European airlines forced to cut capacity as a result of the economic downturn stand to gain from a proposal by the European Commission to temporarily suspend its "use it or lose it" slot restrictions at congested airports.
Under the proposal, airlines that choose not to use their slots this summer as part of a capacity reduction programme will be able to hold on to those slots for next summer. The current rule states that an airline can only keep its slots from one season to the next provided that 80% of them were taken up in the previous season.
The EC's decision followed lobbying from the Association of European Airlines, which had identified the move as a priority in helping its members cope with the deteriorating economic environment. "This was on our wish list at the top as a practical and achievable measure that wouldn't have discriminatory effects - it's simple, it's straightforward and it's meeting a need. We've been discussing internally what can be done to help the industry for four to five weeks and we came up with a series of possible measures this was the first one we thought of because it's politically doable," says AEA manager information David Henderson.
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But the move has been met with dismayfrom some of Europe's low-cost carriers, which see it as nothing short of state aid and protectionism. "The Commission's proposal is anti-consumer and only in the narrow commercial interest of a handful of ailing flag carriers," says easyJet chief executive Andy Harrison. "We call on the European Parliament and EU member states to reject a piece of legislation that has been written by the AEA, the unrepresentative club of former state-run airlines."
Ryanair agrees that the proposal is "simply state aid by another name", which has been "put in place to protect flag carriers". However, the carrier says it does not plan to contest the move because "there's no point in fighting a losing battle".
AEA's Henderson responds that he is "not aware of any incidence where a low-cost carrier has been prevented from entering routes", pointing out that easyJet "has no intention of piling into Heathrow" and is merely using the proposal as a "PRopportunity". He adds: "Clearly there's a range of benefit in this move - not all airlines are looking to cut back capacity in equal measure. It will be more interesting to those that are into heavy cutbacks, and there will probably be a range of benefit within our membership."
For the time being, the EC is only proposing the suspension of its 80-20 rule during the 2009 summer season. However, it says "depending on how serious the situation appearsas the 2009-2010 winter season approaches, itmay decide, on the basis of a thorough impact study, to renew all or part of the scheme, which would then effectthe 2010-2011 winter season". This is not the first time the 80-20 rule has been frozen by the EC it took similar action in 2001-2002 and 2003.
Source: Airline Business
