Legalized slot trading comes a step closer in Europe

European Union (EU) transport ministers have agreed a general approach on proposed changes to the 1993 slot allocation rules that could make it legal for airlines to buy and sell slots.

Proposals for freeing up the slot allocation market have been under discussion since the 1993 regulation was implemented. However, EU legislators have remained wary of throwing the doors open to either primary or secondary trading.

Primary trading is defined and regulated by an authority; secondary trading involves a direct exchange between airlines. The EU has traditionally insisted that secondary transfers should not involve monetary compensation, but has consistently turned a blind eye to such activities.

In the UK, secondary trading is entrenched at Heathrow, one of the region’s most capacity constrained airports, and has created a thriving gray market.

The Transport Council’s general approach would permit secondary trading between airlines, but would also allow member states to introduce charges for carriers that return unused slots to the slot pool too late for re-allocation. It would also strengthen the independence of, and cooperation between, slot coordinators and enhance the transparency of the allocation process.

To ensure that capacity allocation at individual airports does not adversely impact the European air traffic network, the Single European Sky (SES) network manager would remain integral to the allocation process.

Concerns about the possible negative impact of secondary trading on less lucrative regional flights and the potential speculative use of traded slots have been addressed through inclusion of a clause permitting states to apply temporary restrictions where “a significant and demonstrable problem with second trading occurs.” Such restrictions would have to be transparent, non-discriminatory and proportionate, justified and subject to European Commission approval.

A “general approach” is a position agreed by the Council before the European Parliament has determined its position on the proposal in question. It can be used to negotiate the draft legislation that will lead to final adoption and subsequent entry into force of the legislative act.
ATW, Nov 1, 2012