Proposal for a Regulation of the European Parliament and of the Council on common rules for the allocation of slots at Union airports (recast)
Date: 2022-08-29
Institutions: Directorate-General for Mobility and Transport, European Commission
Subjects: common transport policy



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CALL FOR EVIDENCE


FOR AN IMPACT ASSESSMENT







This document aims to inform the public and stakeholders on the Commission's future legislative work so they can provide feedback on the Commission's understanding of the problem and possible solutions, and give us any relevant information that they may have, including on possible impacts of the different options.







Title of the initiative




Allocation of EU airport slots – review of rules






Lead DG (responsible unit) 




DG MOVE – Unit E1






Likely type of initiative




Legislative






Indicative timetable




Q3 2023






Additional information




Airports (europa.eu)














A. Political context, problem definition and subsidiarity check  






Political context 






Mobility and transport, including aviation, are drivers of economic growth, regional development, jobs and trade for the EU. The liberalisation of the internal aviation market enabled the robust growth of the sector, with significant benefits for consumers and businesses. While aviation has also contributed to costs for society, notably in the form of greenhouse gas and air pollutant emissions and noise the Commission proposes to address these through a series of other initiatives, such as the revision of the Emissions Trading System as regards the aviation sector, and by requiring airlines to make greater use of sustainable alternative fuels.


Airports play a central role in the connectivity airlines provide to passengers and freight customers in the EU and further afield. Steadily increasing demand, airport congestion and insufficiently effective use of existing airport capacity have led to major bottlenecks for EU aviation, with demand exceeding capacity at least for part of the day in 90 airports in the European Economic Area (EEA) + Switzerland. This hinders the seamless functioning of the EU aviation market, as well as airlines’ and airports’ ability and business freedom to provide services in line with consumer demand and Member States’ connectivity needs. It also puts the EU at a disadvantage vis-à-vis other major aviation markets (e.g. Turkey, the Middle East). 


The Slot Regulation improved the management of airport capacity at European airports by establishing a common framework for ensuring that airlines have access to the busiest airports in the EU/EEA based on principles of neutrality, transparency and non-discrimination. However, in light of increasing airport congestion, fair access to slots must be further enhanced. Air traffic is quickly returning to 2019 pre-COVID-19 levels and many coordinated airports are reaching the limits of available capacity. A framework ensuring fair access to slots is particularly important given that airports are unlikely to see any major capacity upgrades in terms of constructing new airports, terminals and runways, due to high costs, lack of social acceptance and geographical and environmental constraints (e.g. airports in densely populated areas). In addition, the current rules are not considered sufficiently effective at optimising the use of scarce capacity in line with other EU policy objectives (such as the European Green Deal), and have not proven responsive and flexible to sudden external shocks. 


Negotiations on the 2011 Commission proposal to revise the current rules on slot allocation were stopped in 2013 despite the need to revise the framework, which dates back to the 1990s and is in need of review given the new market realities (a mature single aviation market, airport congestion, lack of flexibility in times of crisis). 


A new revision was announced in the sustainable and smart mobility strategy, with a view to addressing both pre‑existing problems and new challenges. The revision will also take into account other policy priorities such as decarbonisation, quality connectivity and intermodality. 






Problems the initiative aims to tackle 






Despite the severe downturn caused by the COVID-19 travel restrictions, air traffic forecasts point to full recovery to pre-pandemic levels by 2024 and further long-term growth beyond that, with a return to airport congestion. While a solution to airport congestion could be to generate additional airport infrastructure, it is clear that such a solution cannot be delivered by slot allocation. However, slot allocation can be an effective tool for managing scarce capacity, which is essential at congested airports. In that respect, three pre-existing (i.e. pre-COVID) problems and one new problem have been identified.


1.
                              Ineffective rules to ensure efficient management of airport capacity and to prevent competition distortion (pre-existing problem)


Effective competition, from which consumers benefit, depends on the ability of new entrants to obtain slots and exert competitive pressure, and of established carriers to expand. At heavily congested airports where demand for take-off and landing slots exceeds available supply, especially at attractive peak times, this is often very difficult. In such a market structure there is an increased risk that non-efficient use of slots blocks capacity and distorts competition. The Slot Regulation does not sufficiently discourage such practices. 


2.
                              The institutional set-up of independent oversight authorities does not always ensure efficient implementation and uniform application of the rules (pre-existing problem)


In some cases, there are concerns that slot coordinators are insufficiently independent and/or lack the capability to monitor and enforce slot allocation effectively. Experience during the COVID-19 crisis also showed that the lack of coordination among slot coordinators in interpreting force majeure provisions causes uncertainty for carriers and prevents the achievement of a level playing field. 


3.
                              The legal framework is not aligned with other Commission policies (pre-existing problem)


The Slot Regulation is no longer fully aligned with other Commission policies. For example, the interplay between the management of capacity on the ground and in the sky should be improved, notably in the context of the reform of the Single European Sky. Furthermore, the current rules do not allow the necessary flexibility to take into account other policy priorities such as decarbonisation, quality connectivity and intermodality. To increase legal certainty and clarity, the opportunity should be taken to codify legal interpretations on the transfer of slots, stemming for instance from Commission competition law decisions.


4.
                              The legal framework is not flexible in times of crisis, leading to severe demand shocks (new problem)


The EU had to amend the Slot Regulation twice during the pandemic and adopted three delegated acts to lower slot-use requirements, which shows that the legal framework is not sufficiently flexible to deal with sudden external shocks of this magnitude. The Russian military aggression against Ukraine has also shown that the rules on slots need to be made more flexible and responsive.  






Basis for EU action (legal basis and subsidiarity check) 






Legal basis






The legal basis for the Regulation is Article 100(2) of the Treaty on the Functioning of the European Union. In accordance with Article 4(2)(g) of that Treaty, shared competence between the EU and the Member States applies in the area of transport.






Practical need for EU action






Due to the inherent cross-border nature of both aviation and the COVID-19 pandemic, the issues at hand cannot be dealt with at the national level and require common action at EU level. Leaving Member States to act alone would result in a patchwork of national measures, leading to market fragmentation and distortions of competition.






B. Objectives and policy options 






While the interest of the EU public is the overarching focus, the general objective is to achieve fair access to, and efficient use of, airport capacity to ensure competition and enhance connectivity within and to or from the EU, for the benefit of passengers and regional economic development. 



The specific objectives guiding the choice of policy measures are: 


-to improve the efficient use of airport infrastructure, enhancing competition to better serve the interests of  consumers in terms of connectivity and greater choice and reliability of services; 


-to make the legal framework flexible in times of crisis; 


-to ensure better implementation of the legal framework (transparency, independence of slot coordinators, harmonisation);


-to ensure consistency and synergies with other EU legislation and policies. For instance, while rules governing airport capacity are not the prime tool to achieve the decarbonisation of the sector, where relevant the framework should take into account the European Green Deal objectives. The framework could also consider future Commission interpretative guidelines on the Airport Charges Directive that would draw on the working papers of the Thessaloniki Forum on airport charges.



The baseline scenario is that the Regulation in its present form would continue to apply.


Policy options could be a combination of different measures to demonstrate different degrees of policy ambition. Subject to further analysis, scoping and screening during the impact assessment, the policy options could include the following categories of measures, or a combination of them:


1.Provide the suitable regulatory framework for airlines to compete and provide for connectivity and efficiency 


Measures to maximise the use of existing airport capacity and slot mobility could be achieved through stricter requirements on slot use or market-based measures, reservation fees and/or penalties. Part of the revenues from market-based measures could be used to: (i) modernise (including greening) airport infrastructure and capacity; and/or (ii) neutralise costs from market-based measures for those airlines that make the most efficient use of airport capacity.  



2.Improving institutional set-up and improving implementation


Measures to ensure structural and financial independence of slot coordinators, strengthening their monitoring and enforcement powers (e.g. penalties), and uniform and coordinated application of the rules through enhanced and formalised cooperation. 



3.Aligning the legal framework with other Commission policies


Integration of slot coordination with the Single European Sky by improving consistency between airport slots and flight plans. Measures that make it possible to take into account the Green Deal objectives (e.g. earmarking of revenues from market-based measures for e.g. the greening of airports) and other objectives, e.g. connectivity and competition rules.



4.Resilience


Extension and/or clarification of instances where force majeure may or may not be granted by slot coordinators (e.g. pandemic, military conflict, cyber-attacks, environmental catastrophe) and/or where the slot-use threshold may be lowered generally. 






C.  Likely impacts 






Economic impacts: Improving the efficient use of airport capacity will have a beneficial economic impact on airlines and airports, as a healthy competitive market would enable the aviation value chain to thrive through greater competition and connectivity. Stricter slot-use requirements and enforcement measures may, on the one hand, have a negative economic impact for incumbent airlines having to give slots up for others to use; on the other hand, they may have a positive economic impact for those other airlines able to use them. Reservation fees/penalties may increase costs for airlines; however, these could be neutralised for airlines which use slots efficiently (i.e. do not engage in slot hoarding). A more pro-competitive set of rules governing the allocation of slots is expected to foster competition and result in lower prices and better service for consumers.


Depending on the measures chosen to improve the institutional set-up of coordinators, this could affect the way they are currently funded. If the scope of their monitoring and/or enforcement activities increase, more resources may be necessary.


Social impacts: Improved use of airport capacity and competition may increase throughput of passengers, increasing connectivity in terms of frequencies and/or number of routes. Effective competition between air carriers may translate into more choices and frequencies for passengers. A dynamic and competitive market may also bring positive results for workers.


Environmental impacts: To the extent that measures to improve airport capacity may lead to an increase in air traffic, this may have negative impacts on the environment and climate (e.g. in terms of additional greenhouse gas emissions, noise, air quality, biodiversity, etc.). 


Fundamental rights: No impact expected.


Simplification and/or administrative burden: Clarifications, in particular of definitions, may facilitate administrative processes and thus ease the administrative burden. However, increasing the scope of enforcement for coordinators may increase the administrative burden. 






D. Better regulation instruments 






Impact assessment 






An impact assessment will be carried out to support this initiative and to inform the Commission’s decision. It will aim to update and supplement the findings of the 2019/2020 fact finding study on slots and the study on the impact of COVID-19 on aviation. 






Consultation strategy 






A 12-week open public consultation will be conducted to collect the views of the general public, via the Commission’s central webpage for consultations Have your say. Replies can be made in any of the 24 official EU languages. Following the consultation, a factual summary report will be published on the consultation page within 8 weeks. 


Targeted consultation activities with the most affected stakeholders, as part of an external support study, will help maximise the evidence base. 


A dedicated workshop will be held to discuss policy options in late 2022 or early 2023.


A summary report of all consultation results will be prepared as part of the impact assessment support study.






Why we are consulting?






The purpose of the consultation is to collect evidence, experiences and views from stakeholders. This will enable the Commission to give due consideration to the relevant information on the problems and potential solutions when carrying out the impact assessment for the Slot Regulation.






Target audience






The Commission seeks to gather input from a broad range of stakeholders, including national authorities, air carriers, airports, slot coordinators, consumer and environmental associations, as well as from the general public.