Slot allocation at Community airports

1. Slot allocation at Community airports Infrastructures and Airports Unit Klaas Pel

3. Content • Evaluation of the slots Regulation • Commercial slot allocation mechanisms: • Problem definition • Commission objectives • Policy options • Next steps

4. 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

5. 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

6. 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

7. 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

8. Problem definition (2) • 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

9. Commission objectives • Overall objective: optimal and economically most efficient use of slots at coordinated Community airports, while maximising potential for competition • Specific targets: • To ensure more economically efficient use of the available slots • To strengthen competition at Community airports • To match secondary trading with overall EU air transport policy • To maintain compatibility with world-wide procedures

10. Policy options • Status quo/ non-regulatory option • Secondary trading in combination with primary trading mechanisms • Secondary trading • Secondary trading with tailored competition law measures

11. 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