BAA warns UK capacity issues will negate benefits of EC slot overhaul

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The European Commission's proposals for regulating slot allocation at European airports will fail to create jobs in the UK unless the wider issue of capacity is addressed, airports operator BAA has warned.

Giving evidence to the House of Lords EU sub-committee on the internal market earlier this week, Emma Gilthorpe, economics and regulation director of BAA, said the EC's claim that the legislation would create 62,000 new jobs in Europe between now and 2025 was "at the very optimistic end of what could be achieved".

She warned that it will be particularly challenging to create additional jobs at UK airports, given the capacity constraints, particularly in the south-east of England. "I think if you had 30 years you could achieve something like this," she said.

"Those jobs will only be forthcoming if you can get more people flying in and out of the UK, but you need the infrastructure to support that," Gilthorpe added.

Asked whether she supported a third runway at Heathrow, Gilthorpe said: "Runway capacity is a matter for the government. I hope ministers will put all options on the table."

The EC is proposing to raise the current threshold on "use it or lose it rules" from 80% to 85%, which it said would ensure existing airport capacity is fully utilised by airlines.

But Simon McNamara, deputy director general of the European Regions Airline Association, told the committee this carried a risk that carriers would operate aircraft unnecessarily rather than lose their slot. "It's about finding a balance," he said. "The 80-20 split works quite well and it's used elsewhere in the world. We need a common, global standard."

The legislation will also introduce a market-based mechanism for the "transparent" trading of airport slots among airlines in Europe and reform the rules designed to help new entrants access the market at congested airports.

The latter measure was welcomed by Richard Matthews, EasyJet's head of scheduling, who was also giving evidence: "Under the current legislation, you often have one or two dominant carriers [at busy airports]. The rules don't really encourage operators to allow a strong competitor."

According to analysis carried out by the EC, the changes proposed could be worth €5 billion ($6.6 billion) to the European economy and would allow the system to handle an additional 24 million passengers per year by 2025.