Proposal for a Regulation of the European Parliament and of the Council amending the amended proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EEC) No 95/93 of 18 January 1993 on common rules for the allocation of slots at Community airports (presented by the Commission pursuant to Article 250 (2) of the EC Treaty)
Date: 2003-04-24
Institutions: European Commission
Subjects: IATA, Iraq, Middle East, air transport, airport, epidemic, respiratory disease, transport capacity, transport planning, war

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 24.4.2003
COM(2003) 207 final

2001/0140 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending the amended proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Council Regulation (EEC) No 95/93 of 18 January 1993 on
common rules for the allocation of slots at Community airports

(presented by the Commission pursuant to Article 250 (2)
of the EC Treaty)

EXPLANATORY MEMORANDUM

Introduction

The hostilities in Iraq have affected the provision of air transport services in the Community
and elsewhere. This  international situation  has  accentuated  fears  for  new  terrorist  attacks  in
aviation,  which  has  in  turn  triggered  a  sharp  drop  in  demand.  Also,  air  carriers  in  various
countries have been requested to provide military airlift in view of a defence  emergency by
pledging aircraft used otherwise for commercial air transport operations. Thus, supply too has
been  shortened,  triggering  a  significant  reduction  in  capacities  and  frequencies  offered  on
various routes, mostly transatlantic and to the Near and Middle East. In addition, the general
economic  downturn  is  negatively  affecting  the  air  transport  sector.  Finally,  the  recent
outbreak of the Severe Acute Respiratory Syndrome (SARS) in South East Asia has impacted
severely on air transport services.

The slow down in fighting in Iraq and the end of broad military hostilities has not yet caused
changes in the above negative air traffic developments.

Forecasts  provided  by  the  airlines'  world-wide  organisation  (IATA)  indicated  that  in  case
there  were  hostilities  in  the  Near  and  Middle  East  region  during  three  months,  that  would
have  a  downward  impact  of  10%  on  traffic,  5%  on  freight  and  further  influence  negatively
(- 5%)  passenger  traffic  during  three  months  following  the  hostilities.  At  world-wide  level
that would translate into a considerable fall in revenue by US $ 6 billion and a rise in costs by
US $ 0.2 billion. That would result in net losses for 2003 for the airline industry world-wide
of around - US $ 5.8 billion (after interest). This grim scenario would be further exacerbated
should hostilities last the double, i.e. 6 months and affect the entire summer scheduling season
(April  to  October  2003).  In  such  a  case,  net  losses  (after  interest)  could  reach  at  least
US $ - 8 billion  and  revenue  could  further  fall.  According  to  IATA  these  assumptions  were
relatively  conservative  compared  to  the  effects  seen  in  the  Gulf  War  in  1990-1991.  Also,
these estimates have not taken into account the outbreak of SARS.

Similarly,  according  to  the  Association  of  European  Airlines  the  war  risks  to  result  into  a
significant  drop  in  Revenue  Passenger  Kilometres  (RPKs)  of  the  order  of  ca.  2-3  million
RPK.  Given  that  events  of  September  11th  caused  massive  traffic  losses  (until  end  of  2002
Europe: -8%, North Atlantic: - 22%) and operating losses (in 2001 of US $ 3.02 billion), the
effects of this new conflict may further accentuate a rather fragile situation.

Also, according to data from the AEA regarding the impact of the first days of the war  (the
week  of  March  17th  –  23rd),  compared  to  the  same  week  in  the  previous  year,  international
passenger  traffic  was  down  12.3%.  Within  Europe,  the  decline  was  14.6%,  on  the  North
Atlantic, 10.2% and on Far Eastern routes 12.4%. On routes to the Middle East, the decrease
was a massive 42.2%. Since the outbreak of the war various major European air carriers have
announced significant staff reductions.

Against  the  position  taken  by  air  carriers  of  IATA,  AEA,  IACA,  ERA,  European  low  cost
carriers such as EasyJet and Ryanair, have stated that the slot allocation rules must be allowed
to  work  in  the  normal  manner;  that  there  should  be  no  relaxation  of  the  rules  upon  which
European  aviation  has  flourished  in  the  last  decade  and  that  they  consider  providing  slot
protection to airlines as a form of state aid.

2

In particular, the beginning of military operations has lead to the disruption of commercial air
services  to  the  region  affected  directly  by  the  hostilities  as  well  as  within  the  Community.
First  estimates  by  Eurocontrolindicate  that  ca.  500  daily  flights  to  the  region  are  affected;
these include both Community and third country air carriers. Also, it should be borne in mind
that Iraqi airspace has been closed for civil air transport operations since the first Gulf War.
Thus  restrictions  on  the  airspace  of  other  countries  in  the  region  are  likely  to  result  into
additional cancellations of flights and re-routing of flights from Europe central and South East
Asia.

As far as SARS is concerned, as of 9 April 2003, in the Community a total of 48 cases has
been reported, and a total of 2650 cases have been reported world-wide including 103 deaths
based on data of the World Health Organisation.

However, despite these  circumstances most air carriers operating  at Community  airports  are
not  in  a  position  to  reduce  capacity,  because  they  would  lose  unused  slots  according  to  the
"use-it-or-lose-it"  rule,  which  effectively  requires  air  carriers  to  use  their  slots  at  least  80%
during a scheduling season, to  establish historical precedence and  receive these slots for the
next equivalent scheduling season.

Thus without a decision to safeguard slots with "grandfather status" they would be forced to
maintain existing capacity even though demand has been substantially reduced and supply is
limited due to airspace restrictions, thus aggravating existing economic difficulties. In certain
cases they may not even be able to use their aircraft as these may have been required for airlift
of military staff.

The provisions of the slot Regulation

The  point  of  reference  for  the  Regulation,  as  stated  in  Article  10(3),  is  the  allocation  and
utilisation of slots during one season (“use-it-or-lose-it” rule) and in particular the situation at
the  end  of  the  season  after  the  slots  have  been  effectively  used.  In  particular,  this  Article
stipulates,  that  air  carriers  shall  not  be  entitled  to  the  same  series  of  slots  in  the  next
equivalent scheduling season, unless they can prove to the satisfaction of the coordinator, that
they have operated them, as cleared by the coordinator, for at least 80% of the time during the
season for which the slots have been allocated.

Furthermore, the Regulation in its Articles 8 (1) (a) and 10 (3) is drafted so as to allow for the
usage calculation at the end of the season, once slots have been operated and for the purpose
of the establishing historical precedence for the next equivalent scheduling season.

Article 10 (5) gives a non-exhaustive list of reasons, which can be validly used by air carriers
to  justify  the  non-utilisation  of  slots  allocated  during  a  scheduling  season.  This  particular
article  contains  in  sub-paragraph  (a)  a  non-exhaustive  list  of  unforeseeable  and  irresistible
cases outside the carrier's control. This  article  does  not  refer  to  a  situation  of  war  or  armed
conflict  and  to  the  impact  that  such  a  situation  may  have  on  the  application  of  the  slot
allocation rules.

The Regulation is based on the principle, that the allocation and the monitoring of the use of
slots  are  the  duties  of  the  coordinator  (Article  4(5)  and  (6)).  The  airport  coordinator  is
understood to be an independent body, i.e. a natural or legal person with detailed knowledge
of  air  carrier  scheduling  coordination,  the  appointment  of  which  is  ensured  by  the  Member
State responsible for  the  airport  where  slot  allocation takes  place  (Article 4(1)).  Finally, the

3

coordinator must carry out his or her duties not only in an independent manner but also act in
a neutral, non-discriminatory and transparent way (Article 4(2) and (3)).

Hence, it may be concluded that in applying Article 10(3) and (5), the coordinator must act in
accordance with principles stated in Article 4 as described above.

The necessity to modify the Regulation

For  the  reasons  outlined  above,  neither  the  Commission  nor  Member  States  can  issue  any
binding instructions to coordinators, which could interfere with their independence.

Accordingly,  it  is  proposed  to  introduce  a  new  Article  10b  into  the  Regulation  whereby
coordinators would accept that, when air carriers attribute the non-utilisation of slots allocated
to them for the Summer 2003 scheduling season to  the hostilities in  Iraq,  they  are  allocated
these slots for the next equivalent scheduling season (Summer 2004).

Bearing in mind, that air carriers should be  encouraged to release to the pool slots that they
are not going to use during the scheduling season affected by the hostilities, it is recalled that
airport  coordinators  allocate  slot  released  to  the  pool  to  accommodate  ad  hoc  requests  of
general  aviation  for  slots  (reference  to  Article  8(3)  of  the  current  Regulation)  as  well  as  to
satisfy  requests  by  incumbent  and  new  entrant  air  carriers  in  an  equitable  manner  (the  so-
called "50/50 rule" of Article 10(7) of the current Regulation). In that way during the season
affected by the hostilities scarce slot capacity will not be wasted.

Timing

An important aspect of this proposal is its timing. Initial slot allocation takes place during the
course of the IATA Scheduling Conferences: in November for the next summer season and in
June  for  the  next  winter  season.  Accordingly,  slots  for  the  summer  2003  season  were
allocated already during the IATA Scheduling Conference in November 2002, while slots for
the  winter  2002/2003  season  were  allocated  in  June  2002.  Article  10(4)  of  the  Regulation
provides that air carriers can return slots to the pool by specific dates without that affecting
the usage calculation for the slots they continue to hold. The table below indicates the most
important  date  in  the  slot  allocation  process  as  these  are  set  by  the  world-wide  scheduling
guidelines for slot allocation as established by the airline industry (IATA) and the Regulation.

Season

Duration 
season

of 

the

IATA
Allocation
Conference

Return
Date

–

revision 
latest
necessary
date of entry

Confirm
« historic »
slots 
–
6 days  prior
to the IATA
Conference

Winter 02-03

27.10.02 – 29.3.03

8 - 11 June 02

31.8.02

2.6.2002

1.6.2002

Summer 03

30.3.03 – 25.10.03

9- 12 Nov 02

31.1.03

3.11.2002

2.11.2002

Winter 03-04

26.10.03 – 28.3.04

14 – 17 June 03

31.8.03

8.6.2003

7.6.2003

Summer 04

29.03.04 – 30.10.04

8 – 11 Nov 03

31.1.04

2.11.2003

1.11.2003

4

According  to  the  world-wide  scheduling  guidelines  of  the  airline  industry  (IATA),  having
identified the entitlement to “grandfathered” slots, coordinators must provide  to each  airline
the  details  of  their  “grandfathered”  slots,  as  soon  as  these  have  been  determined  by  the
coordinator, but not later than:

(cid:1)  the  third  Monday  in  April  for  what  is  on  record  as  “grandfathered”  slots,  as  actually

operated in the preceding Winter season,

(cid:1)  the third Monday in September for what is on record as “grandfathered” slots, as actually

operated in the current Summer season up to that time.

In  view  of  the  above,  the  amended  proposal  with  the  present  amending  proposal  on  the
inclusion of a new article 10b should be adopted by the European Parliament and the Council
still during the Summer 2003 scheduling season, as it is by the 15th September ("third Monday
in  September"  as  indicated  above)  that  the  usage  calculation  for  slots  with  "grandfather
status"  for  that  season  will  be  established.  Coordinators  have  to  confirm  that  before  the
coordination  of  schedules  and  allocation  of  slots  for  the  next  summer  season  at  the  IATA
Scheduling Conference, which will take place early November 2003. Therefore, the proposed
rule needs to  enter  into  force  before  that  to  allow  coordinators  and  air  carriers  to  safeguard
unused slots.

Otherwise, there appears to be significant risk of legal challenges from those air carriers that
have  been  allocated  slots  at  airports,  where  coordinators  did  not  accept  the  justification  of
exceptional circumstances due to the hostilities for the Summer 2003 scheduling season.

5

2001/0140 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending the amended proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Council Regulation (EEC) No 95/93 of 18 January 1993 on
common rules for the allocation of slots at Community airports

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Article 80(2) thereof,

Having regard to the proposal from the Commission1,

Having regard to the opinion of the European Economic and Social Committee2,

Having regard to the opinion of the Committee of the Regions3,

Acting in accordance with the procedure laid down in Article 251 of the Treaty4,

Whereas:

(1) 

(2) 

The  war  launched  in  March  2003  against  Iraq  and  the  political  developments  that
followed  such  launch  as  well  as  the  outbreak  of  the  Severe  Acute  Respiratory
Syndrome  (SARS)  have  seriously  affected  the  air  transport  operations  of  air  carriers
and have triggered a significant reduction in demand in the beginning of the summer
2003 scheduling season;

In order to make sure that the non-utilisation of slots allocated for that season does not
cause  air  carriers  to  lose  their  entitlement  to  those  slots,  it  is  necessary  to  provide
clearly and unambiguously that those scheduling seasons are adversely affected by the
armed conflict;

(3) 

Council  Regulation  (EEC)  No  95/93  of  18  January  1993  on  common  rules  for  the
allocation of slots at Community airports5 should therefore be accordingly amended;

1

2

3

4

5

OJ C …, …, p. …
OJ C …, …, p. …
OJ C …, …, p. …
OJ C …, …, p. …
OJ L 14, 22.1.1993, p. 1.

6

                                                
HAVE ADOPTED THIS REGULATION:

Article 1

The following article 10b is inserted in Council Regulation (EEC) No 95/93:

“Article 10b

1. 

For  the  purpose  of  Article  10(3),  coordinators  shall  accept  that  air  carriers  are
entitled  to  the  same  series  of  slots  during  the  summer  2004  scheduling  season  as
were allocated to them for the summer 2003 scheduling season.

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the
Official Journal of the European Union.

Article 2

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament
The President

For the Council
The President

7