Cyriel Ruers and Bas van Os have written the article Misbruik van slots: handhaving op oneigenlijke gronden? (Misuse of slots: enforcement on improper grounds?) in the Tijdschrift Vervoer & Recht (Transport & Law Journal) (2024/4 edition). In the article they outline the framework for the allocation of slots at so-called coordinated airports in the EU, delve deeper into the strict enforcement by the Human Environment and Transport Inspectorate (Inspectie Leefomgeving en Transport; “ILT”) and the questionable legal basis of that enforcement. The article can be found here. This blog summarizes the key aspects and highlights recent developments.
Airport slots: a brief introduction
A slot is the permission to use an airport’s infrastructure to land or take off at a specific time and date. Airports determine the maximum number of flight movements they allow each year under the applicable regulations, based on available capacity. That available capacity may be limited by, among other things, the physical limits of the airport infrastructure (such as the number of runways, gates, etc.), operational and safety regulations, and environmental regulations. The long-running legal battle regarding the reduction of the number of flight movements at Schiphol and the mandatory application of the ‘balanced approach’ have a bearing on this total number of movements.
Within the set maximum, slots are allocated per IATA season to the airlines that request them; this is also known as the slot allocation process. The slot coordinator is in charge of the allocation of slots. In the Netherlands, this is Stichting Airport Coordination Netherlands (“ACNL”). Airlines with so-called ‘historical rights’ have priority on the allocation of slots.
This past decade has given rise to a significant shortage of slots at Schiphol. Since an airline cannot fly without slots, the ownership of a slot is extremely valuable. At the same time, the possibilities for transferring slots between airlines remain limited.
Relevant regulations
The most important rules governing slots are set out (EU) Regulation 95/93 on common rules for the allocation of slots at Community airports (the “Slot Regulation”). In addition to the Slot Regulation, the Worldwide Airport Slot Guidelines (“WASG”) are also relevant to the allocation and use of slots. The WASG are a collection of best practices developed by airports, airlines and slot coordinators for the management of slots.
At a national level, there are also regulations that apply to the use of slots. The Wet luchtvaart (Aviation Act), for instance, contains various provisions on slots. Airlines in the Netherlands must furthermore take into account the Slot Allocation Decree, the Policy Rule on the Enforcement of Slot Misuse at Coordinated Airports (the “Boetebeleidsregel”) and the Slot Enforcement Code (“SEC”).
Slot misuse
The misuse of a slot is also known as a ‘slot deviation’. The ILT, a division of the Ministry of Infrastructure and Water Management, refers to violations of the Slot Regulation as ‘slot misuse’. Slot misuse may be detrimental to the operational and commercial exploitation of an airport. It may also distort the market, because it can bestow an unfair competitive advantage at the expense of competing airlines that do comply with the rules.
It is apparent from ACNL data that slot deviations regularly occur each year at Dutch airports. In 2022, for instance, there were some 700 cases of allocated slots that were not used (known as NO-OPS) and flight movements that took place without a slot having been allocated to the airline in question (known as NORECS).
The causes of slot deviations are diverse and are in many cases not due to intent, but rather to force majeure. They are also often due to simple administrative shortcomings, because a change in an airline’s operations is not communicated to the slot coordinator in time, resulting in the flight not matching the requested slot: the ILT takes the position that slots may be returned no later than on the day of the scheduled flight. If the airline does so at a later time – the next day, for instance – the airline is considered to be in violation. The question whether this strict interpretation of the Slot Regulation is justified, is currently being debated before the District Court of Noord-Holland (Haarlem) in the context of an appeal against a fine imposed by the Minister of Infrastructure and Water Management for alleged slot misuse.
Not every deviation from a slot constitutes slot misuse by definition: the Slot Regulation requires that slot misuse involves both repetition and intentional incorrect conduct before slot misuse can be deemed a violation. The underlying idea is that aviation is inherently subject to external factors that may influence flight planning and are beyond the airline’s control. Unintentional or incidental slot deviations should therefore not be penalised.
The Slot Allocation Decree – which, according to the Minister of Infrastructure and Water Management, is the implementation of the Slot Regulation – provides that airlines may not do the following at a coordinated airport:
- repeatedly and intentionally operate air services at times that differ significantly from the allocated slot;
- repeatedly and intentionally use a slot in a manner that differs significantly from that indicated at the time of allocation of the slot in question;
- repeatedly and intentionally fail to use an allocated slot, known as NO-OPS; or
- operate an air service without a slot having been allocated for that air service, known as NOREC.
Slot Enforcement Code: legal framework for enforcement by ILT
The SEC describes the legal framework on the basis of which the ILT determines slot misuse and the applicable enforcement procedure. The SEC classifies the various practices as slot misuse and sets out the alleged legal basis and conditions for an infringement. According to the ILT, the SEC does not set independent standards, but merely clarifies the existing standards and their application.
The SEC contains a list of nine types of slot misuse: (i) jumping the queue (requesting slots with the intention of obtaining priority in the allocation); (ii) capacity blocking (applying for slots without intending to use them); (iii) late handback (holding slots without the intention to use them); (iv) late retiming (holding slots to prevent another airline from obtaining them); (v) different way OPS (operating a flight in a manner significantly different from the allocated slot); (vi) NOREC (flying without a slot); (vii) unplanned night movement (flying without a night slot); (viii) different time OPS (flying at a time that differs significantly from the allocated slot); and (ix) NO-OPS (not using an allocated slot).
The last five types of slot misuse are partly based on Article 7(1) of the Slot Allocation Decree. The alleged legal basis for this enforcement is remarkable. The SEC cites no fewer than three different legal bases for four types of slot misuse: the WASG, the Slot Regulation and the Slot Allocation Decree. Only the WASG is cited as the legal basis with regard to the first four types of slot misuse.
Enforcement of slot misuse: high fines for airlines
Until a few years ago, it was not possible to sanction slot misuse in the Netherlands. Since 1 July 2021, the Minister of Infrastructure and Water Management has had the power to impose an administrative fine for slot misuse. The purpose of this power to impose fines is to establish effective, proportionate and dissuasive sanctions for slot misuse. The fines for slot misuse can be as high as €670,000 per violation. The actual amount of the fine is set out in the Boetebeleidsregel. The fines vary between €25,000 and €75,000 per violation and differ depending on the type of violation, whether a day or night movement is involved, the noise category of the aircraft, and the type of aircraft.
The first fine decision under this authority was taken on 29 November 2022. Within a year, 11 penalty decisions followed, in which a total of 34 violations were fined. A total of more than €1 million in fines was imposed. These fines were imposed on six different airlines. The Minister thereby imposed a total of more than €1 million in fines in the primary decisions, the largest part of which (€525,000) was for NO-OPS.
In July 2024, the ILT imposed new fines of, again, more than €1 million, whereby a total of 63 violations were penalised. These were imposed on four different airlines for the incorrect use of slots at Schiphol and Eindhoven Airport. The vast majority of the violations related to making flight movements at night with a day slot. The airlines also allegedly failed to use allocated slots. The highest fine was imposed on easyJet, which received four fines in the total amount of €930,000.
These fines are extremely high: not only in absolute terms, but also in relation to the revenue that an airline generates from a single flight. The fines are also remarkably high in light of the administrative nature of some of the violations, such as returning an unused slot the following day.
Unstable legal basis
The basis for enforcing slot misuse is dubious. Although the use of slots is primarily regulated in the Slot Regulation, the ILT’s penalty decisions cite only the Slot Allocation Decree as the relevant legal basis for enforcing slot misuse. These decisions are therefore not based on violation of the Slot Regulation. This is remarkable and gives rise to the question how the Slot Allocation Decree and the Slot Regulation relate to each other.
In the fine decisions, the Minister states that the Slot Allocation Decree was adopted “to enforce” Article 14(4) and (5) of the Slot Regulation. According to the Minister, this means that Article 7 of the Slot Allocation Decree “must be applied on the basis of the interpretation of Article 14 of the Slot Regulation”. This gives rise to the question what the relevant substantive standard is that airlines must comply with: Article 7 of the Slot Allocation Decree or Article 14 of the Slot Regulation?
The situation is further complicated by the fact that Article 14 of the Slot Regulation does not expressly prohibit the non-use of an allocated slot (NO-OPS) or the operation of a flight without a slot being allocated for that air service (NOREC). The Minister also acknowledges that the Slot Regulation does not prohibit the operation of a flight without a slot. The Minister suggests that such a prohibition can be inferred from other provisions of the Slot Regulation. However, those other provisions cited by the Minister in the fine decisions are not directed at airlines.
Now that the Slot Allocation Decision has been adopted to enforce Article 14 of the Slot Regulation and must be applied on the basis of the interpretation of that article, it is difficult to see how this decision can serve as an independent basis for an (express) prohibition of NO-OPS or NORECS. The imposition of fines for NO-OPS and NORECS is therefore at odds with the legality requirement.
Slot Allocation Decree: beyond the requirement of ‘repetition’ and ‘intentionality’?
This applies in particular to NORECS. The Slot Regulation provides that a violation of the prohibition on slot misuse always requires ‘repeated’ and ‘intentional’ acts or omissions on the part of the airline. However, the Minister has imposed NOREC fines on the basis of the Slot Allocation Decree, which does not require ‘repeated’ and ‘intentional’ practices in order to establish slot misuse. This gives rise to the question how the Slot Allocation Decree relates to the Slot Regulation, since it implies that NOREC is a form of slot misuse that has an independent basis outside the Slot Regulation, namely in Article 7 of the Slot Allocation Decree.
This seems at odds with the fact that, according to the Minister, the Slot Allocation Decree was adopted precisely to enforce the Slot Regulation. It remains to be seen whether this approach by the Minister will hold up in the appeal proceedings before the District Court of Noord-Holland and the other appeal proceedings currently pending before the District Court of The Hague.
Outlook
The Minister’s fine decisions addressed above demonstrate that there are serious doubts about the legal basis for the (very high) fines imposed on airlines, in some cases for mere administrative shortcomings that do not materially impact the efficient use of airport infrastructure.
The two pending appeals against the Minister’s fine decisions – before the District Court of Noord-Holland and the District Court of The Hague – are the first test of the very strict enforcement of slot ‘misuse’ in the Netherlands.
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