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Request for clarification and action concerning competitive distortions in the ground handling market at Palermo and Catania airports

Question écrite de M. Ignazio CORRAO - Commission européenne

Question de M. Ignazio CORRAO,

Diffusée le 27 février 2024

Subject: Request for clarification and action concerning competitive distortions in the ground handling market at Palermo and Catania airports

There is concern about practices that could be undermining free competition in the ground handling market at Palermo Airport Falcone-Borsellino and Catania-Fontanarossa Airport.

In particular, it has come to light that GESAP S.p.A.1, the managing body of Palermo Airport, has a stake in GH Palermo S.p.A.2, a handling company operating at the same airport. This raises questions about a possible breach of the principles of free competition, given the direct relationship between the managing entity and a commercial entity with a significant position in the market.

Moreover, it means that the maintenance of handling facilities at the above-mentioned airports would be controlled under a monopoly regime by an entity linked to GH Palermo S.p.A.3, negatively affecting both the costs and the quality of the service provided by other operators, potentially in breach of free competition.

Given that these practices are likely to be at odds with the principles of competition laid down in Directive 2014/24/EU on public procurement and Regulation (EC) No 1/2003 on restrictive practices, can the Commission answer the following questions:

1. Is it aware of the business practices at Palermo and Catania airports described above and does it consider them to be in line with EU competition rules?

2. Does it plan to verify that ground handling services at those airports are operating in compliance with the principles of competition and the free market?

Submitted:28.2.2024

1 Owns 20% of GH Palermo S.p.A.

2 Holds 80% of the market share and GESAP S.p.A. is present in the corporate structure.

3 GH GROUND SUPPORT EQUIPMENT

Réponse - Commission européenne

Diffusée le 23 avril 2024

Answer given by Executive Vice-President Vestager on behalf of the European Commission (24 April 2024)

The honourable Member alleges infringements of the principles of competition laid down in Directive 2014/24/EU (4) and Regulation (EC) No 1/2003 (5).

Under the Ground handling Directive, Member States must ensure access by suppliers of ground services to the market for the provision of the majority of ground handling services at EU airports whose annual traffic is more than two million passenger movements or 50.000 tonnes of freight (like Catania and Palermo airports). However, for certain services, the Member State has a right to limit the number of suppliers to minimum two.

Under the Ground handling Directive, nothing prevents an airport operator to own a ground handling supplier operating at its airport. However, where the number of service suppliers is limited, at least one of the suppliers must be independent of the managing body of the airport and of the dominant airline at that airport.

The Commission has no information showing that the situation at Catania and Palermo airports may be in breach of the Ground handling Directive.

As regards the public procurement aspects of the honourable Member’s questions, it does not appear from the elements available that the pursuit of ground handling activities by a designated economic operator corresponds to a services concession contract within the meaning of Directive 2014/23/EU (Concession Directive) (6).

It would rather seem a mere authorisation for the pursuit of an economic activity which is not a public contract ( latu sensu) and, therefore would not fall within the scope of this directive.

1 ∙ ⸱ Owns 20% of GH Palermo S.p.A.

2 ∙ ⸱ Holds 80% of the market share and GESAP S.p.A. is present in the corporate structure.

3 ∙ ⸱ GH GROUND SUPPORT EQUIPMENT

4 ∙ ⸱ Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC,

OJ L 94, 28.3.2014, p. 65-242. 5 ∙ ⸱

Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4.1.2003, p. 1-25. 6 ∙ ⸱

Similarly, it seems evident that the authorisation to pursue the activity at issue does not correspond to a public contract within the meaning of Directive 2014/25 (nor Directive 2014/24/EU as indicated in the question).












| | ) Moreover, even if the Concession Directive were to apply to the contracts mentioned, EU public procurement rules do not prevent public buyers from awarding contracts to those companies they partially own, as long as the principles of transparency, fair competition and equal treatment are strictly respected and conflict of interest is avoided.

With respect to Regulation No 1/2003, there are no elements indicating that the referred business practices may constitute a breach of the competition rules in Articles 101 and 102 of the Treaty on the Functioning of the EU.

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