European CommissionEuropean Commission

Slot allocation at Community airports

Infrastructures and Airports Unit

Klaas Pel

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Content

• Evaluation of the slots Regulation

• Commercial slot allocation mechanisms:– Problem definition– Commission objectives– Policy options

• Next steps

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Evaluation of slots Regulation (1)

• Regulation (EC) 793/2004 amending Regulation (EEC) 95/93

• Technical improvements of Regulation (EEC) 95/93

• Review 3 years after entry into force• Focus stakeholder consultation on market access

and enforcement elements• New entrants:

– Reinforcement of definition so air carriers can establish a viable network and competitive critical mass of operations

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Evaluation of slots Regulation (2)

• Enforcement:– Maintaining the integrity of the slot allocation system– Introduction of sanctions and measures to prevent slot

abuse• Role and position of slot coordinator:

– Increased responsibilities and authority to deal with slot abuse

– Unquestionable neutrality and independence• Process of slot allocation:

– Better use of existing capacity whilst maintaining compatibility with IATA scheduling guidelines

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Commercial slot allocation mechanisms

• Ongoing assessment of introduction of commercial slot allocation mechanisms

• Primary allocation:– Higher posted prices– Auctioning of newly created slots– Withdrawal of proportion of slots

• Secondary trading

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Problem definition (1)

• Of the 35 busiest EU airports, 6 are heavily congested, 10 partially congested and 19 uncongested

• Trends at congested airports:– Commercial flights replace general aviation and ad hoc flights – scheduled pax flight replace cargo and charter– Average aircraft size increases– Average flight distance increases

• Expected aggregate yearly growth in slot demand at major EU airports 3.1% between 2005-2025

• By 2025 up to 14 EU airports likely to be saturated for 8-10 hours a day and more than 40 airports unable to handle typical peak hours

• By 2025 Europe will need an additional 6 major airports and 9 medium sized airports

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• New entry at congested airports difficult due to lack of slots or creation of additional capacity

• Airlines not confronted with full opportunity costs of slots they hold• Slots perhaps not allocated in a way that best reflects underlying

demand• Under current regime little incentive for airline to trade slots with

airline that values the slot more highly to utilise it • Under Regulation only exchanges permitted• Need for clear legal basis to ensure slot transfers take place in a non-

discriminatory and transparent way

Problem definition (2)

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Commission objectives

• Overall objective: optimal and economically most efficient use of slots at coordinated Community airports, while maximising potential for competition

• Specific targets:1. To ensure more economically efficient use of the available slots2. To strengthen competition at Community airports3. To match secondary trading with overall EU air transport policy4. To maintain compatibility with world-wide procedures

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Policy options

• Status quo/ non-regulatory option

• Secondary trading in combination with primary trading mechanisms

• Secondary trading

• Secondary trading with tailored competition law measures

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Next steps

• Evaluation of application of Regulation (EC) 793/2004

• Stakeholder hearing on commercial slot allocation mechanisms and on application of Regulation (EC) 793/2004

• Proposal for amendment of slots Regulation• Impact assessment • Adoption proposal for new legislation