Communication from the Commission Communication on the application of Regulation (EC) 793/2004 on common rules for the allocation of slots at Community airports
Date: 2007-11-15
Institutions: European Commission
Subjects: air transport, airline, airport, common transport policy, competition, transport capacity, transport planning

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.11.2007 
COM(2007) 704 final 

COMMUNICATION FROM THE COMMISSION 

Communication on the application of Regulation (EC) 793/2004 on common rules for 
the allocation of slots at Community airports  

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COMMUNICATION FROM THE COMMISSION 

Communication on the application of Regulation (EC) 793/2004 on common rules for 
the allocation of slots at Community airports 

(Text with EEA relevance) 

1. 

INTRODUCTION  

On  21  April  2004  the  Council  adopted  Regulation  (EC)  793/2004  amending  Council 
Regulation (EEC) 95/93 on common rules for the allocation of slots at Community airports. 
The aim of the revision was to strengthen the Regulation so as to ensure that scarce capacity 
at congested Community airports is managed and used as efficiently as possible. The system 
of slot allocation already in place was not fundamentally modified. 

On  the  basis  of  Article  14a  (1)  of  Regulation  On  the  basis  of  article  14a  (1)  of  Regulation 
(EEC)  95/93,  as  amended  by  Regulation  (EC)  793/2004,  the  Commission  shall  submit  a 
Communication  to  the  European  Parliament  and  the  Council  on  the  operation  of  this 
Regulation  within  three  years  of  its  entry  into  force.  The  Communication  shall  address  in 
particular  the  functioning  of  Articles  8,  8a  and  10.  This  Communication  complies  with  this 
obligation. 

On  23  January  2007,  the  Commission  launched  a  consultation  exercise  to  obtain  interested 
parties'  comments  on  the  operation  of  Regulation  (EC)  793/2004.  The  Commission  has 
received 44 contributions from the following groups:  

- National authorities 
- Regional bodies and local authorities 
- Stakeholder associations and organisations 
- Air carriers 
- Airports 
- Slot coordinators 
- Other (Eurocontrol) 

2. 

MAIN ISSUES 

The following picture emerges from the contributions: 

(1)  Member States as well as other stakeholders point at the fact that Regulation 793/2004 
has been in force for only three years. This relatively short period makes it difficult to 
identify firm trends and to make a reliable assessment of the effects.  

(2) 

Air carriers point at the main problem that lies at the heart of the current shortage of 
slots at congested airports, namely the lack of airport capacity. Rather than addressing 
the  symptoms,  such  as  the  scarcity  of  slots,  the  air  carriers  advocate  increasing 
physical airport capacity. 

(3) 

Airports  acknowledge  the  positive  results  of  the  Regulation  but  -  in  view  of  the 
capacity  crunch  to  be  expected  in  the  coming  years  -  also  point  at  the  necessity  to 

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further  improve  capacity  usage  by  means  of  additional  rules  and  local  guidelines.  A 
number of airports have made specific recommendations to this effect. 

(4)  With  regard  to  the  process  of  slot  allocation,  as  redefined  by  Regulation  (EC) 
793/2004,  Member  States  and  all  other  stakeholders  are  of  the  opinion  that  it  has 
significantly improved, even if it is difficult to measure its effect in terms of efficiency 
of airport use. 

(5) 

(6) 

The obligation for Member States to ensure that sanctions or equivalent measures are 
available  to  deal  with  slot  abuse  has  a  significant  effect  on  the  behaviour  of  air 
carriers. Air carriers compliance with the various provisions concerning the allocation 
and the actual use of airport slots has improved in such a way that, as a result of the 
mere  existence  of  sanctions,  it  has  not  been  necessary  to  impose  sanctions  or 
equivalent measures. 

Although  the  slot  coordinators  are  of  the  opinion  that  the  Regulation  contains  a 
significant number of improvements compared to Regulation (EEC) 95/93 and that it 
has worked reasonably well, there is scope for further improvements, notably on the 
issue of new entrance, local rules and the role and position of the coordinator. .  

Below,  more  specific  reactions  to  the  various  issues  raised  in  the  consultation  paper  of  the 
Commission  are  reflected.  Where  reference  is  made  to  'the  Regulation',  such  reference 
concerns Regulation (EC) 793/2004 only.  

3. 

NEW ENTRANT 

The new entrant rule seems to have a limited effect on competition at Community airports 
and on the best use of scarce capacity.  

Member  States  find  it  difficult  to  answer  the  question  to  what  extent  the  Regulation  has 
contributed to additional opportunities for new entrants as Member States' authorities are able 
to identify the number of new entrants operating at slot coordinated airports but can not say 
whether the same number would have been operating in the absence of the new entrant rule. 
Some Member States find the definition of a new entrant too complicated as it does not give a 
clear picture of the new entrant concept and may therefore lead to different interpretations.  

Some Member States appreciate the usefulness of the new entrant rule which allows their air 
carriers  to  obtain  slots  at  airports  in  other  Member  States.  The  new  entrants  rule  has  been 
equally useful in the context of relations with third countries: it has created a possibility for 
third country carriers to obtain slots at congested Community airports.  

Nevertheless, the rule may be considered as too restrictive: by giving new entrants priority in 
the  administrative  allocation  of  slots  from  the  pool,  it  may  be  more  difficult  for  air  carriers 
already  operating  at  a  small  scale  from  a  congested  airport  to  expand  and  compete  with 
incumbents  on  a  particular  route.  Such  expansion  could  be  considered  at  least  as  good  a 
method of promoting competition as encouraging new entrants. 

On a different note, experience in other Member States demonstrates that it is not so much the 
scarcity of slots that prevents air carriers from entering the market at an airport but rather that 

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the available slots are not taken up by new entrants who simply show a lack of interest in the 
first place.  

One  Member  State  comments  that  slots  allocated  under  the  new  entrant  rule  have  often  not 
been used, or have only been used for a short period of time. It concludes that new entrants 
have  thus  not  increased  competition  for  incumbent  carriers.  The  Member  State  favours  the 
introduction of a local rule instead, which would give priority to air carriers and air services 
on  the  basis  of  criteria  such  as  size  of  aircraft  used,  new  destinations  and  frequencies  on 
routes with less than three return services per day. Two Member States mention that the new 
entrant rule has favoured the development of new routes and that most new entrant slots have 
been used for short and medium haul routes. 

The  airports  state  that  the  new  entrant  provisions  have  barely  had  an  effect  on  competition 
between  air  carriers,  as  it  creates  a  negligible  presence  at  an  airport,  leading  to  a  range  of 
small  operations  that  do  not  provide  effective  competition  in  the  market  place.  This  is 
accentuated  by  the  relatively  small  number  of  attractive  slots  available  in  the  pool.  Strict 
application of the new entrant rule may undermine the effective use of scarce capacity. As an 
alternative, it is proposed to further develop local rules as an instrument to optimise capacity. 
In this approach, Member States would have the possibility to opt out on the new entrant rule 
and endorse local rules instead. 

Air carriers observe that it is difficult to properly assess the impact of the new entrant rule. 
They hold the view that competition between air carriers is strong enough in Europe and that 
airport congestion has not deterred new entrants from challenging the established air carriers 
at major airports as well as at secondary airports. One air carrier states that at 32 coordinated 
EU airports, low cost carriers have started new air services or increased their number in the 
last  decade.  This  would  tend  to  prove  the  effectiveness  of  the  new  entrant  rule.  It  is  noted, 
however,  that  there  is  no  clear  connection  between  this  development  and  the  Regulation 
which dates back only to 2004. 

Some  coordinators  argue  that  the  new  entrant  rule  may  not  be  widely  understood  among 
Community based carriers and even less so by air carriers from third countries. Coordinators 
in  general  do  not  feel  qualified  to  give  an  opinion  on  whether  the  new  entrant  rule  has 
promoted competition on intra-Community routes, as levels of competition are affected by a 
wide variety of factors at airports. A broader set of rules governing new entrants might avoid 
situations in which the effects of a strict application of the rule frustrates other objectives of 
the Regulation, such as the most optimal use of scarce capacity.  

In addition, one coordinator argues that secondary trading of slots has contributed more to the 
increased efficiency of slot usage than the new entrant rule, as trading has resulted in small 
aircraft operated on short routes being replaced by large aircraft on long haul routes.  

The mere fact that new entrants are limited in the amount of slots they can hold to apply under 
the new entrant status implies that they are prevented from expanding their services and are 
unlikely  to  establish  a  viable  network  and  competitive  critical  mass  of  operations.  This 
limitation could result in a fragmentation of slots amongst many small operators and result in 
strengthening the relative position of the incumbent carriers at hub airports.  

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4. 

THE ROLE OF THE COORDINATOR 

The main issue concerning the role of the coordinator regards its neutrality and functional 
independence.  Evidence  suggests  that  the  relevant  provisions  of  the  Regulation  have  not 
yet been implemented in a unified and consistent way in all Member States. 

Some Member States have passed on the duties of the slot coordinator to the airport operator 
and recognise that, as a consequence, the coordinator is not functionally independent from any 
single  interested  party  required  by  the  Regulation.  Most  Member  States  have  functionally 
separated the slot coordinator from any single interested party and state that this is conducive 
to ensuring the neutrality and independence of his/her actions. 

Air  carriers  draw  attention  to  the  fact  that  the  independence  of  the  slot  coordinator, 
particularly his/her functional separation, is not yet sufficiently ensured in all Member States. 
The Commission is urged to make sure, as a matter of priority, that the relevant provisions of 
the  Regulation  are  consistently  applied  across  the  EU.  The  low  cost  carriers  are  concerned 
that  the  slot  coordinator  may  have  too  many  powers  and  that  the  adoption  of  an  appeal 
procedure could remedy this. 

Regional air carriers express the view that the use of other than the English language in the 
slot  coordination  committee  hampers  its  functioning.  They  recommend  the  provision  of 
translation  facilities  if  requested  or  the  adoption  of  English  in  these  committees.  One  air 
carrier suggests that one coordination committee per coordinator (instead of per airport) could 
improve the committee's efficiency.  

Slot  coordinators  welcome  the  fact  that  the  Regulation  stresses  the  importance  of  the 
independence  of  the  coordinators'  position.  Member  States  have  made  much  progress  in 
applying  the  relevant  provisions  of  the  Regulation  though  not  all  coordinators  yet  have  the 
fully independent status they need. Their independence could be further enhanced if they no 
longer had to rely on airport operators and air carriers for their budget. But the coordinators 
do not substantiate with figures, or otherwise, that their position has been negatively affected 
by these financial arrangements. 

In  general,  it  is  believed  that  complete  transparency  of  schedule  data  will  lead  to  neutrality 
and non-discrimination in the slot allocation process, as the evidence of the coordinators' slot 
allocation decisions will be available for all to examine. There is anecdotal evidence that in 
some Member States there exist significant problems with the transparency of coordinators’ 
scheduling data. It is noted that currently not all coordinators in the EU submit their data to 
the slot allocation database which is accessible free of charge to all air carriers. 

5. 

THE PROCESS OF SLOT ALLOCATION 

Local guidelines have the potential to add more flexibility to adapt to local circumstances 
to allow for better use of the existing slots at congested airports, provided they comply with 
the provisions of the Regulation.  

Member States take the view that even if there is no generally accepted definition of 'efficient 
use  of  airport  capacity',  a  number  of  new  or  modified  provisions  in  the  Regulation  have 
contributed to more efficient use of airport capacity: the new definition of what constitutes a 

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series  of  slots,  the  further  strengthening  of  the use-it-or  lose-it  rule  and  the  stricter  rules  on 
force majeure. 

The airports highlight the potential value added of the Regulation as it allows the introduction 
of local rules to improve the slot allocation process in a more flexible manner. This benefit is 
currently regarded as being limited however, and the provisions could be further strengthened 
by  raising  the  slot  usage  rate  under  the  use-it-or-lose-it  rule  and  by  allowing  airports  to 
introduce a slot reservation fee which would serve as an incentive for air carriers to commit to 
the actual use of allocated slots. The fee would be paid in advance for every allocated slot and 
be forfeited when the slot is not used.  

Air  carriers  point  to  the  absence  of  a  common  definition  of  what  is  efficient  use  of  airport 
capacity.  They  offer  several  possibilities  for  such  a  definition  including  maximising  the 
number  of  passengers  carried  for  each  slot  or  the  best  contribution  to  development  of  the 
network at a given airport. The  lack of a common  definition makes it difficult to assess the 
effects  of  the  revised  Regulation.  In  any  case,  the  increased  possibility  to  apply  local 
guidelines  is  a  major  improvement  as  is  the  potential  to  add  ad-hoc  flexibility  to  adapt  slot 
allocation  to  local  circumstances.  Compatibility  of  such  local  rules  with  Community  law 
needs to be ensured. 

Slot coordinators observe that the new definition of what constitutes a series of slots and the 
stricter definition of force majeure have had a positive effect on efficiency of operations. The 
Regulation has increased the minimum number of slots that must be operated in order to earn 
historic  rights  for  the  operation  of  a  series.  This  has  also  contributed  to  the  reduction  of 
fragmentation of schedules at airports, be it marginally. 

6. 

ENFORCEMENT 

The introduction of dissuasive sanctions or equivalent measures to prevent slot abuse has 
fostered better use of existing capacity,. 

One Member State observes that the possibility for a slot coordinator to withdraw a slot once 
an air carrier does not use it in accordance with the Regulation has a strong deterrent effect 
and this is a clear regulatory improvement that the Regulation has brought about.  

Airports  are  dissatisfied  with  the  impact  of  the  provisions  on  enforcement  which  aim  to 
promote  the  proper  use  of  airports  because  there  is,  they  claim,  little  interest  in  creating 
procedures that lead to sanctions applied by Air Traffic Management authorities. The airports 
consider  that  more  could  be  done  in  terms  of  defining  the  tools  to  properly  enforce  the 
Regulation. In this context, consistency between airport slots and flight plans in a systematic 
way is advocated and the development of implementing rules would be helpful.  

Airports also state that coordinators have rarely used their power to withdraw slots from air 
carriers that repeatedly and intentionally operate air services outside the allocated slot times. 
It has not been made clear, however, whether this is due to the reluctance of coordinators to 
use their enforcement powers or whether it is due to the good behaviour of air carriers.  

Air carriers welcome the significant progress that has been made by requiring that effective, 
proportionate and dissuasive sanctions or equivalent measures are applied to prevent abuse of 
the  slot  allocation  mechanism.  The  effects  thereof  are  not  quantified,  however.  The  overall 

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perception is that the mere threat of sanctions has a deterrent effect and is thus an effective 
means to achieve the objective of more efficient use of slots. The air carriers stress that further 
sanctions should be proportionate. 

One air carrier takes the view that the Regulation lacks common principles on the monitoring 
and sanctioning of punctuality of slot use. Some slot coordinators apply these principles in a 
coherent  way  while  others  do  not,  and  this  has  resulted  in  confusion  and  unequal  treatment 
between  air  carriers.  The  same  air  carrier  advocates  that  measures  taken  by  Member  States 
against slot abuse should be made public so as to enhance transparency. 

The  regional  air  carriers  believe  that  the  a  number  of  circumstances  beyond  an  air  carrier’s 
control should be considered force majeure when calculating adherence to the use-it-or-lose-it 
rule:  weather  conditions  that  affect  operators  of  smaller  aircraft  more  than  others  should  be 
recognised  as  force  majeure;  flight  cancellations  due  to  industrial  action  and  strikes;  and, 
cumulative  delays  over  a  day  caused  by  Air  Traffic  Management  problems  that  result  in 
cancellations.  

Slot coordinators point out that they have as yet not used their powers to withdraw slots from 
air  carriers  that  repeatedly  and  intentionally  operate  air  services  outside  the  allocated  slot 
times. The existence of this power has, however, made it easier for coordinators to convince 
air carriers to change their behaviour if necessary.  

One  coordinator  mentions  that  the  Commission  itself  has  a  significant  responsibility  for 
monitoring and enforcing implementation of the Regulation and that raising the standards for 
coordination  across  the  EU  should  be  given  greater  priority  by  the  Commission.  Another 
coordinator  suggests  that  the  coordinator  should  be  given  the  authority  to  demand  from  the 
Air Traffic Management authorities the refusal of a flight plan in case of manifest slot abuse 
by an air carrier.  

7. 

CONCLUSIONS 

The new entrant rule seems to have had only a limited effect on competition at Community 
airports and on the best use of scarce airport capacity as some evidence suggests that the rule 
seems not to be widely understood and can therefore result in creating a negligible presence at 
congested  airports,  leading  to  a  range  of  small  operations  that  do  not  provide  effective 
competition in the market place.  

Local guidelines have the potential to add more flexibility to adapt to local circumstances to 
allow for better use of the existing slots at congested airports. The possibilities to introduce 
local  guidelines  should  be  enlarged,  provided  they  comply  with  the  provisions  in  the 
Regulation.  

Although the Regulation has brought some improvements in use of airport capacity, it is not 
adequate to address the increasing congestion at Community airports. Implementation of the 
measures  set  out  in  the  Commission  Communication  "An  action  plan  for  airport  capacity, 
efficiency  and  safety  in  Europe"  adopted  in  October  2007  is  needed  to  achieve  a  more 
efficient use of scarce airport capacity possibly accompanied by a more structured approach to 
market based slot allocation schemes. 

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There are concerns regarding the neutrality and functional independence of the coordinator at 
coordinated  Community  airports.  The  evidence  suggests  that  the  relevant  provisions  of  the 
Regulation  have  not  yet  been  implemented  in  a  unified  and  consistent  way  in  all  Member 
States. 

The  introduction  of  dissuasive  sanctions  or  equivalent  measures  to  prevent  slot  abuse  has 
fostered better use of existing capacity.  

Although  the  Regulation  has  brought  about  a  number  of  significant  improvements  aimed  at 
making  a  better  use  of  scarce  capacity,  the  Commission  will  now  have  to  concentrate  on 
assuring  adequate  implementation  of  a  number  of  issues  with  which  stakeholders  have 
experienced  particular  difficulties.  Also,  the  Commission  concludes  that  the  existing 
Regulation can be improved through an interpretative instrument where the scope of a number 
of provisions would be clarified. Eventually, the Commission could envisage a partial review 
of the text should this prove to be indispensable. 

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