Talks about allocation of slots remain deadlocked

Date: 10/04/1997

By Chris Johnstone

MONTHS of wrangling have failed to break the deadlock within the European Commission over how to shake up its rules for handing out landing and take-off slots at overcrowded airports.

With competition and transport officials still at loggerheads over key issues, the review of current slot allocation rules has been taken off the agenda for next Wednesday's (16 April) meeting of the full Commission.

The move reflects the lack of progress on the half-dozen issues dividing the two Commission directorates-general most directly concerned. “There is no progress to report,” said one official.

At the top of that list is the question of whether airlines should be allowed to buy and sell landing and take-off slots at airports.

Transport Commissioner Neil Kinnock has suggested a major about-turn in policy by legalising the buying and selling of slots, a practice banned under the existing EU code of conduct.

But Competition Commis-sioner Karel van Miert has declared his formal opposition to any such change, arguing that it would erect a cash barrier to small airlines wanting to enter the market.

Kinnock says trade in slots already exists illicitly and bringing it out in the open would allow the practice to be managed in favour of disadvantaged airlines.

Both Commissioners want to give newcomer airlines more opportunities to offer services from crowded airports, but they disagree over how this should be done.

Officials say that, as a result, the slots issue is now unlikely to surface for discussion by the full Commission before June and perhaps as late as July.

Slot allocation has become an even more politically charged issue in light of the proposed link-up between British Airways and American Airlines.

Some Commission officials would like the approach to the alliance to take into consideration what a revised code on slot allocation would look like.

But the question of what linkage, if any, will be made between the slot allocation review and the Commission's handling of the BA/AA alliance has yet to be settled. Legally speaking, the two are distinct dossiers with the Directorate-General for transport (DGVII) responsible for the former and competition (DGIV) for the latter.

Van Miert has warned that BA will have to hand over a considerable share of its coveted slots at London's Heathrow airport to rivals if its alliance with AA is to have any chance of being cleared. BA says it should be able to sell slots, not be forced to give them away.

The Commissioner and the UK government have also clashed over how many slots BA should give up at Heathrow, with the Van Miert denouncing as inadequate London's suggestion that 168 weekly slots would be sufficient to boost competition.

Pressure for a decision on the linkage question has been temporarily eased since no Commission verdict on BA/AA will be given during or in the immediate aftermath of the UK election on 1 May.

One scenario being floated as a basis for compromise between Kinnock and Van Miert would be for a time-limit to be set on an airline's ownership of particular slots.

But this would almost certainly be resisted by the big airlines which hold them and regard them as their property.