Barcelona airport and the failure of two very Spanish models

Aena manages 46 airports in Spain and passenger security checks are outsourced to three contractors: Eulen handles twenty-one airports, while Prosegur and Ilunion provide the same service in the rest. Back in the day, each of these three companies got one of the three largest airports: Prosegur was given Madrid Barajas (50.4 million passengers), Eulen got Barcelona El Prat (44.1 million) and Ilunion won the contract for Majorca’s airport (26.3 million).

Eulen, Prosegur and Ilunion are all “multiservice” firms. That is, they specialise in providing labour-intensive services that require a fairly unskilled workforce: maintenance and security work, gardening, cleaning services, telesales, logistics, caring for the elderly and so on. Large construction companies in Spain (ACS/Clece, Acciona Multiservicios, Ferrovial Servicios, etc) have rushed into this market.

The industrial action by Eulen’s staff in El Prat airport has prompted some to question whether Aena should outsource its security needs. Indeed, it was annoying when both Aena and its main stakeholder, Spain’s Transport Ministry, tried to shrug off any responsibility in the conflict by claiming that this was a dispute between a supplier and its workforce, as if that relieved them of the duty they have towards their customers. Still, I do not feel that Aena and the ministry’s thoughtless behaviour is a convincing argument against the outsourcing of services because any company should be free to decide how to organise production.

More convincingly, some have argued that the chaos in El Prat proves, once again, that the centralised management of Spain's airports is detrimental to Barcelona’s. While Eulen won the Barcelona contract for €11.5 million a year, Prosegur provides the same service in Madrid for €23 million and Ilunion’s Majorca contract amounts to €10.6 million. This means that, for the same service, Aena pays €0.46 per passenger in Madrid Barajas, €0.26 in Barcelona and €0.40 in Majorca. Since the bulk of the service being paid for with such contracts is man-hours and these contracts are won by means of transparent public tenders, the price gap indicates a mismatch between the actual number of passengers processed through security and the number of staff that Aena demaned in each tender. These days I have read that the number of gates or terminals might account for this mismatch (specifically, Barajas has four terminals, whereas El Prat only two), but this makes no sense: passenger security procedures are unified and whether a certain number of flyers goes through one very large terminal or two smaller ones has little effect overall. There may be factors that have a bearing on costs (seasonality, for instance), but it is hard not to conclude that Aena has put much more pressure on the security contractor and its staff in El Prat than in Barajas. Indeed, the airport chaos in Barcelona has much to do with Spain’s centralised airport management model, one which —as you know— is highly profitable for Aena’s shareholders but is unheard of in Europe.

The second model which Aena’s chaos puts into question is that of the low-cost economy that has prevailed in Spain since the 1975-85 industrial crisis. The model is based on specialising in unskilled sectors whilst cutting wages, with multi-service companies taking the lead. The first pillar of the model was laid with the 1984 employment reform espoused by the PSOE administration, which meant that most work contracts thereafter have been temporary. The latest contribution was the 2012 PP reform, whereby in-company collective bargaining prevails over sector-wide agreements. Eulen’s collective bargaining agreement is substantially cheaper than the general conditions that apply to the private security industry in Spain. For instance, the former stipulates 1,826 working hours per year, whereas the latter only 1,782. As for wages, an Eulen “operational service manager” earns fourteen payments of €765.40 while the sector-wide agreement establishes that a “security guard” is entitled to fifteen payments of €1,122.70 per annum.

Needless to say, Aena’s shareholders benefit more from Eulen’s in-house collective bargaining. Likewise, having its own specific agreement allows Eulen and other firms to drive the industry’s small and medium-sized businesses out of the game. However, the chaos in El Prat has exposed the limitations of achieving competitiveness through such means. Firstly, industry-wide collective bargaining agreements compel companies to increase their productivity, while salary cuts merely provide an veneer of competitiveness. Furthermore, industry-wide collective bargaining agreements are a firewall against social conflict, precisely the sort that El Prat is currently mired in.

One of the tolls we are currently paying in El Prat stems from trying to cheat our way into being a European country.

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