Formal Ownership and Leasing Rules for Slots
Airport slot policy in the European Union remains controversial. Today’s system, despite years of dedicated effort to reform it, may thus still suffer from inherent aws. In particular, there is a problem of ill-dened property rights in slots. This chapter explores a different formal approach to slot ownership (as well as leasing and sub-leasing) designed to simplify and, arguably, deregulate the commercial position of slots. The following aspects are discussed in this chapter:
the problem;• a proposed solution;• pros and cons from the standpoint of key stakeholders;• issues of transition from today’s system.•
The problem can be outlined by way of offering six propositions:
a slot is a time-specied reservation of airport capacity;1) for a commercial operator, such a reservation is a means of production;2) when held recurrently across time slots acquire property attributes (requiring 3) an airline to surrender such slots thus constitutes a ‘taking’); under current regulation, the slot property value is difcult to realize (EU 4) ‘transfer’ restrictions hinder if not forbid buying and selling); such a slot market is essentially a 5) secondary market; that is, financial transactions tend not to occur between suppliers and users (primary slot rights, particularly in the congested markets, are allocated by a slot coordinator rather than being market-determined by transactions between suppliers [the airports] and users [the aircraft operators]); deregulation (meaning here essential reliance on market forces to stimulate 6) supply rather than using administrative allocations to distribute it) will not succeed without direct participation of producers in buying and selling.