa-loniki, Heraklion, Rzeszw, Gdanskand Tallinn), the cost per additionalpassenger is less than 10 euro, andwas generally in line with the fore-cast cost;

for Madrid, the estimated real costper passenger is 32 euro, far higherthan the 19 euro used at the plan-ning stage;

for six Spanish airports(Fuerteventura, Burgos, Murcia, LaPalma, Badajoz, Crdoba) and Tartuin Estonia, the estimated actualcost of attracting an additionalpassenger is more than doublethat forecast. This indicates thatthese investments bear a higherrisk of not providing a return oninvestment, and that the forecastsupon which they were based wereoveroptimistic, and

for Vigo and Kastoria, the estimatedcost per additional passengercannot be calculated as the invest-ments did not result in attractingany additional passengers.

25 Different time spans aresuggested for assessing thelifetime of airportinfrastructures: the EuropeanCommission Cost-BenetAnalysis (CBA) guide suggestsa 25 year period; the Jaspers(Joint Assistance to SupportProjects in European Regions)guidance gives a range of 20to 40 years for buildings andbetween 15 and 30 years forrunways, taxiways and aprons;IATA suggests to build for 10years and nationalimplementing bodies have 20or 25 years as standards. Onthis basis, the Courtscalculation took 20 years asthe expected lifespan of theinfrastructure.

26 It should be noted that thegure reported includes onlyinitial infrastructure costswhile operational items suchas the cost for maintaining theinfrastructure, police,reghters, customs andmarketing have not beenincluded.


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24Observations

Cost per additional passenger 1

F i g u r e

5


Key: In blue the planned cost per additional passenger; in red the calculated cost per additional passenger.

1 The planned cost per additional attracted passenger was calculated by dividing the capital investments made in the 20 airports during theperiod 2000 to 2012 by the number of passengers forecast over a notional 20 year period. The cost per additional attracted passenger was cal-culated by the Court by dividing the capital investments made in the 20 airports by the actual number of passengers up to 2013 and by the mostup-to-date forecasts for the remainder of the period, provided by airport management.

0

20

40

60

80

100

120

F u e r t e

v e n t u r

a M a

d r i d B u r

g o s M u

r c i a

L a P a l

m a B a d

a j o z

T a r t u

T a l l i n n

G d a n s k

R z e s z o

w

H e r a k l i o n

T h e s s a l o n

i k i N a p

l e s C o m

i s o C a t

a n i a

A l g h e r

o

C o r d o b

a C r o

t o n e

Planned cost per additional passenger Cost per additional passenger

e u r o

Cost peradditional passenger


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25Observations

Seven of the 20 auditedairports are notfinanciallyself-sustainable

39The Court also assessed whetherthe audited airports are financiallyself-sustainable and profitable27.To thisend the Court carried out an analy-sis of the financial statements of theairports.

40The analysis showed that four of the20 audited airports were regularlyprofitable during the audited period(Catania, Naples, Tallinn and Gdansk).Seven airports, whilst not yet profit-able, had prospects of breaking-evenin the medium term (Fuerteventura,Madrid-Barajas, Murcia, Alghero, Co-miso, Rzeszw and Tartu) but anotherseven airports audited (Badajoz, Bur-gos, Crdoba, La Palma, Vigo, Crotoneand Kastoria) made significant lossesbetween 2007 and 2012.

41The Court also calculated a profit orloss per passenger using the airportsfinancial statements and categorisedthe airports using three thresholdsbased on the number of passengersserved on average during the auditedperiod: fewer than 100 000 passen-gers, between 100 000 and 1 500 000passengers, and more than 1 500 000passengers. This analysis (see Figure 6) shows that airports with fewer than100 000 passengers per year made anaverage loss per passenger of 130 euroover the period.

42Although not the only factor, the lownumber of passengers at many of theairports audited suggests that thereis a high risk that there will not bea financial turnaround in the mediumterm (the lower the passenger num-bers, the higher the loss per passengeras such items as high fixed costs ordepreciation are spread across a rela-tively small number). Typically thosewith fewer than 100 000 passengersper year are smaller regional airports,which will struggle to remain in opera-tion without continuing financial sup-port from public funds.

43Investments in airport infrastructurealso imply costs in future years forboth operations and maintenance.Therefore, any decision to investin such airports needs to be basedupon convincing evidence that thesocio-economic benefits will outweighthe often significant costs involved28.

27 Based on the nancialstatements provided by theHCAA for the airports ofThessaloniki, Heraklion andKastoria only an estimation ofcash ows could be producedby the Court.

28 For example, in order to cutcosts while maintaining theoperability of smaller airports,the Spanish Ministry ofDevelopment decided in June2012 to reduce themaintenance costs of 17airports having fewer than500 000 passengers per year,and decreased their weeklyoperating hours and staffnumbers.


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26Observations

Average profit or loss per passenger for the audited airports over the2007 and 2012 period

F i g u r e

6

Source: The airport authorities accounting data. The losses per passenger may in reality be higher as:(i) some of the costs for operating an airport do not appear in an airports nancial statements (for example the cost of policing, the re service,customs, marketing, etc), and(ii) the Greek airports neither calculate depreciation costs nor include interest charges.

29 The airports of Bilbao, Leon,Logrono, Valladolid andVitoria are less than a two hourdrive from Burgos, whilePamplona, Santander and SanSebastian are within 2 hoursand 10 minutes.

20

0- 20

- 40

- 60

- 80

- 100

- 120

- 140

e u r o

Prot/Loss per passengers per year(average in 2007-2012)

Airports over 1 500 000 passengers

Airports between 100 000and 1 500 000 passengers

Airports under100 000 passengers

1 euro

- 7 euro

- 130 euro

44An example of the problems facingsmaller airports can be seen at Burgos.Burgos airport, due to high deprecia-tion charges on the infrastructure andlow passenger numbers (18 905 pas-sengers in 2013), accumulated a finan-cial loss of 30 million euro (67 % of itstotal assets) from its opening in July2008 until the end of 2012. In addition,

as 90 % of all commercial flights areoperated by one single carrier toonly one destination (Barcelona), thisairport runs a high risk of continuingunsustainably low passenger numbersgoing forward as the population inthe catchment area has at least fivealternatives29 to fly from other air-ports within a two hour drive (see alsoBox 5).


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27Observations

Example of an airport which is not financially self-sustainable.

In Kastoria, airport revenue was 176 000 euro for 2005-2012 whilst, during the same period, the total cost ofkeeping the airport open was 7,7 million euro. For the period given, the total number of passengers was 25thousand people representing a loss of about 275 euro per passenger. Some 16,5 million euro (5,6 million euroof EU-funds) has been invested in an extension to the runway at this airport which has up to the time of thisreport never been used by the type of aircraft for which the extension was built. This cannot be considered asan effective use of public funds.

B o x

5

45According to the Airports CouncilInternational (ACI) Economics Report2011, airports with over 5 million pas-sengers per year can operate profit-ably, airports having between 1 and 5million passengers per year can meettheir operational expenses, and therevenues of smaller airports cannotcover even their variable costs. This isin keeping with the Courts own calcu-lations outlined at Figure 6.

Forecast of passengernumbers significantlyoveroptimistic for 12 ofthe 20 airports examined

46The Court assessed the quality and thereliability of the traffic forecasts thatwere prepared to support the invest-ment decisions, examining the diver-gences with the actual evolution ofpassenger numbers.

47The Court found that the forecasts ofadditional passenger numbers con-tained within these plans were sig-nificantly overoptimistic in 12 out of20 airports. For example, in Crdoba,in 2013, 6 955 passengers travelled,against 179 000 forecast, and forCrotone, the numbers were 28 892 pas-sengers, against 306 000 forecast.


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28Observations

48Considering the number of passengersthat used the airports up to 2013 andthe numbers forecast by the airportsfor the following years, the additionalpassengers are likely to be on average36 % less than had been forecast at thetime of deciding on the investments.In only six cases (Alghero, Catania,Comiso, Gdansk, Heraklion and Tal-linn), were actual passenger numbersin 2013 higher than those forecast.Two airports had forecasts which wereless than 10 % higher than the actualadditional passenger numbers (Naplesand Rzeszw) while the forecasts forall other airports were significantlyoveroptimistic (seeFigure 7).

Limited impact ofEU-funded investmentson passenger numbers,customer service and jobcreation 30

49The Court examined whether antici-pated results have been achieved byanalysing the evolution of passengernumbers, customer services and theimpact of the investments on jobcreation.

30 A list of the audited airportswith a full overview of auditndings and results can befound in Annex III.

Quality of forecasting 1

F i g u r e

7


Key: The airports having a higher number of additional passengers in the 20 years after expansion works compared to those forecast are in green;additional passenger numbers of less than 10 % below the forecasts are in orange whereas those below the latter threshold are in red.

1 The Court assessed the quality of the forecasting by comparing, for each airport, the original forecast of additional passengers to be attractedwith the actual number of passengers that used the airport until 2013, and with the most up-to-date forecast for the remainder of the period,provided by airport management. This was calculated for a period of 20 years following the expansion works.

- 180 %

- 160 %- 140 %

100 %

80 %

60 %

40 %20 %

0 %- 20 %

- 40 %

- 60 %

- 80 %- 100 %

- 120 %

F u e r t e

v e n t u r

a M a

d r i d B u r

g o s M u

r c i a

L a P a l

m a B a d

a j o z

T a r t u

T a l l i n n

G d a n s k

K a s t o r i a

H e r a k l i o n

T h e s s a l o n

i k i N a p

l e s C o m

i s o C a t

a n i a

A l g h e r

o C o r

d o b a

C r o t o n

e V i g

o

R z e s z o

w

A v e r a g

e

- 73 %

- 36 %

- 162 %

- 40 %

- 68 %- 52 %

- 73 %- 62 % - 60 %

- 50 %

- 9 %

- 47 %

- 126 %

- 6 %

- 71 %

11 %28 %

40 %

85 %

12 %14 %


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29Observations

50Table 2 provides the passenger datafor the audited airports for 2007 (thefirst year of measurement), 2010 (pas-senger data after the crisis) and 2013.Only ten of the 20 audited airports suc-ceeded in increasing their passengernumbers between 2007 and 2013. Themain gains in passengers were notedin Gdansk (an increase of 1,1 millionpassengers) and in Catania, Heraklion

and Rzeszw (300 000 to 400 000more passengers). Nine of the airports(Fuerteventura, Madrid, Vigo, Murcia,La Palma, Badajoz, Cordoba, Crotoneand Naples) had even lower passengernumbers in 2013 than they had in 2007.

Overview of passenger trends at the examined airports

2007 2010 2013 Variation2007-2013

Fuerteventura 4 629 877 4 173 590 4 259 341 -8 %Madrid 52 110 787 49 866 113 39 729 027 -24 %

Vigo 1 405 968 1 093 576 678 720 -52 %

Burgos 13 037 33 595 18 905 45 %

Murcia 2 002 949 1 349 579 1 140 447 -43 %

La Palma 1 207 572 992 363 809 521 -33 %

Badajoz 91 585 61 179 29 113 -68 %

Crdoba 22 410 7 852 6 955 -69 %

Alghero 1 300 115 1 388 217 1 563 908 20 %

Catania 6 083 735 6 321 753 6 400 127 5 %

Comiso 59 513

Crotone 106 122 103 828 28 892 -73 %

Naples 5 775 838 5 584 114 5 444 422 -6 %

Thessaloniki 4 168 557 3 910 751 4 337 376 4 %

Heraklion 5 438 825 4 907 337 5 675 653 4 %

Kastoria 3 806 3 019 5 304 39 %

Rzeszw 279 996 454 237 589 920 111 %

Gdansk 1 715 816 2 225 113 2 844 308 66 %

Tallinn 1 728 430 1 384 831 1 958 801 13 %

Tartu 1 182 23 504 13 790 1 067 %

TOTAL 88 086 607 83 884 551 75 594 043 -14 %

Source: The airport authorities passenger data.

T a

b l e 2


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30Observations

51Evidence showing improvements incustomer service was limited. At threeairports (Fuerteventura, Thessalonikiand Heraklion) EU-funded projectshad specific objectives to increasethe quality of service to passengers.Surveys among passengers andairlines using satisfaction indicatorsgenerally indicated an upward trendof customer service since 2010 at thesethree airports. This was also the casefor eight others (Badajoz, La Palma,Madrid-Barajas, Vigo, Alghero, Catania,Naples and Rzeszw). In the remain-ing nine airports, there was either noimprovement in the quality of serviceprovided to passengers, or no meas-urement of whether such improve-ments had taken place.

52Job creation and economic growth aregenerally claimed to be good reasonsfor investing in airports. The Courtfound, however, that socio-economicbenefits were generally not measured.There was also little evidence that ad-ditional jobs were created as a resultof the EU investments in the auditedprojects. In the case of four airports(Comiso, Rzeszw, Gdansk and Tallinn),a limited number of newly createdpermanent jobs can be directly linkedto the EU projects audited. Studiesprovided by Madrid Barajas, Algheroand Gdansk indicate generic benefitsfor a region from the siting of an air-port and its operation. However, thesestudies do not establish a link betweenan improvement in regional GDPfigures and EU-funded investments inairport infrastructures.

Similar investments inairports in close proximityto each other

53The Court also examined the areaof influence of the airports, i.e. theircapacity to attract visitors and cus-tomers (the catchment area) whichdepends on the population nearbyand the surface transport possibili-ties. To this purpose the Court usedthe latest Eurostat data available oncurrent road connections, traffic speeddata, population and potential tour-ist numbers31. The Court analysed theoverlaps of catchment areas, applyinga uniform criterion of 120 minutesdriving distance32.

54This analysis (all charts for the auditedairports are in Annex IV) indicates that: For 13 out of 18 audited airports33,

significant overlaps34 exist with thecatchment areas of neighbouringairports, and in many cases thereare overlaps with several catch-ment areas. The vast majority ofthe population living in the catch-ment area of the airports auditedhad several other opportunitieswithin a two hour drive to travel byair via a neighbouring airport. Only5 airports of the audited sample(Madrid-Barajas, Badajoz, Tartu,Tallinn and Rzeszw) were locatedin places where the majority ofthe population had limited oppor-tunities to choose an alternativeairport within a two hour drive;

31 The latest road data availablewas from the 2009 TeleAtlasroad network. Population datawere based on the 2006population grid. Tourism datawere also from 2006, derivedfrom nights spent in touristaccommodations and numberof beds. Airport locations weretaken from the referencedatabase of Eurostat (GISCO).Nearby competitor airportswere identied based on thenumber of passengers peryear (airports having fewerthan 15 000 passengers peryear were not considered).

32 While accepting that eachindividual airport has its ownspecicities, the Court hasopted to use an overall twohour catchment areadenition for its assessment,as this was supported byvarious references in therelevant literature: e.g. Starkie2008, Marucci et Gatta, 2009.In addition, many passengersgo beyond this time: e.g. thereare regular bus linesscheduled to bring passengersfrom the audited airport ofTartu to Riga in 3,5 hours(https://www.airbaltic.com/en/bus).

33 The airports of Fuerteventuraand La Palma were excludedfrom this assessment, as theseare single-island airports.

34 The Court considers anoverlap to be signicant ifmore than 75 % of thepopulation has access tomultiple airports withina range of 120 minutes drivingtime.
https://www.airbaltic.com/en/bushttps://www.airbaltic.com/en/bushttps://www.airbaltic.com/en/bushttps://www.airbaltic.com/en/bushttps://www.airbaltic.com/en/bus


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31Observations

There is a proliferation of airportsvery close to each other whichinvested in similar infrastructure(terminals, aprons, runways):although most airports had sig-nificant overlaps, there was littleconsideration given to investmentsin neighbouring airports, whichwould have been necessary forrational planning and optimisingthe use of EU-funds.

55An alternative analysis carried outby the Court, using the 90 minutesdriving distance as criterion which hasalso been used by the Commission ina 2013 study35, has resulted in similarfindings36.

56Only some airports used catchmentarea analysis in their future invest-ment planning. However, each airporthad a differently defined catchmentarea as none of the Member Stateshad established a common defini-tion. Catchment area analysis wasgenerally not used to identify overlapsbetween airports in close proximity toeach other and their consequences ongrowth potential. This often resultedin the double counting of potentialpassengers in the totals used by eachairport to justify its expansion (forexample, the master plans of Cataniaand Comiso airports, both of whichreceived significant EU funds, doublecounted a major part of the populationliving in the catchment area of bothairports).

57The impact of the investments madein the nearby airports or the impact ofcompeting modes of surface transportwas usually not taken into considera-tion when deciding whether or not toexpand an airports capacity (see twoexamples inBox 6). A notable excep-tion was Madrid Barajas airport, wheretraffic forecasts were adjusted to takeinto account the fact that the air routeto Barcelona would lose 40 % of itspassengers as a result of the expectedopening of a high-speed rail line.

35 Commission publicationMeasuring accessibility topassenger ights in Europe:Towards harmonisedindicators at regional level,Regional Focus, 01/2013 ofSeptember 2013.

36 The percentage of residentswith access to multipleairports when using the 90minutes instead of the 120minutes driving distancecriterion- remains over 75 %for 12 audited airports.


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32Observations

Examples of catchment area analysis

(a) In Vigo, extensive overlaps exist as basically the whole population (99,92 % of the 6 164 630 residentsin the Vigo catchment area) also has access to at least one other airport within a two hour drive. The airtraffic demand of this airport will be affected by the presence of nearby airports at La Corua, Santiago deCompostela and Porto, and high speed rail connections to other parts of Spain.

B o x

6

Lisboa

Santiago

Vigo

La Corua

Len

Valladolid

Porto

0 20 40 60 80 100 km

Number of airports overlapping with the audited airport Vigo, Spain (LEVX)

12

3

Cartography: Eurostat GISCO, 10/2013

Legend

2 hour travel time from audited airport

Audited airports

Competitor airports

No-competitor airports

Number of Overlapping Airports

No-overlaps

4 >Country border

Administrative boundaries: EuroGeographics

Vigo (LEVX) overlap with airport(ICAO code)

No ofresidentsin the overlap

area per airport

Residentsin overlap (%)

Distance tocompetitorairport (km)

Timeto competitor

airport (minutes)La Corua (LECO) 2 431 790 39,45 137 83Santiago (LEST) 3 316 240 53,79 93 57Porto (LPPR) 4 658 720 75,57 128 77Len (LELN) 411 0,01 328 234Lisbon Portela (LPPT) 527 0,01 439 226

No of residentwithin 2 hours from audited

airport

Total no ofresidents overlap

with access tomultiple airports

Residents in overlap


(%)

Distance to railstation (km)

Distance to railline (km)

No of touristnights per yearwithin 2 hours from audited

airports

6 164 630 6 159 440 99,92 3,02 2,98 19 166 393 Sources: Eurostat Population (2006) and Tourism data (2006/2010)


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33Observations

(b) Murcia San-Javier was initially a military airport open to civil traffic with some restrictions related to theoperating hours. Decisions were taken from 2003 to 2007 to build additional airside capacity for themilitary which would in return allow the civil airport to also open in the morning. However, there was noanalysis of the overlap between the catchment areas of San Javier and Alicante, or the nearby airport ofCorvera, only 37 kilometres away37. The Corvera airport was completed in 2012, at the same time as theMurcia San-Javier investments, but was not operational at the date of the audit as it has not yet receivedthe certification it had applied for in October 2011.

B o x

6

0 20 40 60 80 100 km

Albacete

Almera

CorveraMurcia - San Javier

Alicante

Valencia

Number of airports overlapping with the audited airport Murcia - San Javier, Spain (LELC)

Administrative boundaries: EuroGeographics Cartography: Eurostat GISCO, 10/2013

12

3

Legend

2 hour travel time from audited airport

Audited airports

Competitor airports

No-competitor airportsNumber of Overlapping Airports

No-overlaps

4 >Country border

Murcia (LELC) overlap with airport(ICAO code)

No ofresidents in the overlap

area per airport

Residents inoverlap (%)

Distance tocompetitorairport (km)

Time tocompetitor airport

(minutes)Albacete (LEAB) 2 451 970 66,39 183 123Alicante (LEAL) 3 532 000 95,64 69 52Almeria (LEAM) 691 125 18,71 201 118Granada (LEGR) 77 610 2,10 307 200Valencia (LEVC) 1 733 710 46,94 232 149Corvera (LEMI) 3 431 170 92,91 36 33

No of residentwithin 2 hours from audited

airport

Total no ofresidents inoverlap with

access to multiple

airports

Residents in overlap


(%)

Distance to railstation (km)

Distanceto railline (km)

No of touristsnights per yearwithin 2 hoursfrom audited

airports3 693 100 3 692 610 99,99 13,28 13,02 28 630 490

Sources: Eurostat Population (2006) and Tourism data (2006/2010)


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34Observations

58For the airports of Crdoba, Vigo, Mur-cia, Burgos, Alghero, Crotone, Naples,Catania, Comiso, Kastoria and Gdansk,overlaps in their catchment areas wereparticularly pronounced. The nearestcompetitor airport is in most casesonly a one hour drive away and 97 %of those living within two hours ofthese 11 airports also have access toat least another airport within a twohour drive. In Crdoba, Vigo, Murciaand Naples, there are three competitorairports within a two hour drive and inthe case of Burgos there are five com-petitor airports within the same range,see Table 3.

59The definition used by the Commis-sion for issuing state aid decisions isthat the catchment area of an air-port in general means a geographicmarket boundary that is normally setat around 100 kilometres or around60 minutes travelling time by car, bus,train or high-speed train. On the basisof new guidelines on state aid adoptedin February 2014, the Commissionadopted a number of decisions con-cerning investment and operating aidto airports and airlines highlightingthat (i) subsidies to airport infrastruc-tures which are too close to each otherdo not contribute to regional acces-sibility or development and (ii) theduplication of unprofitable infrastruc-ture is a waste of taxpayers moneywhich distorts competition betweenairports38. These observations are inkeeping with the Courts audit results.

37 In 2003, the idea of the newairport in Corvera wasapproved by the Ministry andthe airport was declared to beof a general interest for thestate. The tender forconcession was awarded inMay 2007; the technical designproject was completed in June2008 and the physicalinstallations completed byApril 2012.

38 Statement of theVice-President of theCommission Joaquin Almunia,1.10.2014; see also: IP/14/1065,MEMO/14/544.


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35Observations

Number of airports competing with the audited airports with data on driving timeand distance

Country Audited Airports

No of competitorairports within2 hours from

audited airport

Average drivingtime to competi-tor airports (min)for residents in

overlaps

Nearest competitor

airport

Driving timeto nearest competitor

airport (min)

Roaddistance

to nearest competitorairport (km)

Spain

Crdoba 3 113 Seville 87 119

Vigo 3 72 Santiago 57 93

Fuerteventura 1 79 Lanzarote 79 81

La Palma 0

Murcia 3 80 Corvera 33 36

Badajoz 0 134 Lisbon 127 226

Burgos 5 100 Vitoria 70 114

Madrid Barajas 0 158 Valladolid 140 213

Italy

Alghero 2 109 Olbia 93 126

Crotone 1 101 Lamezia T. 62 88

Naples 3 94 Salerno 47 73

Catania 2 103 Comiso 67 84Comiso 1 111 Catania 66 84

Greece

Thessaloniki 1 105 Kozani 87 137

Heraklion 1 116 Sitia 107 102

Kastoria 2 85 Kozani 52 68

PolandGdask 2 65 Gdynia 37 32

Rzeszw 0 152 Lublin 138 155

EstoniaTallinn 0 131 Helsinki 124 109

Tartu 0 174 Tallinn 160 189

T a

b l e 3


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36Observations

Planning of investmentsin airport infrastructuresgenerally not coordinatedat national level

60The Court examined the robustness ofthe long-term strategies on airport de-velopments of the five member statesvisited checking whether there wasa strategic framework for a coherentdevelopment of all airports within itsterritory based upon the identificationof needs.

61The Court found that at the time thedecisions were taken on the main air-port investments in the audit sample,only one of the five Member Stateshad a long-term strategic vision: inPoland there was an Airports Develop-ment Programme with a list of airportinfrastructure investments deemednecessary.

62There was no strategic long-term air-port development plan in Spain, Italy,Greece or Estonia. These countries hadgeneral and long-term plans encom-passing all modes of transport which,however: (i) had no particular focuson either air travel or airport develop-ment, and (ii) were not coordinatedwith developments in other transportmodes which could potentially com-pete with air traffic.

63Master plans usually existed for in-dividual airports and described theirgeographical and economic context.However, only 11 of the 20 airports(Badajoz, Burgos, Fuerteventura, LaPalma, Madrid-Barajas, Murcia, Vigo,Catania, Heraklion, Thessaloniki andKastoria) included a needs assessmentfor additional infrastructure invest-ments for the airport in their plans.

64The objectives set for the auditedairport projects were usually neitherquantified nor time-scaled. Theytended to be expressed in terms ofconstruction outputs, such as: to buildan airport for 400 000 passengersper year, or to increase the level ofservice to passengers and improveinfrastructures. Once the projectswere implemented, the Member Stateauthorities checked the outputs butdid not usually check whether, or towhat extent, the project objectiveshad been achieved.

65The indicators used to measure projectsuccess tended to be physical outputindicators and the number of jobs cre-ated during construction. In the fewcases where there were results indica-tors, they were either not sufficientlyspecific or they lacked a baseline ora stipulation as to how and when theirachievement should be measured.Sometimes, project data were ag-gregated with other projects makingit impossible to measure ex-post theachievement of individual project ob- jectives39. As a result, the managementand monitoring systems in MemberStates usually only compared achievedoutputs using physical indicators.

39 For example, the indicatorexpected growth in domesticpassenger numbers for the2007-2013 projects at Tartuairport does not allow analysisof airport passenger growth asairport passenger numbersare included with ferrypassenger numbers.


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37Observations

Limited informationavailable to theCommission onEU-funding of airports

66The way the shared managementreporting system worked in the 2000-2006 period meant that informationon ERDF infrastructure projects inEU airports was not available to theCommission until the closure of theOperational Programme (at the end of2009 at the earliest). There should havebeen an improvement for the 2007-2013 multi-annual financing periodas Managing Authorities were sup-posed to publish information on suchprojects on their website. However,there is still no full overview of airportinfrastructure projects financed by theERDF and CF.

67This situation prevents the Commis-sion from having a complete pictureof all EU investments going to airportsand limits its possibilities for moni-toring and ensuring that policies areproperly designed and implemented.


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38Conclusions andrecommendations

68The overall conclusion is that theEU-funded investments in airports pro-duced poor value for money: too manyairports (which were often in closeproximity to each other) were fundedand in many cases the EU-fundedinfrastructures were oversized.

69In particular, the Court found that: a need for the EU-funded invest-

ments in airport infrastructurecould be demonstrated for aroundhalf of the projects examined(based on a benchmarking withcomparable airports, paragraphs22 to 26);

there were delays in constructionand the f inal delivery of airportinfrastructures in 17 and cost over-runs in 9 of the 20 airports exam-ined (paragraph 27);

more than half of the newly built(or upgraded) infrastructures werenot fully used. In some cases, thiswas even so at peak hours (para-graphs 28 to 35).

70The Court also observes that theEU-funding was not cost-effectiveand that seven of the 20 airportsexamined are not profitable and, asa result, there is the risk that they mayneed to be closed unless they receivecontinuous public financial support.This is particularly the case with smallregional airports having fewer than100 000 passengers per year (para-graphs 36 to 48).

71Moreover, the EU-funded investmentsdid not always lead to anticipatedresults: actual passenger numbers fellsignificantly short of initial forecastsand only 10 of the 20 airports suc-ceeded in increasing their passengernumbers between 2007 and 2013.Improvements in customer servicewere in most cases not measured andtherefore difficult to assess (para-graphs 49 to 52).

Recommendation 1

The Court recommends that the Com-mission should ensure during the2014-2020 programme period thatMember States only allocate EU fund-ing to airport infrastructures in thoseairports which are financially viableand for which investment needs hadbeen properly assessed and demon-strated. This should be part of theapproval and monitoring of Opera-tional Programmes carried out by theCommission.


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39Conclusions and recommendations

72In many cases EU funding is providedto airports in close proximity to eachother. The Courts analysis showed thatfor 13 of 18 airports examined, signifi-cant overlaps exist with the catchmentareas of neighbouring airports. Thiscan result in overcapacity and is poorvalue for money (paragraphs 53 to 59).Finally, the EU funding of airports isnot well co-ordinated at national leveland,in particular as regards MajorProjects and Cohesion fund Projects, isinsufficiently supervised by the Com-mission. For projects selected by Mem-ber States the Commission generallydoes not know which airports receivefunding, and how much they receive(paragraphs 60 to 67).

Recommendation 2

The Court recommends that theMember States should have coherentregional, national or supranationalplans for airport development to avoidovercapacity, duplication and un-coordinated investments in airportinfrastructures.

This Report was adopted by Chamber II, headed by Mr Henri GRETHEN, Memberof the Court of Auditors, in Luxembourg at its meeting of 12 November 2014.

For the Court of Auditors

Vtor Manuel da SILVA CALDEIRAPresident


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40Annexes

A n n e x

IERDF and CF allocations between 2000 and 2013 for airport infrastructures 1 perMember State (in euro)

Country ERDF + CF(2000 - 2006)ERDF + CF

(2007 - 2013)ERDF + CF

(2000 - 2013)% of totalERDF + CF

1 Spain 390 324 552 295 047 976 685 372 528 23,98 %

2 Poland 0 601 446 388 601 446 388 21,04 %

3 Italy 306 237 009 187 381 345 493 618 354 17,27 %

4 Greece 170 111 813 202 400 000 372 511 813 13,03 %

5 Czech Republic 4 203 169 96 510 469 100 713 638 3,52 %

6 France 44 861 420 50 609 810 95 471 230 3,34 %

7 Latvia 16 562 376 78 500 000 95 062 376 3,33 %

8 Estonia 54 973 097 12 526 683 67 499 780 2,36 %

9 Lithuania 11 388 469 48 066 024 59 454 493 2,08 %

10 Portugal 13 820 420 40 959 745 54 780 165 1,92 %

11 United Kingdom 30 703 979 23 000 000 53 703 979 1,88 %

12 Bulgaria (ISPA) 45 000 000 0 45 000 000 1,57 %

13 Romania 0 41 061 301 41 061 301 1,44 %

14 Slovenia 0 28 700 000 28 700 000 1,00 %15 EU cross-bordercooperation 13 789 117 14 007 318 27 796 435 0,97 %

16 Hungary 15 516 000 0 15 516 000 0,54 %

17 EU Interregionalcooperation 6 060 967 6 060 967 0,21 %

18 Germany 5 341 238 490 000 5 831 238 0,20 %

19 Slovakia 4 261 687 0 4 261 687 0,15 %

20 Sweden 0 3 347 149 3 347 149 0,12 %

21 Austria 1 317 325 0 1 317 325 0,05 %

Totals 1 134 472 638 1 724 054 208 2 858 526 846 100 %

1 Not including the Cohesion policy funding for technologies and multimodal investments, estimated to be around 1,2 billion euro.


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41Annexes

A n n e x

I I List of airports and projects audited

Country AirportEU-funds

for projectsaudited

Start date(mainworks)

End date(mainworks)

AuditedTermi-

nals (EUfunding)

Auditedaprons

(EUfunding)

AuditedTaxiways

(EUfunding)

AuditedRunways

(EUfunding)

AuditedSafety and

controltower

systems (EUfunding)

Other(eg APM,cargo, carpark) (EUfunding)

Spain

Badajoz 6 134 779 2008 2010 4 047 417 1 409 190 84 785 593 387

Burgos 191 603 2007 2008 191 603Crdoba 13 468 562 2006 2008 810 855 12 657 707

Fuerteventura 53 695 604 2004 2010 21 358 194 7 549 633 3 464 284 17 463 071 2 631 649 1 228

La Palma 49 764 569 2004 2010 26 315 005 13 661 002 3 435 400 220 835 6 132 3

Madrid 41 043 520 2000 2007 41 043 520

Murcia 20 396 706 2004 2011 2 636 907 2 937 427 2 775 913 12 046 459

Vigo 6 058 451 2006 2009 734 640 2 459 015 2 017 122 847 674

Italy

Alghero 13 278 792 2001 2007 5 179 050 2 338 322 2 482 393 2 192 707 1 086 320

Catania 44 660 578 2002 2006 28 012 093 2 688 203 6 090 574 2 329 754 5 539 954

Comiso 20 263 062 2004 2010 5 209 079 1 366 465 1 578 057 5 607 996 5 183 279 1 318Crotone 4 736 007 2006 2011 869 283 1 877 056 1 199 550 437 453 352 665

Napels 20 649 583 2000 2009 5 517 072 2 817 663 5 106 493 3 124 613 4 083 742

Greece

Thessaloniki 54 054 434 2001 2009 11 779 105 1 524 912 23 908 629 16 841 7

Heraklion 9 240 605 2001 2005 9 240 605

Kastoria 5 635 060 1999 2003 5 635 060

PolandGdask 13 732 481 2007 2012 1 401 465 5 594 565 6 736 451

Rzeszw 18 597 944 2009 2013 15 686 246 2 090 980 820 718

EstoniaTallinn 53 093 520 2005 2008 29 212 175 10 308 691 10 665 438 288 579 2 618 6

Tartu 11 805 499 2008 2012 1 067 256 776 027 776 027 776 027 8 410 162Population

audited460 501 359 164 227 220 50 988 499 39 594 288 80 590 629 34 681 200 90 419 523

In % 35,66 % 11,07 % 8,60 % 17,50 % 7,53 % 19,64 %


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42Annexes

A n n e x

I I I

Overview of audit results and assessment 1

Country Airport

Was theinvest-mentwell

planned?

Were thephysicaloutputs

achieved?

Were theinvest-ments

needed?

Are alloutputsbeingused?

Were expect-ed quantita-tive resultsbetween

2007 and 2013achieved?

Werequalita-

tivebenets

achieved?

Was anyimpact onregionaleconomy

evidenced?

Is thecost per

additionalpassengerreason-able?

Is thisa sus-

tainableairport?

Spain

Badajoz

BurgosCrdoba

Fuerteventura

La Palma

Madrid-Barajas

Murcia

Vigo

Italy

Alghero

Catania

ComisoCrotone

Napels

Greece

Heraklion

Kastoria

Thessaloniki

PolandGdask

Rzeszw

EstoniaTallinn

Tartu1 See the key on the next page.


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43Annexes

A n n e x

I I I

Was theinvestment

wellplanned?

Were thephysicaloutputs

achieved?

Were theinvestments

needed?

Are alloutputsbeingused?

Were expectedquantitative

resultsbetween

2007 and 2013achieved?

Werequalitativebenets

achieved?

Was anyimpact onregionaleconomy

evidenced?

Is thecost per

additionalpassengerreasonable?

Is this a sus-tainableairport?

Greenindicatesa satis-factory

situation:

A long termair sector

plan exists;catchment

area analysisand reliableforecasts arein an airportMaster Plan

Outputs havebeen built as

planned

Evidence ofa proper needs

assessmenthas beenproduced

Co-nanced

infrastruc-tures werebeing usedeffectively

The expectedquantitative im-provements havebeen achieved

The expectedqualitativebenets

have beenevidenced via

passengersurveys

The positiveimpact on

the regionaleconomyhas beenevidenced

The realcost per

additionalpassengeris below20 euro

The airport isprot-making

Orangeindicates anin-betweensituation:

Some ofthe above

indicated ele-ments exist

Outputs havebeen built with

differencescompared

to what wasplanned

There was noevidence that

some of theinvestmentwas needed

Co-nanced

infrastruc-tures were

beingused, butfar belowcapacity

There wereimprovements,but lower thanexpected, or

too early to tell(Comiso)

There werequalitative

benets, eventhough these

were notmeasured

There werestudies onthe impact

on the

regionaleconomywithout

a link to theinvestments

The realcost per

additionalpassenger isbetween 20and 80 euro

The airportis not protmaking but

will be able toget to breakeven withinthe medium

term (7 years),or there are notransparantaccounts (2

Greek airports)

Redindicatesan unsat-isfactorysituation:

None of theseelements

either existor are takeninto account

for the invest-ment decision

(Part of the)outputs

audit des aéroports d'europe. le rapport de la cour des comptes

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