Europe Clears the Way for Airport Slot Trading

 - November 12, 2012, 11:55 AM
Airlines are going to be pushed harder to use or lose slots at European airports, but they will at least have the option to buy and sell them in the process. (Photo: Munich Airport)

The European Parliament’s transport and tourism committee has cleared the way for airlines to start trading slots at European Union airports by endorsing new rules aimed at forcing carriers to use or lose slots. But the European Commission (EC) has expressed concern that both the legislators and EU transport ministers have diluted its reform plan by rejecting its proposal that airlines should lose a slot if they fail to use it at least 85 percent of the time (an increase from the existing 80 percent requirement). The parliamentary committee also voted to include additional provisions giving the independent airport coordinator more power to enforce competition for slots and to prevent the rule from handicapping regional airlines and airports. Airlines will face financial penalties if they fail to relinquish unused slots under the proposed new rules, still subject to a full vote in the European Parliament expected in December.

According to Graham Pickett, head of travel, hospitality and leisure at accountancy group Deloitte, the EC’s plan to allow trading in slots could alleviate airport congestion in Europe. “While it may not solve the capacity problem entirely, it will ease the burden until longer-term solutions around infrastructure are agreed,” he said. “In the absence of additional capacity, slot prices will increase and lead to higher ticket prices, potentially hitting tourism and wider economic growth.”

The transport committee also rejected an EC proposal to further deregulate the ground handling market by increasing the minimum number of independent handlers from two to three at EU airports whose passenger throughput totals more than five million per year.

Meanwhile, credit rating agency Standard & Poor’s warned on November 6 that Europe’s airports will continue to struggle due to prolonged recession and weakening airline profits. In the same week, Europe’s largest low-cost airlines announced mixed results for October 2012. Ryanair saw October load factors dip year-over-year by 2 percent, to 82 percent, but overall passenger numbers rose 4 percent, to 7.54 million. Rival Easyjet achieved a 0.4 percent boost in load factors, to 88.8 percent, and traffic increased by 6.2 percent to 5.2 million. According to the most recent data from the International Air Transport Association, Europe’s airlines suffer from “profitless growth” as they battle to manage high costs and taxes. In September this year, European operators achieved average passenger growth of 5.4 percent compared with the same month last year and load factors increased 1.5 points, to 83.9 percent.