Major airlines’ monopoly over lucrative airport landing slots could be at risk as the government explores reforming the system following the UK’s exit from the European Union.
The Department for Transport (DfT) today launched a consultation on how airport slots are allocated with an eye to giving passengers “smoother getaways and cheaper prices.”
Slots operate like parking spaces for planes, managing capacity and giving airlines permission to use the full range of airport infrastructure for a set period of time.
Change to slot leasing mean spaces, largely owned by big carriers such as British Airways and Easyjet, could be handed to smaller competitors with cheaper prices if they are not used after a set period.
The UK currently operates under a system based on EU regulations. The government said in its statement that aviation should “no longer be shackled by an outdated” regime, which has remained unchanged over the last two decades.
Aviation Minister Anthony Browne said: “For decades the UK aviation industry was subject to European rules that didn’t have the UK’s interest at heart, but as it goes from strength to strength following the pandemic, it needs a system that will empower it – not constrain it.
“This consultation will bring the sector to the forefront of decision-making, helping to end monopolies within the slot regime, drive healthy competition between airlines and make the aviation sector more dynamic for the future while also benefitting millions of passengers.”
WILL COMPETITION BRING CHEAPER FLIGHTS?
Both British Airways and Easyjet, the dominant airlines at Heathrow and Gatwick respectively, declined to comment on the consultation when approached by City A.M.
The proposals come amid concern over rising air fares globally, influenced by a combination of aircraft production issues, soaring demand for travel and the transition to renewable fuels.
European air fares increased by between 20 to 30 per cent over the summer, compared with their pre-pandemic equivalents, according to data from the European Union released following a parliamentary question.
Karen Dee, chief executive of the Airport Operators Association, said: “Slots reform is an opportunity to improve the efficiency of the UK aviation system and this consultation is a welcome step in that direction. “
But experts questioned the suggestion that increased competition over the spaces would bring about cheaper flying.
Paul Charles, chief executive of travel consultancy The PC Agency, told City A.M. the review would be “hotly-contested by airlines who have baked in slot values into their balance sheets”.
“Some carriers may benefit from more open ‘trading’ of slots but I can’t see how consumers will see fares come down due to this review. Pricing is more dictated by inflation, fuel prices and airport passenger fees,” he added.
John Grant, a senior analyst at aviation analytics firm OAG, said the proposals would not necessarily affect pricing. “Changing the UK slot rules won’t result in any more capacity at the UK’s major airports and that is what drives pricing ultimately.”