1 Revised transcript of evidence taken before The Select Committee on the European Union Internal Market, Energy and Transport (Sub-Committee B) Inquiry on AIRPORT SLOT ALLOCATION Evidence Session No. 1. Heard in Public. Questions 1 - 61 MONDAY 19 MARCH 2012 Members present Baroness O’Cathain (Chairman) Lord Bradshaw Lord Brooke of Alverthorpe Lord Clinton-Davis Lord Fearn Lord Haskel Lord James of Blackheath Lord Ryder of Wensum Baroness Valentine Lord Walpole ________________ Examination of Witnesses Witnesses: James Cole, Airport Coordination Limited; Daniel Edwards, Head of Economic Policy and International Aviation, Civil Aviation Authority; Emma Gilthorpe, Economics and Regulation Director, BAA; and Rob Siddall, Policy Director, Airport Operators Association. Q1 The Chairman: Good afternoon, ladies and gentlemen. Thank you very much for coming to give us the benefit of your great knowledge on this study that we are undertaking. First of all, I remind Members to declare any relevant interest the first time that they speak. The session is on the record and is being webcast live, and will be subsequently accessible via the Parliamentary website. The witnesses will receive a transcript of the session to check and correct, and this will be put on the public record in printed form and on the parliamentary website. Before I ask you to put your names on the record, I warn you that 2 we are almost certainly going to be disrupted by a Division on the Health and Social Care Bill. At that stage, we will have to adjourn for about 10 minutes to enable us to get down to the Chamber, cast our vote and come back. I am sorry about that, but it is one of the hazards of coming here. I ask the witnesses to say who they represent for the record, and whether they have a brief opening statement. Rob Siddall: I am Robert Siddall. I am the policy director for the Airport Operators Association. We are the national trade body for UK airports. Our main business is representational work, so we are following the proposed Regulation on slots as part of the overall Airports Package proposed by the Commission. Daniel Edwards: Good afternoon. My name is Dan Edwards. I am head of economic policy and international aviation at the Civil Aviation Authority. We in the CAA have no formal role in the allocation of slots in the UK, but we have a keen interest in this area of policy because of the impacts that it can have on consumers and those using aviation services in this country. James Cole: My name is James Cole from Airport Coordination Limited. We are the slot co-ordinators appointed by the Secretary of State for the five co-ordinated airports in the UK. We also provide services at a further 18 airports in the UK, and we are co-ordinators of airports in Ireland and Poland within Europe, as well as Dubai and Canada. We are practitioners in the allocation of slots. The Chairman: Are you actually a sort of semi-state body, then? James Cole: We are a not-for-profit company limited by guarantee as an independent agency specifically set up to allocate slots. Emma Gilthorpe: My name is Emma Gilthorpe. I am the regulatory director at BAA, which owns and runs, among other airports, Heathrow and Stansted. As an airport operator, we do not have any formal role in the allocation of slots, but we have a very direct impact on the efficient allocation of slots in terms of runway, terminal and stand capacity. Q2 Lord Fearn: Could you please explain the role and responsibilities of your organisation in relation to the allocation of slots? Emma Gilthorpe: The way that it works is that ACL, from which you will hear shortly, co- ordinates slot allocations. As an airport operator, as I mentioned in my opening comments, it is absolutely essential that those slots get allocated in a way that recognises capacity limitations. This will be particularly pertinent at Heathrow, although less so at some of the other airports that are less capacity constrained. Not only do you need the airspace and the landing slot, you also need sufficient capacity to get from the air to the terminal, to park the aircraft once you get to the terminal, and sufficient resources and facilities within each of the terminals at the airport to make sure that passengers can go through the terminal safely, securely and efficiently. That is therefore a critical role in the process of making sure that those slots are allocated purely on the basis of the slot being available, but also that the whole value chain can line up behind that in order to make sure that the passenger has a positive experience going through the airport. Q3 Lord Fearn: So who actually gives the slot? Emma Gilthorpe: The slots are allocated by ACL, from which you will hear very shortly. ACL is governed by a board, and the airlines sit on that board. Interestingly, the airport does 3 not sit on that board, but the board makes the decision based on things it will go through as to how those slots get allocated. Q4 Lord Walpole: Are you the person who decides how many slots you have a day, or in an hour, or whatever? Emma Gilthorpe: We will definitely set the schedule for the winter or summer period. Lord Walpole: You set that? Emma Gilthorpe: Yes. We declare the schedule. The Chairman: By “scheduling”, you mean the number of aircraft flying, rather than their destinations? We think of “scheduled” flights going to destinations. Emma Gilthorpe: The capacity declaration is made by us. It is agnostic to route or carrier. James Cole: ACL is the independent slot co-ordinator appointed, as I said, for five airports in the UK. We are the ones responsible for the allocation of slots. Under the EU Regulation1, the co-ordinator has sole responsibility for the allocation of slots. We do that in accordance with the existing EU slot Regulation as well as worldwide guidelines set by IATA2 and any local rules—we have a number of local rules at each of the co-ordinated airports. We work within that framework. As you have just heard, the airport’s role is primarily in the declaration of capacity, but that is done after consultation with the airport’s co-ordination committee. The co-ordination committee, which consists of the airport operator, ATC, the airlines using the airport and representatives of general and business aviation, provides overall supervision of the slot process. ACL sits as an observer on that committee, and the member state—the CAA or the Department of Transport—can also attend as an observer. That is another key part of the process, in terms of its governance. Q5 Lord Haskel: Thank you for describing how your committee is overseen. There seems to be rather a lot of people who are overseeing. In practice, who oversees you and who appoints you? James Cole: We are appointed by the airport managing body, and that appointment is approved by the Secretary of State for Transport. That is the appointment process. The Chairman: The airport management body—what is that? James Cole: It would be BAA in the case of Heathrow. The Chairman: It is by airport? James Cole: It is by each individual airport, but that appointment must be approved by the Secretary of State for Transport after consultation. In practice, at an operational level, the staff within ACL act in accordance with the regulation as individuals. We have an individual manager appointed to be the co-ordinator for Heathrow. Lord Haskel: So one person is the co-ordinator for each airport. James Cole: Pretty much, yes. Through this co-ordination committee there is oversight of the process, but the actual day-to-day decision making is done essentially by an individual co- ordinator who has an overview of the airline schedules and the capacity situation. But, 1 Slots were initially coordinated by Council Regulation (EEC 95/93) in 1993, later revised in April 2004 by an amending Regulation (EC 793/2004). 2 International Air Transport Association 4 technically, ACL as a company is appointed as the co-ordinator and then, obviously, we employ suitably qualified members of staff to do the job on a daily basis. Lord Haskel: You said that you also do Dubai and Canada. James Cole: Yes, Toronto City Airport in Canada. Q6 The Chairman: So you are really right at the top, and then you have your personnel going into the various airports. James Cole: The basic process is that the airlines submit their schedules to us. We know the capacities from the declarations made by the airport. Our job is to match the two. It is that sort of exercise. The Chairman: It is a pretty powerful position. James Cole: It can be, but it is power used with a very light touch. Daniel Edwards: As I said in my opening remarks, we in the CAA have no formal role in terms of the day-to-day tactical application of the slots regulation, but we are extremely interested in slots policy for a number of reasons. As you can imagine, it reads across to, for example, the competitive structure within airports, how the airport functions in terms of resilience and the number of services it can offer. It links to bilateral air service agreements, for example, and our ability to offer access to airports in the UK even when they are congested. All of those issues and more are affected by slots regulation and by the way in which we interpret that regulation in the UK, so it is an extremely interesting and important part of aviation policy.