Story ID: CBhololei03192018
EC Aviation Official Urges Slot Allocation Review
By: Cathy Buyck
Caption: Director general of mobility and transport Henrik Hololei sees airlines’ agenda at odds with good public policy
Word Count: 532
European Commission director general of mobility and transport Henrik Hololei has criticized Europe’s legacy airlines for maintaining artificial capacity constraints present in many airports, vowing to put the revision of the EU slot regulation high on the agenda of his department. “We need to modernize and improve it [the EU slot regulation] as we need to incentivize secondary trading and we need better management of scarce capacity," the EC’s top civil servant on transport matters said. “But some operators are actually quite happy with the present situation that guarantees them slots through grandfathering and there is little incentive to change and open up to new entrants and thus increase competition.”

The European Union’s executive arm that proposes new legislation tabled a revision of the allocation rules of airport slots in the EU in 2013, but progress has stalled “because of a rock,” Hololei sighed. The proposed new rules need the endorsement of the European parliament and the council, which represents the bloc’s member states, but the enduring dispute between the UK and Spain over the sovereignty of Gibraltar airport continue to block council decisions on EU-wide airport related matters. Hololei said he had no clear solution yet on how to take the file forward. “[It is] high on our agenda,” he said, however. Current EU slot rules date from 1993.

Hololei’s remarks come as tension between airports and airlines over airport charges intensify. He advised the parties the drop the feud. “It is important that airlines and airports understand that at present and for the future they very much need each other,” he said, noting that in Europe it is “very difficult to build a new runway, never mind a new airport.”

While acknowledging that more consolidation of the European airline industry is unavoidable, Hololei described himself as “absolutely no fan of the U.S. model of consolidation” and argued that European aviation should not emulate it. “In the U.S., the competition on many routes has evaporated to almost non-existent and at some airports, the domination of one of the three big carriers can be more than 90 percent,” he explained. “This is not in the interest of the traveling public and we, as the regulator, should also make sure that we don't help to pave the way for such kind of developments in the European market.”

His views challenge the assessments of CEOs of Europe’s largest airline groups, who call for more consolidation. According to Lufthansa Group CEO Carsten Spohr, Europe’s top five carriers increased their market share from 33 percent in 2007 to 44 percent today. On a global level, the group—which fully owns Lufthansa, Swiss, Austrian Airlines, Brussels Airlines, Eurowings and now large parts of Germany’s second largest airline, bankrupt Air Berlin—represents a mere 3 percent market share. This is “just not enough” and well below the market shares held by big players in other industries, Spohr said. However, for Hololei, a 44 percent market share for the five largest EU carriers together “can stay like that.” Lufthansa last year dropped its bid to buy Air Berlin’s Austrian affiliate after the commission raised competition concerns.