Economic downturns as severe as the one now gripping the global economy result in stress and hardship for tens of thousands of businesses and millions of their employees. But at least free markets ensure that a small but significant minority can thrive on the new opportunities that emerge, as the recession lays bare the weaknesses of established players that are incapable of streamlining themselves quickly enough to adapt to the new landscape.
Entrepreneurs are not quite rubbing their hands with glee, but they are talking openly about their excitement as they prepare for revolution in the world of business.
Someone forgot to tell the European Commission, it seems. Governments have for years talked about the need to provide new-entrants with access to slots at the continent's most congested hubs. Hence the concept of the "use it or lose it" slot was born. If an airline can't turn a profit using a particular slot pair, or indeed sustain the losses as it tries to hang on to it through a slump in demand, then surely it is in the interests of consumers that it falls into the hands of a carrier that can? How can the so-called liberalised single European aviation market function if the weak aren't allowed to die?
So, why is the Commission falling over itself to suspend use-it-or-lose-it rules to help high-cost flag carriers hoard valuable slots that they cannot profitably use? The Brussels bureaucrats are worried that these airlines will be "forced" to operate loss-making services to hold on to slots, when they desperately need to cut capacity. But what is even more desperately needed is recognition that there are still too many financially struggling carriers fighting over market share at major hubs, and some good will come out of this recession if it forces a round of consolidation.
The Commission's protectionist proposals will do little more than prolong the status quo, as newcomers such as EasyJet and Ryanair face continual hurdles in trying to deliver what it seems consumers really want, which is low fares. These proposals will lead to fewer flights and higher fares, and worsen the economic crisis for all but a handful of ailing flag carriers.
If unused slots are in demand they will be taken up by other, more efficient airlines, and the interests of the flying public and the business community will be best served. The European Parliament and European Union member states should finally start practising what they preach and reject the Commission's anti-competitive proposals, which belong in the economic dark ages.
Source: Flight International
