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Mon, Jul 12, 2004 - Page 12 News List

Airports risk bruising battle with airlines over terminals

CHEAPER AND FASTER Airports are moving away from offering luxury lounges with gold-plated services, and embracing the practices of discount air carriers


After offering prestige terminals, business lounges, and air-conditioned gangways, airports are now risking a bruising battle with big airlines to offer cheaper terminals with a flavor of the spartan heyday of aviation.

Air France on Thursday threatened legal action against Geneva International Airport's pioneering decision to move ahead with a low-fee terminal, where passengers can expect minimalist service and a walk onto the windswept tarmac.

Budget competitors Easyjet and Virgin Express are lining up as the first clients for the cheap terminal late next year, which Singapore and Kuala Lumpur, Malaysia are ready to emulate, industry officials said.

"It's a move away from the gold-plated customer service to just give a passenger an electronic ticket and a seat," Paul Behnke, finance director at the global airport association Airports Council International (ACI) said.

"We see it coming for the future," he said.

After budget airlines eliminated inflight food and creature comforts, Geneva's revamped 1949 charter building is promising a similar approach on the ground and a 40 percent lower passenger handling fee, airport officials said.

Terminal 2 will be open to all airlines as a cheaper alternative to the current terminal and its rolling walkways, transit facilities, luggage belts, bars and shops. Landing and security fees will stay unchanged.

"Passengers will check-in at automatic machines, they will always carry all their luggage including what goes in the hold, take it to the security check and cart. No escalators, no lifts, all the way to the plane without a gangway, whatever the weather," Geneva airport spokesman Philippe Roy said.

Easyjet, whose share of passenger traffic at Geneva has risen to 25 percent since it first flew there six years ago, also pressed the airport to cut costs in recent months, hinting at service reductions.

Instead, a few days after the decision on the low cost terminal, the budget carrier announced a further expansion in the autumn with four new destinations.

"Airport management explained very well how it is trying to satisfy all its customers," Easyjet Switzerland's marketing director Philippe Vignon said.

Although the cheap terminal is being developed with the help of the top airline body, the International Air Transport Association (IATA), Geneva's move prompted a stern response from mainstream carriers including Air France, Lufthansa and Swiss.

"The decision to lower costs is applied in a discriminatory manner and only on part of the platform," Etienne Rachou, Air France chief executive for Europe and North Africa told reporters.

"Air France reserves all possibility of appeal, including legal ones, he added.

An airline lobby group in Switzerland, which includes Swiss International Airlines, welcomed other attempts to rein in fees but underlined "grave consequences that may be generated by Geneva's decision."

IATA said its 250 members -- which do not include most of the budget airlines -- want cuts in ground charges across the board, not only in special dedicated terminals, and claimed airports were earning excessively fat profit margins.

The airlines also demanded the standard passenger service fee should not be used to subsidise the low-cost terminal in Geneva.

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