Commentary: EC competition slow to take off

In the early hours of Tuesday morning EC transport ministers reached agreement in Brussels on new regulations governing the allocation of airport take-off and landing slots.

Set against parallel measures to liberalise fares and open up intra-Community services to any airline, the matter of slot allocation might seem an arcane and technical issue.

It goes, however, to the very heart of competition and consumer choice as, without the ability to take off and land at congested airports, new entrants will be able to offer neither.

Sadly, the agreement reached in Brussels, which takes effect in January, represents an overwhelming victory for the established national flag carriers and the more protectionist member states - a combination that keeps European air fares much too high.

The intention of the regulations was to free more space at airports for new entrants and to prevent incumbent airlines from hogging slots.

Instead, their effect may be to legitimise the informal system of 'grandfather rights', an arrangement that permits incumbent airlines to hold on to slots in perpetuity.

In theory, 50 per cent of all new slots - those surrendered, unused, or created - will be pooled and available to new entrants. In practice, established carriers, even if it means operating uneconomic services, will use a sufficient proportion of their slots to ensure that they are not returned to the pool and used by new entrants to provide competition.

The one glimmer of hope in the regulations is that the Commission will be empowered to intervene in the workings of slot scheduling committees at airports where serious problems persist.

If the regulations are to have any impact, then the Commission is going to have a heavy caseload.