EU freezes airline take-off slot rules

Date added: 8 May, 2009

8.5.2009   (Reuters)

By Pete Harrison

BRUSSELS, May 7 (Reuters) – Airlines hit by the economic slowdown will gain new flexibility in how they use
take-off and landing slots after the European Union assembly agreed on Thursday
to loosen “use-or-lose rules”.

The decision was the last step in a process that protects traditional carriers
like British Airways (BAY.L) but has angered airports and budget airlines like Britain’s easyJet (EZJ.L).

Current rules force airlines to use the time slots at busy airports at least
80% of the time or face losing them the following season, but some big airlines
argue this obliges them to keep flying even when it is uneconomical.

“Having to permanently give up a slot is an extreme option which the airlines
will avoid if they can,” said Ulrich Schulte-Strathaus, secretary general of the
Association of European Airlines (AEA).

“But flying nearly empty to protect slots is neither economically nor environmentally
responsible,” he added.  

Air carriers will be entitled to the same series of slots during the summer 2010
season as were allocated in 2009, regardless of how much they use them, the European Parliament agreed, with 508 votes in favour and 20 against.

Airlines have been hit hard by the global economic slowdown, with some forecasting
a 5 percent dip in traffic in 2009.

“Right now, we cannot predict how long this current downturn will continue,”
said the AEA’s Schulte-Strathaus. “We have nothing to benchmark it against —
it has already exceeded in severity any past economic upheavals in our industry.”

Budget airlines say the proposed freeze will prevent the proper functioning of
a market precisely when it should punish high-cost carriers.

“This a measure designed purely to help some ailing dinosaur airlines,” said
an easyJet spokesman. “There are other airlines waiting to take their place. It
is discrimination against efficient airlines like easyJet and counterproductive
to the aim of easing the recession.”

Airport body ACI Europe said the move would hurt airports by constraining revenues
in the midst of the crisis.

“Unlike airlines which have the flexibility to ground aircraft or cut routes
and capacity at short notice to save costs, airports are bound by significant
long term financial commitments linked to the development of their infrastructure,”
said ACI director general Olivier Jankovec. (Reporting by Pete Harrison; Editing
by Richard Hubbard)

http://uk.reuters.com/article/UK_SMALLCAPSRPT/idUKL719782620090507

Posted: Friday, May 8th, 2009. Filed in General News.