Explanatory Memorandum to COM(2020)111 - Amendment of Regulation (EEC) No 95/93 on common rules for the allocation of slots at Community airports - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2020)111 - Amendment of Regulation (EEC) No 95/93 on common rules for the allocation of slots at Community airports. |
|---|---|
| source | COM(2020)111  |
| date | 13-03-2020 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Regulation (EEC) No 95/93 1 sets the rules on the allocation of slots at EU airports. Its Article 10 contains a “use-it-or-lose-it” rule, whereby air carriers must use at least 80% of their allocated slots within a given scheduling period (summer or winter) in order to keep precedence in respect of the same series of slots within the corresponding scheduling period of the next year (so-called “grandfather rights” ).
The outbreak of the SARS-CoV-2 virus is having a serious impact on air carriers leading to a significant decline in air traffic worldwide since the beginning of 2020. For European air carriers this impact first became evident for flights to and from the People’s Republic of China and Hong Kong Special Administrative Region of the People's Republic of China in January 2020, but the spread of the virus since January 2020 has led to a more generalised deterioration including in Europe. It is not possible to predict the further development of the epidemic or the duration of its impact.
However, given the decline in passenger demand, air carriers have already started and continue to cancel flights which, for the winter 2019-2020 and summer 2020 scheduling periods, will result in slot usage below the 80% threshold imposed by the Regulation.
After 3.3% average annual growth in passenger numbers in Europe between 2009-2019, Eurocontrol has indicated a 10% drop in the number of flights in the first two weeks of March 2020 compared to the same period in 2019. Given the decreasing demand caused by the crisis, most European air carriers are grounding aircraft. This suggests that the fall in the number of flights will be sustained. The negative year-on-year trend extends into the summer season, for which, according to IATA, air carriers are experiencing a 40-60% year-on-year drop in forward bookings for the period March-June 2020 for non-Italian routes with a somewhat larger impact on short-haul than long-haul routes. Bookings on Italian routes have dropped by over 50% in early March 2020 with load factors as low as 40%.
For their part European airports are predicting a loss of 67 million passengers in the first quarter of 2020. This phenomenon is seriously affecting air transport across the Union.
On the basis of the information currently available from Eurocontrol, from air carriers and from airports, it is reasonable to assume that the current situation, characterised by an exceptional fall in demand, will last at least for the months of March, April, May and June 2020.
However, under the slots regulation, in order to guarantee allocation of the same slots in respect of the same season the following year, air carriers are obliged to use slots at least 80% of the time over the scheduling period for which they have been allocated. In the absence of any measure neutralising, for the purposes of this calculation, the effects of the current circumstances, it is likely that air carriers will operate many flights with very low load factors in order to protect their grandfather rights, thus exacerbating financial losses and causing an adverse impact on the environment.
Under Regulation (EEC) No 95/93, the slot coordinator is the sole person responsible for the allocation of slots and is obliged to act in accordance with the Regulation [Article 4(5) thereof]. In respect of their task of slot allocations, coordinators are independent and not subject to instructions from any party.
Under the circumstances described, Regulation (EEC) No 95/93 should be amended so as to protect the grandfathering rights of air-carriers for those slots that have not been used during the period when the aviation market has been most affected by the outbreak of the SARS-CoV-2. The period proposed covers the four-month period between March 2020 and June 2020 for all flights. Additionally, given that the severe impact of the outbreak of the SARS-CoV-2 virus became apparent first in the People’s Republic of China and Hong Kong Special Administrative Region of the People's Republic of China, it is proposed to protect during a longer overall period the grandfathering rights for slots used for air services to and from those markets. The additional period starts on 23 January 2020, the date on which the first airport in the People’s Republic of China was closed by the authorities.
This amendment would come in form of a rule whereby coordinators shall consider slots allocated for the reference periods in question as having been operated. This rule would mitigate the effects of the current crisis and provide legal certainty to the air carriers for the relevant parts of the scheduling periods. Any slots freed by air carriers as a result could be reallocated by coordinators according to needs. By nature, any such reallocation would have an ad hoc character only and would not affect the position of carriers that, under the rule proposed, would be deemed to have operated the slots in question.
The nature of the current circumstances makes it difficult to predict with any degree of certainty when the public health situation will return to normal and consumer confidence returns. Prolonging the proposed measure for the entire summer 2020 season (which ends on 24 October 2020) could be disproportionate to the clearly-defined objective should the situation indeed to return to normal in the intervening period. For this reason it is proposed to empower the Commission to extend the period during which the measures are applicable, by way of delegated acts, where necessary. The Commission should base any such decisions on the latest available information, published by the EU Network Manager at the European Organisation for the Safety of Air Navigation (‘Eurocontrol’), and on relevant scientific advice.
• Consistency with existing policy provisions in the policy area
Regulation (EEC) No 95/93 does not address the problems that air carriers are facing due to the outbreak of SARS-CoV-2 in relation to their possibilities to maintain their slots for following scheduling periods. The Regulation should therefore be amended so as to mitigate the effects of the current crisis, to provide legal certainty to air carriers and maintain the unity of the European slot allocation system.
• Consistency with other Union policies
The effective functioning of the internal market in aviation and related services depends on the economic performance of the air carriers. The negative economic consequences of the current SARS-CoV-2 outbreak for air carriers could endanger their financial health and have serious negative effects on the transport system and the economy as a whole. The amendment of the slot Regulation to address the major current concern of air carriers is therefore of utmost importance.
The measure also serves an important sustainability objective as it removes the incentive for air carriers to operate flights with low load factors merely to protect their slots.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
This initiative is based on Article 100(2) of the Treaty on the Functioning of the European Union. That provision permits the adoption of all appropriate provisions for air transport and already served as a basis for the adoption of Regulation (EEC) No 95/93.
• Subsidiarity (for non-exclusive competence)
The objectives of the proposal cannot be sufficiently achieved by the Member States for the following reasons. Regulation (EEC) No 95/93 does not allow Member States, for reasons such as those in question here, to oblige coordinators to consider unused slots as operated. This objective may be achieved only through an amendment of the Regulation itself by the Union.
• Proportionality
The proposal does not go beyond what is necessary to achieve the objective of alleviating the impact of the current SARS-CoV-2 outbreak for the purposes of the operation of Regulation (EEC) No 95/93. The proposed measure is therefore proportionate including in respect of its application in time for the different types of destinations.
• Choice of the instrument
In order to achieve its objective, the legal instrument must be of direct and general application, in the same way as is Regulation (EEC) No 95/93 itself. Therefore, the appropriate legal instrument is a Regulation.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
This is an urgent measure which is triggered by the sudden and unforeseeable outbreak of the SARS-CoV-2 virus and consequent spread of Covid-19 disease. For this reason, the measure is not relevant for the regulatory fitness programme and no ex-post evaluation has been carried out.
However, this measure is similar in scope and effect to previous amendments of Regulation (EEC) No 95/93 triggered by other emergencies. These included the following:
–in 2002 in the aftermath of the 9/11 terrorist attacks (Regulation (EC) No 894/2002);
–in 2003 following the Iraq War and the outbreak of severe acute respiratory syndrome (SARS) (Regulation (EC) No 1554/2003); and
–in 2009 in the midst of the global financial crisis (Regulation (EC) No 545/2009).
• Stakeholder consultations
Given the urgency of the matter formal stakeholder consultation has not been carried out. However, both Member States authorities and stakeholders have called upon the Commission to adopt a proposal for appropriate measures in the context of Regulation (EEC) No 95/93.
• Collection and use of expertise
As explained, the proper collection of expertise was not possible due to the urgency of the situation. However, the Commission has drawn on experience gained through the application of and amendments to Regulation (EEC) 95/93 that also included consultations with experts.
• Impact assessment
Given the urgency of the situation, an impact assessment has not been carried out. This measure is similar in scope and effect to previous amendments of Regulation (EEC) 95/93 triggered by other emergencies. The measure is designed to alleviate financial losses suffered by air carriers as a result of the “use it or lose it” rule and reduce the adverse impact on the environment.
• Fundamental rights
Not applicable.
4. BUDGETARY IMPLICATIONS
Not applicable.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The measure does not include any specific monitoring or reporting arrangements, however the Commission should be obliged to follow the development of the SARS-CoV-2 outbreak and its impact on air transport and if necessary be empowered to adopt a delegated act extending the time periods concerned by the measure.
• Detailed explanation of the specific provisions of the proposal
Article 10a is replaced with a new article to oblige the coordinators to consider that for the purposes of assessing accrual of grandfathering rights, slots allocated for the period from 1 March 2020 until 30 June 2020 have been operated by the air carrier to which they had initially been allocated. An additional, earlier period is included in respect of slots used for flights between the EU and People’s Republic of China or between the EU and Hong Kong Special Administrative Region of the People's Republic of China (from 23 January 2020). As a condition, in respect of cases following the entry into application of the proposed Regulation, any such slots have to be returned to the slot coordinator. Returned slots which are subsequently reallocated to other air carriers would not be eligible for grandfathering for the air carrier operating them.
Article 10a also empowers the Commission to adopt delegated acts if the crisis linked to the outbreak of SARS-CoV-2 is not resolved and continues to have a negative impact on air transport, including on the slot grandfathering rights. Given the rapidity of the development of the outbreak, it is necessary that the delegated acts are adopted through an urgency procedure.