THE EUROPEAN COMMISSION (EC) is keen to overhaul the slot-allocation system at Europe's airports by creating a "market" in which some slots could be traded for money. It is right to be looking for an overhaul but, if it believes that airline services should exist as much for the customer as for the operator, it should not be looking for monetary solutions.
There can be no doubt that the existing regime for allocating and retaining slots at European airports is both outmoded and weighted in favour of the existing slot "owners". It is quite clear that new airlines which have not inherited valuable slots have had their ambitions for expansion severely limited by their inability to obtain them. Only last week, part of the blame for the descent into court protection of the shining star of French liberalisation, Air Liberte, was given as its inability to displace the incumbent Air France/Air Inter from its most valuable slots.
There is, of course, no more reason for an incumbent airline to volunteer to yield a valuable slot to a potential competitor than there is an inalienable right of any new start-up to insist on being given rights to slots. In that, there lies the only hope of resolving the conflicting demands of incumbents and incomers: neither side has right entirely on its side.
The incumbents have spent time and money (usually a great deal of each) in establishing the services which use those slots and integrating them with the rest of their services. The incomers may well have hard-won service approvals, which they cannot take up because of the unavailability of appropriate slots.
The important point that both the EC and the airlines need to grasp is that a slot is not a simple entity to which a simple monetary value can be attached. The same slot which enables a transatlantic carrier to charge a premium fare for delivering a Boeing 747-full of business travellers to their destination at a convenient time can be the essential component for the survival of a regional carrier whose whole business depends on being able to land one 19-seat Fairchild Metro in time to interline with that 747.
In an open market, the 19-seat regional airliner would lose its slot to the 747. That is why the EC wants to preserve a hybrid solution under which some slots would still be "ring-fenced" to guarantee continued access for regional and start-up carriers, but an element of trading of slots between consenting carriers for money would be allowed. (At the moment, European airlines are allowed to swap slots by mutual agreement, and can have under-used slots taken from them, but no money officially changes hands.)
What the EC needs to do is to produce a solution which would allow the equitable trading and reallocation of all slots, without putting the financially weaker regional carriers (and their customers) at a disadvantage. That would mean ensuring a regular turnover (or at least a regular offering) of slots, and a non-financially based means of establishing the relative merits of particular airlines' claims for slots.
(Slots should not be owned by airlines: they should be rented from the slot-provider, such as an airport or authority. Rents could be assessed as percentages of revenue from the flights using them, with those percentages rising in the peak periods and dropping in the non-peak, irrespective of size of aircraft.)
A merit assessment could take into account factors such as social need (an important issue in regional operations), relative economic importance of a particular service to an operator, importance of interlining for that service, degree of competition on that particular route/service and existing success on that service.
The EC's role here could be all-the-more effective if it were to acquire the right to negotiate air-services agreements with third countries, so that the same authority could establish all the parameters of a particular service. That might ensure that there would be no more meaningless allocations of route rights for which there are no slots or (even more infuriatingly) no appropriate slots - at the expense of a rise in bureaucracy.
Source: Flight International
