1 Restructuring of the Value Chain of the European Ground ...

2. The European Council Directive 96/67/EC
Historically, in each country in Europe there has been a national carrier, which
dominated the market and worked closely with the airports. Because of this monopolistic
situation, there were little to no choice for GHS providers on the market. Moreover, airports
had to approve the realization of GHS.
However, after the liberalization of the airline industry, airlines were put under price
pressure, which, in turn, forced them to reduce costs, including GHS costs. Through lobbying
they exercised political pressure to liberalize also the GHS market, and hoped to get lower
prices and better quality as result of competition. Opponents of the market opening were, as
expected, the airports, which wanted to keep their monopoly and the trade unions, who feared
more difficult and less lucrative working conditions for their members. Eventually, the
European Council implemented Directive 96/67/EC, which enforced competition on the
European GHS market, although allowing some exceptions. (see Flohr, 2007) . The main
features are summarized below in Fig. 2.1 We will now look in detail at the developments at
some of the major European airports below.
Figure 2. Aspects of the Directive (see SH&E, 2002, p.10)
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