EU to allow sale of airport slots

6.5.2008   (Euractiv)

The European Commission has adopted a document that opens the door for airlines
to trade take-off and landing slots among themselves for the first time, in a
bid to overcome growing capacity constraints in Europe’s crowded airports.


Take-off and landing slots at airports have become a scarce commodity in Europe
as demand for air travel continues to boom.  

The current EU Slot Allocation Regulation of 1993 enshrines the so-called “grandfathering
rights” system whereby an airline that has been allocated a slot is entitled to
hold on to it forever, so long as it uses it regularly.  

But the system has been criticised for keeping new market entrants out and for
being inefficient – thereby contributing to the looming capacity crunch at European

The review complements Commission initiatives to increase airport capacity and
to better regulate relations between airports and carriers (EurActiv 24/01/07).  

The  Communication
, adopted on 30 April, finds that existing EU legislation on airport slot allocation
does not prohibit so-called “secondary slot trading,” bringing an end to years
of discussion.  

“Today we are recognising for the first time that secondary trading is an acceptable
way of allowing slots to be swapped among airlines,” said EU Transport Commissioner
Jacques Barrot.  

Previous legislation only allows for slots to be exchanged “one for one between
air carriers,” “without monetary compensation”. But the vagueness of the rules
has enabled certain airports, such as London’s Heathrow – one of the most congested
in the world – to put in place a sort of “grey market” for secondary slot trading.  

While the situation has thus far given rise to a series of complaints and legal
proceedings, “the Commission does not intend to pursue infringement procedures
against member states where such exchanges take place in a transparent manner,”
according to the new Communication.

Indeed, the Commission  believes that  prohibiting  such secondary trading causes
the number of slots available to new entrants –  and to incumbent air carriers
seeking to extend their services –  to be lower than it could be. “An air carrier
may retain a slot even when its market value far exceeds the value that the air
carrier generates from retaining and using the slots,” it explains.  


“At crowded airports, we need to make sure that slots are used as efficiently
as possible and that airlines have a fair chance to develop their operations […]
This system has already shown its value in London, where it has allowed a range
of airlines to take advantage of the opportunities provided by the EU-US aviation
agreement and to create new levels of competition,” said  EU Transport Commissioner Jacques Barrot.  

European airports, represented by Airports Council International – Europe, agree that secondary
trading can be “beneficial to improve the efficient use of airport capacity” and
say part of the proceeds from slot trading should be set aside towards the development
of new airport capacity.  

But  airlines are not convinced that the change in rules will help to address the congestion
problems faced by a number of European airports. “Recourse to market mechanisms
such as slot allocation to make better use of existing airport capacity would
not address infrastructure shortages, as such a mechanism would not create a single
additional slot […] The main problem lies with airport capacity,” says the Association
for European Airlines in a previous statement.  

What’s more,  regional carriers warn that “putting a price on slots creates a risk that they will be viewed
as a more valuable asset than the service provided to a particular destination
or region. Regions may also lose out if an airline wishing to serve a route cannot
afford to buy a slot which it might have been allocated under the existing regulation,”
claims the European Regions Airline Association (ERA).  

Nevertheless, according to Sunday’s  Corriere della Sera, the new rules could help out the failing  Italian airline Alitalia. Indeed, the new rules would allow the carrier it to sell-off some of its prized
slots in order to keep afloat, without having recourse to the €300 million “bridging
loan” granted last week by the Italian Government. The Commission has already
announced it will investigate the loan, which it believes could  constitute illegal
state aid (EurActiv 25/04/08).  



EU to allow sale of airport slots