“Lower ticket prices or sell slots”

It is appropriate to say it: between two of the largest European airlines, Ryanair and Lufthansa, rags fly. Certainly, however, at least for the second, it is the passengers who do not fly. The German carrier has asked for a revision of the European rules, to respect which it has said it has been forced to fly thousands of empty planes in order to maintain the landing slots in the airports. And Ryanair’s CEO replied: “Lower the prices or sell the slots”. A suggestion that could eventually become a reality, given that the EU does not seem willing to change the rules anytime soon.

In the blue painted blue

There quarrels between the Irish low-cost airline and the German aviation giant arises from the case of so-called “ghost flights”: in summary, the air traffic regulations in force in the EU require airlines to start a certain number of flights, even if without passengers, so as not to lose their “slots” in the airports where they operate, ie take-off and landing rights in a specific time window.

Before the pandemic, this threshold was set at 80%, only to be suspended and then revised at 50% to meet the needs of carriers in a context in which air traffic was suffering a vertical collapse. And, not secondarily, to try to reduce air pollution caused by aircraft. From next March it seems that the threshold will be raised again, to 64%. At the basis of the rule on the use of slots is the rule “use it or lose it” (either use it or lose it). In other words, spaces that are not used above a certain limit can be reassigned to other companies. A measure that serves to encourage competition by contrasting the advantageous positions acquired over time.

Distorted competition?

Now, with the Omicron variant, companies in the sector are having some more difficulties than expected in filling flights (not to mention the pilots forced into their homes by various positivity and quarantines, which have caused various inconveniences in Europe and elsewhere). Therefore, in order not to lose their slots, as happened in the hot months of the first wave of Covid-19, the carriers take off part of the aircraft even when they are empty or half-empty. A number of ghost flights that seems destined to grow in the coming months, according to what was declared by Lufthansa.

This creates a problem on at least two levels: that of the environment and that of competition. If on the first the repercussions are quite obvious, with environmentalists in revolt, on the second the economists observe that the current situation demonstrates how some companies can abuse their dominant position, something that is prohibited by EU regulations. In fact, they note, by flying empty flights airlines are artificially keeping ticket prices high and effectively preventing competitors from entering the market by holding onto their slots.

Question and answer

Carsten Spohr, chief executive of Lufthansa announced that his company will be “forced” to raise about 18,000 passenger-free flights between January and February. And he asked the European Commission to soften the rules on slots, so as not to further strangle a sector whose recovery does not appear too solid and at the same time to avoid “many thousands of useless flights in Europe”.

But as Politico reports, it didn’t take long for Ryanair’s number one, Michael O’Leary, to step up against the competitor. “The solution is simple,” he bluntly stated at Spohr’s address: “Sell the seats. Be quiet, stop complaining and at least allow the taxpayers who saved you (Lufthansa received a “help” of 9 billion from the German government in 2020, ed) some benefit by offering them cheap seats “. Or, he added, the company could directly give up some of its slots and leave them to other companies. In response, a spokesman for the German carrier stated that “Ryanair and Michael O’Leary are obviously ill-informed”.

For its part, Ryanair has spent the last two years arguing in court with the EU executive over the relaxation of the rules on unfair competition that prohibit state aid, proposed by Brussels at the beginning of the pandemic to allow member countries to support the own industries. According to the Irish carrier, this suspension has unfairly penalized the companies that have faced the recession “alone”. However, the interest of the company does not escape: if on the one hand Ryanair has the appropriate business model to keep ticket prices lower, on the other it would be willing to extend its “slot park” to the detriment of competitors in the various airports. ‘Europe.

Brussels is not giving up

For the moment, the Commission holds the point. The current thresholds are “fair”, according to Transport Commissioner Adina Vălean. The lowering from 80 to 50% has “provided airlines with all the flexibility they needed for nearly two years, while ensuring adequate protection of the interests of passengers and airports,” he said, returning the allegations. to the sender. And he pointed out that, according to Eurocontrol data (the European air traffic manager), Lufthansa has operated more than 60% of flights since the beginning of the year compared to the same pre-pandemic period. Which, he argued, is already more than what is required by the EU rules in force, which speak of 50%.

“It is difficult to understand why Lufthansa would need to operate the claimed 18,000 flights, which represent only 5% of its total flights in the winter programming season, to protect their slot portfolio,” reads a letter from Valean to Karima Delli. , chairman of the Transport Committee of the European Parliament, which had asked for the rules in question to be changed.

Furthermore, according to these rules, an exemption “for justified inactivity” is also allowed: that is, if a government imposes restrictions on travel into or out of its territory, the air routes to or from that country must not be maintained to preserve the slots.

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