European Commission Seeks Return to Normal 80:20 Slot Rule

 - August 31, 2022, 1:56 PM
Lufthansa jets line up at Frankfurt International Airport, one of the largest in Europe. (Flickr: Creative Commons (BY) by kitmasterbloke)

The European Commission has proposed a return to the historic 80:20 “use-it-or-lose-it” rule for takeoff and landing slots, a move criticized by legacy and regional airlines as “premature” though welcomed by Europe’s airports. Speaking to members of the European Parliament’s Transport Committee on Wednesday, Filip Cornelis, director for aviation at the European Commission’s director-general for Mobility and Transport (DG Move), noted that the “good recovery” of air traffic and positive outlook warrants ending the temporary relief from the slot utilization rules in the EU and a reversion to the standard 80 percent use rate as of the winter 2022/2023 scheduling period. The EU waived the use-it-or-lose-it rule—which requires airlines to operate slots at least 80 percent of the time to retain the right to use them in the upcoming equivalent season—for the summer 2020 and winter 2020/21 seasons. As traffic gradually recovered, Brussels raised the slot-use rate to 50 percent for the winter 2021/2022 scheduling season and to 64 percent for the current summer 2022 season. 

“Air traffic [in Eurocontrol states] has been above 80 percent of the 2019 level since April and around 88 percent in August,” he said. “Passenger numbers have been growing more or less proportionally and the Eurocontrol forecast, on which we rely, projects the upward trend will continue. It sets traffic at 90 percent of 2019 levels at the start of the winter 2022/2023 scheduling period. This is why we are proposing not to amend the standard 80:20 rules beyond this summer season.”

The commission acknowledges, however, that despite the recovery in the air sector, there remains a large degree of uncertainty. This feeling “is shared by stakeholders across the board,” according to Cornelis. “For example, we don't know how the Covid pandemic will evolve in the coming months, as the winter season is always a risky period…and how the war [in Ukraine] will develop and which impact it will have on aviation.” 

To take that uncertainty into account, the commission is proposing that airlines can continue to benefit from justified non-use of slots (JNUS) exceptions in case public authorities impose sanitary measures that restrict air travel or severely impede passengers’ ability to travel and extend the exception to cover measures imposed in response to all epidemiological situations (not limited to Covid-19), natural disasters, and political unrest. To avoid a haphazard interpretation by the bloc’s national slot coordinators and ensure a more common application of JNUS across the EU, the commission wants to strengthen the role of the European Airport Coordinators Association in issuing guidance.

The commission introduced slot relief rules to avoid penalizing airlines for not using slots in the event of circumstances outside of their control, Cornelis noted. However, “protection of slots and [scheduling] predictability is one thing, but we want to make sure that the regulation remains fit for delivering benefits for consumers in terms of connectivity and competitiveness,” he added. “Slot rules have to ensure fair opportunities for all airlines to access limited airport capacity and should reward those using the airport capacity efficiently.” 

Some European low-cost carriers, mainly Ryanair and Wizz Air, have been very vocal about the anticompetitive effects of the use-it-or-lose-it rule, maintaining it has allowed majors to sit on unused airport slots and prevent LCCs from using airport capacity to launch new services.

Europe’s airports also are pleading for a return to the 80:20 slot rule. “Airports understood and accepted the need for slot waivers for airlines during the pandemic. But there is no question these waivers also came with forgone connectivity and forgone revenues for airports,” remarked Olivier Jankovec, director general of Airports Council International (ACI) Europe. “Going back to the normal slot usage rule while still giving airlines the flexibility and protection they need when faced with travel restrictions or the impact of the war on specific markets is the right thing to do now that air traffic is finally recovering.”

Conversely, the International Air Transport Association (IATA) maintains it is too early to reinstate the 80:20 rule. “The proposal is in contrast to the industry’s environmental objectives and EU targets by pushing productivity at normal levels before the sector or demand is ready,” the trade body noted in a joint position paper with Airlines for America, the Arab Air Carriers Association, and the European Regions Airlines Association. Europe’s main airline trade group, Airlines for Europe (A4E), notably chose to not contribute to the position paper, most likely because it could not find common ground among its low-cost carrier and full-service airline members on the matter.

While advocating for the continuation of the current 64 percent use rate, for now, IATA and its fellow regional airline associations also warn that the commission’s proposal includes “significant structural changes that if adopted will have long-term consequences on slots.” They have expressed particular concern over the proposed changes related to JNUS and believe they will result in a “system that would be very complicated, if not impossible, to administer from a practical and technical perspective” even if the commission limits the proposal’s time period.

The proposal is an interim regulation that would apply to the following three IATA scheduling seasons while the Commission prepares for a revision of the current slot regulation EEC 95/93. Work on a revised basic regulation dates from 2011, but regulators never applied the revision owing to a spat between Spain and the UK, which was an EU member at that time, over the territoriality of the airport of Gibraltar. “We feel that a revision of the slot regulation is needed and we launched a call for evidence and an open public consultation a few days ago. We plan to submit to the Parliament a proposal for a general review in the third quarter of next year,” Cornelis said, adding that that proposal will likely include the changing environment and new EU climate goals rather than a recast of the 2011 slot regulation proposal.

In its proposed interim regulation for temporary relief from the slot utilization rules in the EU, the commission seeks so-called delegated powers to change the slot-use rate without considering the input and approval of the EP and the European Council, which represents the member states. The delegated powers would last until the end of the winter season 2023-24 and would apply only in extreme situations, such as a decline in air traffic below 80 percent of 2019 levels for at least four consecutive weeks. Second, the commission would need to demonstrate that it is the result of one of the causes listed in the proposal, namely the Covid pandemic and other epidemiological situations, or a direct effect of the Russian military aggression against Ukraine.

The proposal for the temporary relief from the slot utilization rules in the EU needs the consent of the EP and the council. The EP expects to cast the vote in plenary in October, just weeks before the start of the winter season on October 30.

The proposal also includes provisions related to the Russian aggression against Ukraine, including the requirement that airlines subject to EU sanctions, notably Russian carriers, return their slots to the slot pool.