De Palacio shakes up airline slots

Date: 24/05/01

By Laurence Frost

UNION airports will have independent coordinators with the power to strip airlines of their takeoff and landing rights, under proposals to be tabled next month by Transport Commissioner Loyola de Palacio.

The move is part of a crackdown on carriers which increase congestion by not making full use of the 'slots' given to them at EU airports.

A copy of the draft document seen by European Voice outlaws the buying and selling of the rights and calls for "mandatory national measures imposing fines" on carriers that abuse their slots.

De Palacio could face a new industry backlash over the measures, which would put an end to the practice of exchanging the takeoff and landing rights at a twice-yearly conference organised by the International Air Transport Association (IATA).

The draft regulation bans any transfer of slots between airlines, and spells out that they "do not constitute property rights" but are "allocated as public goods".

The move will anger airlines, which had hoped to see legislation allowing them to trade the rights freely. Major carriers argue that it is their congestion-causing activities that have given the time windows value.

"De Palacio says she wants airline consolidation, but today when an airline buys another airline, one of the main reasons is to get the slots," said one airline executive.

In future, coordinators - the draft does not explain who would appoint them - would allocate the slots by prioritising carriers operating larger aircraft where runway capacity is limited, as is the case at many European airports. The draft rejects a balance of long-haul and short-haul flights, insisting it would introduce "too many conflicting criteria".

Smaller and medium-sized players claim this would damage not only them, but also the hub airports that serve as points of interchange between regional and international flights. "We can't expect all airlines to operate 747s," said Hans Ollongren of SAS. "If a large hub is to function properly for consumers you need big and small aircraft - the big ones need to be fed."

Carriers could also find it harder to bid for routes that are also served by rail services, as part of the Commission's push towards 'intermodal' transport links. The proposal states: "Slot requests for air services on intra-Community routes will be given a low priority where other modes of transport of satisfactory quality exist."

Airlines will be alarmed that they could lose out on flight connections if such 'low priority' cases are not restricted to routes where the airports themselves are served by rail links. "This would work for Brussels to Paris Charles de Gaulle," said Ollongren. "But if you did this for Manchester to London, a train to central London is not going to help passengers who want to connect at Heathrow."

But there will be some relief among large industry players over the draft regulation, which stops significantly short of last year's abortive proposal denying established airlines the right to keep all of their existing slots.

These 'grandfather rights' are preserved under the new measures, which maintain current rules to confiscate a slot only when an airline provides less than 80% of its potential flights.

BMI British Midland's expansion plans now depend on the Commission forcing rival British Airways (BA) to give up slots, the company said yesterday (May 22). Chairman Michael Bishop highlighted routes from Helsinki, urging the EU antitrust authority to demand divestment of slots as a condition for approving BA's membership of the Oneworld alliance including Finnair. "We intend to take over these slots as they become available and bring new competition to these markets," he said.

Union airports will have independent coordinators with the power to strip airlines of their takeoff and landing rights, under proposals to be tabled by Transport Commissioner Loyola de Palacio.