Written by Ariane Dyser,
On 13 March 2020, the European Commission adopted a legislative proposal to amend Regulation 95/93 on common rules for the allocation of slots at EU airports. The proposal responds to the rapid spread of cases of Covid-19, caused by a novel coronavirus, that has led to a substantial drop in the number of flights and forward bookings. It seeks to support airlines by temporarily suspending slot usage rules.
Under current rules, airport slots are allocated by independent coordinators, for summer or winter scheduling seasons. To keep their slots and retain them in the next corresponding season, air carriers are compelled to use them at least 80 % of the time over the scheduling period for which they have been allocated (a convention known variously as ‘historical slots’, ‘grandfather rights’ or the ’80-20 rule’). Otherwise, the slots go back into the slot pool for allocation, with the slots which are under-used by air carriers then reallocated (known as the ‘use it or lose it’ rule).
The spread of Covid-19 around the world has already had severe implications for the air transport sector. The European Organisation for the Safety of Air Navigation (Eurocontrol) indicated there was a 10 % decrease in the number of flights for the first two weeks of March 2020 compared to 2019, and European airports predict a loss of 67 million passengers in the first quarter of 2020. Moreover, according to the International Air Transport Association International (IATA), air carriers were reporting large falls in forward bookings. The putting in place of travel restrictions, notably the coordinated temporary restriction of non-essential travel to the EU for a period of 30 days, in order to contain the spread of the virus globally, has meant the numbers of flights being operated has fallen dramatically.
As slots are an essential economic resource for airlines, air carriers may initially have been inclined to operate flights with very low load factors (or ‘ghost flights’), to protect their ‘grandfather rights’, thus increasing financial losses and the adverse impact on the environment. Hence, the importance of temporarily neutralising the ‘use it or lose it’ rule, to mitigate the impact of the crisis and provide legal certainty to air carriers. Temporary suspensions have been used in the past: in 2002 following the 9/11 terrorist attacks; in 2003, following the Iraq war and the SARS epidemic, and in 2009 in response to the economic crisis.
European Commission proposal and next steps
The objective of the legislative proposal adopted by the Commission is to suspend the ‘use it or lose it’ rule for slot allocation. The main provision of the proposal is that coordinators would consider slots allocated for the period from 1 March 2020 until 30 June 2020 as having been operated by the air carrier to which they had initially been allocated. In other words, the non-utilisation of slots allocated for this period should not cause air carriers to lose the historic precedence they would otherwise enjoy. The same approach would apply to slots used for flights between the EU and the People’s Republic of China or between the EU and Hong Kong, for the additional period from 23 January 2020 until 29 February 2020. The proposal would empower the Commission to extend the period during which the measures would apply, by way of delegated acts, for which an urgent procedure would be used.
The proposal, which will have retroactive impact, needs now to be adopted urgently by the European Parliament and the Council of the EU.
Read this ‘At a glance’ on ‘Suspension of EU rules on airport slot allocation‘ in the Think Tank pages of the European Parliament.