Select Committee on European Scrutiny Twenty-Third Report


3 ALLOCATION OF AIRPORT SLOTS

(24485)
8757/03
COM(03) 207
Draft Regulation amending Council Regulation (EEC) No. 95/93 on common
rules for the allocation of slots at Community airports.


Legal baseArticle 80(2) EC; co-decision; qualified majority voting
Document originated30 April 2003
Deposited in Parliament 8 May 2003
DepartmentTransport
Basis of consideration EM of 2 June 2003
Previous Committee Report None; but see (22519) 10288/01 and (23997) 14205/02: HC 63-v (2002-03), paragraph 2 (18 December 2002)
To be discussed in Council Not known
Committee's assessmentPolitically important
Committee's decisionNot cleared; relevant to the debate recommended on the main draft Regulation on allocation of airport slots

Background

  3.1  The allocation of landing and taking-off slots at Community airports is regulated by Council Regulation No. 95/93,[6] the purpose of which is to ensure an efficient distribution of slots in a transparent and open manner. In November 2002 the Commission presented an amended draft Regulation to amend Regulation No. 95/93, which we have recommended for debate in European Standing Committee A.[7]

The document

  3.2  Under Regulation No. 95/93 an air carrier which uses a slot in one season has first claim on it in the next corresponding season, under "grandfather rights". This is subject to use of the slot for at least 80% of the time — a so-called "use-it-or-lose-it" rule. But, in the circumstances resulting from the hostilities in Iraq and the outbreak of Severe Acute Respiratory Syndrome (SARS) in East Asia, the European Commission thinks there should be increased temporary flexibility in the application of the "use-it-or-lose-it" rule. The draft Regulation would allow airlines to retain slots allocated to them for Summer 2003 during Summer 2004, even if they have not been able to use the slots for 80% of the time. It would achieve this by amending the main amending draft Regulation referred to above.

  3.3  The justification made for the suspension of the "use-it or lose-it" rule for the summer 2003 season is that it would:

  • not force airlines to use slots inefficiently, for example by flying empty or smaller planes, to retain grandfather status for their slots;
  • provide airport slot co-ordinators with legal certainty about the suspension of the rule, so freeing them from the possibility of legal action; and
  • bring the EU in line with many other authorities, including the United States, Japan and Australia, which have already agreed a waiver for their similar slot usage requirements for the 2003 (Northern Hemisphere) summer season.

The Government's view

  3.4  The Parliamentary Under-Secretary of State, Department of Transport (Mr David Jamieson) tells us:

    "The European Commission has linked the proposal to suspend the 'use-it or lose-it' rule with the amended November 2002 proposal, which includes more wide-ranging amendments to Regulation 95/93. This means that the suspension could only take effect once the November 2002 proposal was voted through Council (see EM 14205/02[8]). Whatever is decided on the suspension of the rule must be done quickly and that will not happen if the current amendment remains linked to the November 2002 proposal. The more wide-ranging proposal from the Commission raises more difficult and complex questions and consequently swift progress on the proposal to suspend the 'use-it or lose-it' rule necessitates its consideration as a stand-alone proposal. The Presidency, the European Parliament and Member States have asked the Commission to reconsider its approach, and de-link the two issues. We expect the European Commission will re-issue a proposal de-linking the two issues shortly.

    "Not all airlines support suspension. Some airport operators also object. They assert that the incumbent airlines are effectively seeking to prevent market access by another operator to slots which they themselves do not want to use. They argue that suspension would be a restraint to trade and an anti-competitive measure.

    "In normal times, the Government would welcome an increased turnover of slots at congested airports and the greater opportunities that this would offer to airlines wishing to provide services in competition with incumbents. The Government considers that a properly functioning 'use-it-or-lose-it' rule is an integral part of an efficient slot allocation system.

    "However, in the absence of a suspension of the 'use-it or lose-it' rule, the airlines would use slots inefficiently, for example by flying empty or smaller planes in order to retain grandfather status for their slots.

    "The Government considers that it is important to provide airport slot co-ordinators with legal certainty. Otherwise, ACL[9] could be subjected to the possibility of extended legal action from airlines. Airlines also need legal certainty in order to be able to plan their operating schedule to best commercial advantage. This will also benefit consumer interests. Uncertainty regarding the application of this rule would serve nobody's interests.

    "The Government does not propose to oppose the suspension of the 'use-it-or-lose-it' rule."

  3.5  On the basis of consultations with those concerned the Minister adds:

    "Stakeholders all object to the linking of the amendment on suspension to the November 2002 proposal. There is a diversity of views about the substance of the proposal. The larger scheduled airlines and the charter airlines, the Association of European Airlines, the International Air Travel Association and the International Association of Charter Airlines are in favour of the suspension. Low-frill carriers and the Airport Operators' Association object to the suspension."

Conclusion

  3.6  The Minister asserts that consumer interests would be served by removing legal uncertainty for airlines planning their operating schedules. But he makes no comment on the consequences for consumer interests of the alleged trade restraint and anti-competitive aspects of the proposed measure. We should like to hear further from the Minister on this. Meanwhile we do not clear the document.

  3.7  We note that it is possible that this proposal will be separated from the main draft amending Regulation, and would therefore proceed more quickly. However, if that does not happen, we would regard the current document as relevant to the debate we have recommended in European Standing Committee A on the main draft amending Regulation.



6   OJ No. L 14, 22.1.93, p.1. Back

7   See headnote. Back

8   That is the Explanatory Memorandum for the revised amending draft Regulation - see headnote. Back

9   Airport Coordination Limited, the independent airport slotallocation coordinator for the UK. Back


 
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