Airport slots

Summary:

This paper explains the slot allocation rules in the United Kingdom (UK), across the European Union (EU) and more widely around the world. It examines the effectiveness of the current regime in place in the UK, set within EU rules, and looks at longer term options for reform post-Brexit.

Further information:

The right to take off and land was traditionally allocated on a first-come first-served basis, with scarcely any coordination between airlines and airport management. Demand for air travel has risen significantly in recent decades and, because of the various political, planning and environmental issues, it has not been matched by the supply of additional airport capacity.

Because of the increasing congestion at major airports, particularly those in London and the South East, access to their runways became increasingly difficult to attain. To deal with this, the notion of a ‘slot’ was developed to allocate scarce capacity to competing airlines. The accompanying principles were established internationally and formal regulations introduced in Europe in the early 1990s.

The EU Consolidated Slot Regulation has played a role in facilitating growth in the sector. There is a view that in light of ongoing demand the Regulation is unlikely to be fit for purpose in the coming decades and is in need of reform. But this has been difficult to come by – repeated attempts at revision since the beginning of the twenty-first century have been largely unsuccessful and the most recent proposals stalled in 2012.

The main criticism of the Regulation is that it does not allocate slots to the airlines which value them the most and undermines competition by favouring incumbency. The London airports have, at least partially, overcome this problem by enabling secondary trading for slots, which has proven effective at facilitating slot transfer to those airlines that value them the most. It remains to be seen, in light of the deal the UK obtains post-Brexit whether there is the ability or the appetite for further reform to the slot allocation system in the UK.

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