Airport slot sale plans grounded

Date: 13/11/1997

By Chris Johnstone

PROPOSALS to allow the sale of landing and take-off slots at Europe's biggest airports have been taken off the agenda until the end of the year to avoid confusion as the European Commission considers its stance on transatlantic airline alliances.

The move comes amid fears that confused signals would be sent if, on the one hand, the Commission were to sanction the under-the-table practice of selling slots as proposed by Transport Commissioner Neil Kinnock and, on the other, demand that British Airways and American Airlines (BA/AA) give away slots at Heathrow and Gatwick airports as the price for getting their alliance cleared.

Competition Commissioner Karel van Miert has suggested that BA and AA offload around 350 attractive slots in London - with some leeway on this figure if more free slots can be found by capacity coordinators at the airports. However, coordinators say few spare peak-time slots look likely to become available.

Although the two issues are separate, Kinnock and Van Miert have agreed to deal with them at the same time in December when the Commission gives its first assessment of a raft of airline alliances. These should include BA/AA; the alliance between Delta Airlines, Sabena and Swissair; and that between SAS, Lufthansa and United Airlines.

Kinnock and Van Miert, a former Commissioner for transport, have clashed on the question of whether airlines should be given the right to sell slots, a practice which is already allowed in the US.

Van Miert maintains that airlines should not be permitted to sell something which does not belong to them and which should be regarded as a public resource. But Kinnock's aides justify a limited sale of airport slots by arguing that they are a worthless resource in the hands of anyone but airlines. They say new rules should include safeguards against smaller airlines being priced out of the market if the buying and selling of slots goes ahead, by making sure they are given a greater share of spare slots.

This last aspect of the proposed slots shake-up has riled Europe's biggest airlines, which claim an already discriminatory system in favour of smaller, newcomer airlines would be exacerbated by such changes.

"For competition to work properly, airlines must have a well-functioning hub-and-spoke operation and that means access to available slots," said a spokesman for the Association of European Airlines (AEA).

Europe's biggest airlines are divided over the issue. Some, such as Lufthansa, are cautious about any changes to the current regime which, they say, works well enough. But others, such as Virgin boss Richard Branson, have come out unreservedly in favour of the buying and selling of slots.