Airlines await slots edict

Jacques Barrot, the European commissioner for transport, will next month (13 November) clarify rules governing the trade in take-off and landing slots for Europe’s increasingly congested airports.

His declaration is keenly awaited as airlines jockey for position at European airports ahead of the entry into force next year of the EU-US open skies agreement.

The EU slots market is for the most part static, with scarcely any room at major hubs for airlines wanting to enter the market to establish operations. Under ‘grandfathering’ rules in the 1993 slots directive, major airlines are allowed to retain slots that have been used for at least 80% of the previous season. Underused slots are pooled for re-distribution among new entrants or airlines on waiting lists in a process known as primary allocation.

The trading of slots between airlines, a practice known as secondary trading, remains a grey area under the 1993 rules. Slots at busy airports such as Heathrow tend to be exchanged behind closed doors, with little regulatory oversight of deals. Barrot’s communication is expected to formalise the practice, while trying to encourage greater market transparency.

"The Commission should make sure we regulate those airports which are congested, the Heathrows, the Charles de Gaulles, the Frankfurts, the Amsterdams of this world," said UK Socialist MEP Brian Simpson, a member of the European Parliament’s transport and tourism committee. He said that more transparency was needed in both the primary allocation and secondary trading markets. Vested interests, he said, preferred to sell slots at a profit rather than surrender them for re-distribution.

The EU-US open skies deal, which enters into force in March next year, has made the need for a transparent solution all the more urgent. Simpson questioned the legitimacy of this month’s joint-venture deal between Air France and US carrier Delta Air Lines, which could lead to collaboration on transatlantic routes to and from the UK’s Heathrow Airport as of next year. "Can Air France be allowed to pass on slots to Delta or do slots have to be put into the pot?" asked Simpson. The firms will compete head-to-head on transatlantic flights with British Airways, which holds about 40% of available slots at Heathrow.

Heathrow slots are in high demand in the run up to open skies. The large numbers of business and first-class passengers flying between the London-based airport and the US could mean bumper profits for companies. The market for transatlantic flights to and from Heathrow has hitherto been restricted to four airlines - BA, Virgin, United and American - under a 1997 EU-US agreement.

Koen Vermeir, director of aeropolitical and industry affairs at the International Air Carrier Association, an industry lobby, said: "The Commission recognises that certain practices already exist. Then come the questions: is this legal, is this allowed, is it normal that it happens behind closed doors?"

Anthony Concil, of the International Air Transport Association, said that the Commission’s prime concern should be increasing capacity rather than slot trading. "You can slice a cake into smaller and smaller pieces but it doesn’t change the size of the cake. The real solution is to build and create new capacity," he said.

MEPs called last week (11 October) on the Commission to draw up an EU ‘masterplan’ for increasing airport capacity. Danish Liberal MEP Anne Jensen warned that demand for flights will be 2.5 times higher in 2025 than it was in 2003. Barrot agreed to come up with a plan that would complement existing proposals contained in last year’s airport package.

According to a report issued in August by the UK-based research firm Oxera, improvements to both airport capacity and slot trading will be needed if the EU-US open skies deal is to produce results. "Although the sky may have been opened, there is still the physical restriction of limited capacity on the ground," said the report.

Jacques Barrot, the European commissioner for transport, will next month (13 November) clarify rules governing the trade in take-off and landing slots for Europe’s increasingly congested airports.

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