Aircraft

British Airways is prepared to slash more capacity if the European Union extends its suspension of the "use it or lose it" slot-allocation regulation.

In early May the European Parliament agreed to suspend the regulation, which requires airlines to surrender slots not being used at least 80% of the time, for the summer 2009 season.

But BA had already made a decision to reduce capacity this summer by 2.5%. "Unfortunately the European Parliament only voted on the alleviation on 4 May so it was far too late from a planning point a view," says BA chief Willie Walsh.

The carrier is hoping the Parliament will extend the suspension to cover the winter 2009-10 season. "If we saw alleviation of the slot rule for the coming winter we would reduce capacity beyond the 4% [winter cut currently planned]," says Walsh.

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But he is pessimistic on the prospects of this happening quickly enough for BA and other European carriers to reduce capacity further this winter. He says Parliament has indicated it "wants to see a full impact assessment on the consumer" before voting on a possible extension of the current moratorium.

"The timescale for that will likely go beyond the decision point for most airlines," Walsh says, adding that, for now, BA "assumes the slot rules will remain in place". He points out that, before the onset of the downturn, BA had planned to grow capacity by 5.3% in winter 2009-10.

While BA is grounding Boeing 747s and 757s as part of the reduction, it plans to raise its short-haul capacity next winter to protect its slots at Heathrow. Walsh says capacity is only down 2% at Heathrow overall, compared with 14.5% at London Stansted.

"That's largely because most airlines operating at Heathrow are so protective of their slots," he adds. "A lot of capacity is coming out of the London market but it's not coming out of Heathrow. The main reason for that is the slot values."