New law burdens airports

Poland's new air transportation law hurts airport operators in at least two places, forcing them to bank roll the costs of border guards at their airports and confirming property taxes on runways and adjacent land, industry sources said following the law's passage in the Sejm last Friday. The act creates the legal framework for Poland's aviation industry. It still requires approval in the Senate and President Aleksander Kwaśniewski's signature. The financial burdens may push some cash-strapped operators into the red, industry sources said. "If there are no funds guaranteed to finance the border guard, we will send a letter to the infrastructure minister saying that we're giving up international flights," said Czesław Jarosz, president of Poland's second-busiest airport, Kraków-Balice. Jarosz said he expected the Sejm to uphold the current regulations, under which the border guards were paid by the state budget.

"We would welcome this solution, particularly as we have problems with financing our own investment plans," Jarosz said. Kraków-Balice recorded a loss during the fiscal half year ending March 2002 and Jarosz said he needed zł. 7 million ($1.75 million) this year to implement planned investment. With the new regulation, the government is hurting its own enterprises, as all international airport operators in Poland are either entirely owned by the Treasury Ministry or co-owned with local governments. "This is an attempt to dump the costs from the border guard and the customs offices onto commercial companies," said Włodzimierz Machczyński, president of Gdańsk-Trójmiasto airport. "This is not acceptable, because governmental bodies must be financed by the state budget." The resulting costs are difficult to predict because the airport operators will have little control over the border guards' expenditures, Machczyński said.

Taxing rules The costs of the border guard will add a new burden to the books of airport operators, who, for the past two years, have struggled with new regulations that impose a property tax on runways and taxiways. These ways and the adjacent land are public infrastructure elements and should, like roads, be exempt from the property tax, according to airport operators and some MPs. "Such airport elements as terminals or parking lots should be considered as commercial elements but runways should not," Maniura said. The tax is wreaking havoc with Gdańsk-Trójmiasto airport's finances, more than halving the company's profit last year to zł. 600,000 from zł. 1.4 million ($350,000), Machczyński said. MPs proposed an amendment to the bill to change this regulation but it fell through.