German Fraport will impose an extra fee of 13 euro on every ticket for flights using the fourteen regional airport the German company acquired
The charge was included in the terms of the concessions agreement signed between the Greek State and Fraport, daily Ta NEA notes.
The extra charge will affect flight from and to the regional airports of Aktio, Kavala, Thessaloniki, Kerkyra, Chania, Kefalonia, Kos, Mytilene, Mykonos, Rhodes, Samos, Santorini, Skiathos and Zakynthos.
Consequently the packages for tourists will rise up for the return ticket using these airports. After four years, the fee will rise further up.
The Ministers of Transport Christos Spirtzis and Finance Euclid Tsakalotos signed a joint ministerial decision last outlining the technical details on the charge.
According to the agreement, the charge can be maintained for about 4 years, during which the German company must carry out investments in the 14 regional airports worth €330.
After the investment have been completed, the German company can increase this ticket charge up to 18 euros.
The fee will be collected by the airlines and will be transferred to Fraport on monthly basis, if the airline operates a regular flight and ad hoc if the flight is charter.
According to ProtoThema, the level of charges in the regional airports is currently 12 euros for passengers traveling within the Schengen area, while for some destinations outside the Schengen the fee reaches 22 euro.
The fee has the bidding name “Fee for airport modernization and development.”
Joint venture German Fraport – Greek Sientel (Kopelouzos) won the bid for the privatization of 14 regional airports in August 2015.
The way for the privatization of the regional airports was paved by Samaras government under lenders’ pressure. left-wing government SYRIZa had initially some objections to the deal but it had to bow to creditors’ demands, the deal was sealed beginning of 2016.
BTW another provision including in the ministerial decree is the airlines will have to keep detailed records of their passengers and that the Civil Aviation Authority will have access to this data at any time.
But I think this has to do more with security than with controlling the fee payments.
UPDATE:
Greek privatization fund TAIPED said that “Airport charges per passenger will be reduced at the 14 airports and not increase.
As all media reported of FRAPORT and Free Hikes, TAIPED said in response to these reports that
the average charge at state-operated Greek airports today amounts to 12.70 euros per departing passenger. The maximum airport charge per passenger provided by the concession contract with the consortium amounts to 13 euros per passenger, including the charge for the modernization and development of airports (TEAA). It could rise to 18.50 euros once the airport investments are completed.
At present, passengers on flights heading outside the European Union pay a charge of 22 euros, and those within the EU pay 12 euros each. TAIPED announced this will be immediately reduced to a flat rate of 12 euros for every flight, applying to departures from all Greek airports up until October 2024, before dropping to 3 euros from November 1, 2024.
PS price hikes are among the so-called “nice things” of privatization…
As i keep explaining to neoliberal dunderheads (some of whom read this blog), the principal impact of privatisations is to raise prices for consumers at the same time as the taxpayer paying for subsidies on ventures that are not market-sustainable.
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There is one big exception to this rule — and one that the neoliberal right harp on about incessantly — which is the earliest privatisation of the UK telecommunciations division of the Post Office (British Telecom, now). This appeared to have a positive benefit for consumers, since prices came down, services improved and investment also increased. Howwver, it was a sleight of hand by Thatcher. There are two basic reasons: first, the expensive international phone calls prior to digitisation were used to cross-subsidise telegrams and parcels (telegrams were abolished and parcels became suddenly expensive to post).Secondly, the new digital era of telecommunications brought down prices massively, especially for international and long-distance calls. With these two tricks, the extreme right wing government of Thatcher managed to fool people into believing that privatisations were in the interests of ordinary people.
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Subsequently, everyone has seen that the principal effect is to increase prices — affecting the poor most of all. This is because when state services are financed, they are paid for from a tax base that is progressive (i.e. the rich pay proportionately more in tax). When services are paid mainly by the end-user, the cost is primarily borne by that person. The other reason that privatised services cost more is quite simply that commercial companies need to make profits — as big as possible — to keep their shareholders happy. State companies do not make profits (although they may have inefficiencies that waste resources). Overall, private companies are more costly for poorer consumers than reasonably managed state companies: of course, they are also cheaper for the rich to use, as well as the possibility that those same rich consumers are investors in the company, thus clawing back a share of the profits.
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I wonder why rich people are so enthusiastic about privatisation?
Good analysis (especially about the so-called success of privatisation for telecommunication). Now, I’m going to sit back and revel in the various choruses of the Ode to the Market and the Death to Left Wing Anarcho-Socialists Lovers of Planned Economies sung from the Neoliberal hymnbook by our friend Syrizee and Co.
at least, the OTE customer care is better since the privatization. but competition … well… prices are more or less the same for full packages
Yes, but they maintain the bad practices of the old OTE. Many years ago, I quit OTE in disgust at the high cost of their ISDN lines. We had already had a disagreement about internet charges sent to me when I had no phone line — which they thought perfectly reasonable. So I walked out. They carried on sending me bills for YEARS afterward, claiming that my cancellation of the contract was invalid because I owed them about 100 euros.
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Now, when I returned to Greece (via UK) I tried to get an OTE line. They presented me with a bill of 800 euros, of which all but 100 or so euros is in their imagination! I had been advised in 2011 that I should take a lawyer to make sure that the contract with them was terminated. I refuse to waste my money on such nonsense.
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Of course, this disgusting behaviour of the public sector is what encourages many people to think that privatisation will improve things. Sadly, it’s just not true — although they may dress things up a little differently.
Thanks! My years of studying and lecturing economics in the UK were not a complete waste of time (I was always very cynical about the stupid theories, and taught my students such).
A step closer to revolution you’d have taught them about American Hardcore Punk as in the early 80ies worldwide every punk knew about Reaganomics from the lyrics the Americans and Canadians were teaching, today everything is Reaganomics – supported by all political parties that found their perfect crime in a thing they call democracy, no matter if they sit on the right or on the left of their bordello their slaves can vote’em in.
I don’t think I would have been allowed to include such things in “Applied Economics” or “European Economic History” — the two main economics courses I taught.
Why not be tricky, I know language-teachers that were taking the 2nd XTC-album as a lesson cuz the album cover was completely covered with words explaining that “this is a record-cover…” and sure a turntable was part of the lesson with infecting the whole class.
The funny thing today is that if there would be a European league of great bands in Punkrock-Hardcore Greece would be leading against a country like Austria with 50 against one, against Germoney 50 against 4 and playing the finals since years against bands from Italy – alone Milan would beat Austria 40-1, no wonder they don’t get gigs there – but unlike the eighties most South-European bands get no chance to play abroad because of too many fake-bands cloning the eighties, kinda pleasure leftists style.
Also, it nowadays costs telecom companies almost nothing to provide phone calls to their costumers. All the investments in the network have been paid for so they are cashing in big time. They invest that money in ‘new generation networks’ such a 4 and 5G but phonecalls over the current networks almost costs them nothing.
We live in crazy times. Stock markets everywhere are at all time highs (with a lot of investments by central banks which are often private entities but backed up by the tax payers) while the real economy is struggling.
Socialist economy is not efficient because of resource waste. You just cannot maintain 100% employment. But rogue capitalism is not that efficient either. They just have the advantage that they can print money out of thin air. Backed up by the tax payers who will be on the hook for that situation. It is a ponzi scheme and one day that house of cards will collapse.
As a lesson taught by the war and pre-war-times in the fifties all this stocks-nonsense wasn’t allowed, so money was invested in the real economy, the stocks turnover of one year is today made Mondays until lunch-break
Correct: read Yanis Varoufakis on “Ponzi Growth” and “Ponzi Austerity” as well (http://yanisvaroufakis.eu)
Thanks for the analysis of the privatisation consequences; I fully agree.
Now, with the 14 airports, we have another dimension as well. I watched a two-hour programme on one of the “resistance” channels (as I call them) on Greek TV, which presented the horrific details of this “privatisation”. According to what I saw there, an infinity of hidden, consequential clauses in the fine text of the contract effectively makes the Greek state pay Fraport rather than the other way round. One aspect of those details (which was, of course, not released before) is the new 13 euros assault on passengers.
It is for those reasons that the airports deal was (correctly as I believe) called “of colonial type” by those opposed to it.
It appears that what we face here is not even a genuine privatisation; just an asset stripping exercise by the German metropolis.
I am prepared to argue (with evidence) that all privatisations are in effect asset-stripping, carried out either by right wing governments opposed in principle to public goods (and determined to reduce taxation levels) or by third world countries being given their economic management instructions by the IMF and others. Greece is obviously in the latter category, although ND probably was not that unhappy to engage in privatisations so long as they did not impact on its political support.
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Of course, you can find very stubborn defence of privatisation as a policy tool by many economists. They always fail to engage in detailed analysis of the aggreggate and micro effects of the policy — choosing to cherry-pick examples (such as the BT one I mentioned). The problem is in countries where the state sector has badly mis-managed public enterprises. There is some support for privatisation as a panacea for former mismanagement and corruption. My response to this line of reasoning is that there is not such a large distance between the quality of management of the public and private sectors, nor of corruption in the two, and they are also intimately linked in less developed economies such as Greece. The underlying problems of the public sector have to be attacked directly, and not using this indirect technique of downsizing the state sector and all of the undesirable consequences that are certain to arise.
Privatization…and price hikes? Who would have though!? Next I suppose we will have to reduce their tax burden so that they can continue to serve the destinations they’re supposed to serve and charge us extra for the service (but we’re doing that already, so…).
This was in the forecast and I think it was also published by people who were in opposition against the deal but you don’t need to use most of these airports, a campaign which explains how to use alternatives like Athens, Iraklio, Kalamata, Paros(!) etc would make Frankfurt Subways uncompetitive as with less passengers their fees must increase.
What friends of Greece in Europe can do is explain it to travel-agencies and create boycott-posters and -stickers.
Anyway this will be a disaster for Frankfurt as they didn’t recognize that beside Paros another new airport will open up in Kastelli, so at least the Cyclades and Crete will make minus.
Kalinichta Fraport
“All your basis are belong to us”. So in Schengen the fee is 12 Euro while outside it is 22 Euro. Fraport eventually will settle down to 18 Euro. So that is a whopping 50% more than the 12 Euro elsewhere in the EU. Their investment will be €330 (?…= million I assume). Does anybody have figures on the amount of passengers make use of the regional airports in Greece? With respectively 13 and 18 Euro it will take them 25 million and 18 million paying passengers to break even in their investment. (Rough calculation. 13 Euro they can charge for 4 fours and after that they can raise it to 18). Then they will cash in.
And this is how it all begins. Everything privatized. Cherry on the cake of course the privatization of water. Water companies can’t wait to get their hands on this in Europe. All over Europe.
I have no exact numbers but they are high enough to make it sound like an ugly joke to call them “regio”-airports – let’s say it’s 20 million of 25 million passengers – also these “investments” must be joke because many of these airports were already modernized with taxpayers money, so the “investments” will be advertisements and other nice connections to Lufthansa and TUI owned hotel-chains, with Anti-Greek All-Inclusive-bullshit and all the other bumfuck that will bring the money out of Greece, like German unemployed working for them on Greek islands and to make it even better the privatization of water in Germoney is already history and rolled back.
If that is 20 or 25 million passengers per year passing through these regional airports (among which are a few big ones) then their investments at a yearly fee of 13 Euro per flight pays off in one year…Sounds like win-win-win for them. And as you mentioned, what exactly will be their investment? It is not like these airports are some holes in the ground. If they already were modernized then their investment will be minimum.