Slots trading An airport perspective Jean-Yves VALIN Corporate strategy and Quality director Aéroports de Paris 1 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
1. Paris-Charles de Gaulle and Paris-Orly airports capacity and slots allocation 2. Evolution and perspectives regarding slots allocation 2 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
Three highly complementary airports Business airport Paris - Charles de Gaulle Paris - Le Bourget Leader in business aviation Airport dedicated to medium to long-haul 2/3 Origin/Destination traffic 1/3 transfer traffic Major hub for Air FranceKLM and SkyTeam European base of Star Alliance and oneworld Short-haul and Origin/Destination ( O/D ) airport Paris - Orly 78,7 m passengers in 2005 (+4,4% vs 2004) 461 airlines 3 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006 Main destinations: Î Continental France Î French overseas territories Î North Africa Î Southern Europe Î Long-haul leisure charters
Paris-Charles de Gaulle 4 runways in use Maximum 108 slots/hour (due to increase up to 120 in 2010) Traffic in 2005 : 53,8 M passagers 475 982 movements (excluding freight and mail) Airport for long-haul flights, point to point or in transfer. Specific issue regarding slots allocation : multiple passenger terminals each one having its own capacity limit 4 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
Paris - Charles long-term prospects horizon (2025) CDG1 TGV Renovation Expansion * * * T4 (2016-2020) * Estimated capacity A1 CDG2 S4 (2012: 7.2m pax)* T2G 4 runways / 3,257 ha 5 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
Paris - Orly 3 runways in use Maximum 70 slots/hour Traffic in 2005 : 24,9 M passagers 223 000 movements Very efficient airport for O/D passengers Specific importance of slots allocation : Administrative limitation 250 000 slots/annum Slot = access to the market 6 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
Paris Airports now develop in a clear regulatory framework 5-year contract with the French State (economic regulation agreement) 1st contract in force until 2010 Central assumptionof the economic regulation agreement 2006-2010 CAGR of + 3.75% Our main targets : Match air traffic growth Enhance the attractiveness of the hub system Optimize the operational and commercial performance of existing facilities 7 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
1. Paris-Charles de Gaulle and Paris-Orly airports capacity and slots allocation 2. Evolution and perspectives regarding slots allocation 8 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
Which choice? A system of an old age A system which may not be economically optimized But a system which is safe and has proven its ability to increase competition (Easyjet is the second operator in Paris) A system ensuring operational continuity and stability A modern system based on economic value A system which could optimize the use of scare capacity But a leap into the unknown (Will it create unstability, speculation, and at the end of the day provide a poorer service to the customer?) 9 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
Aéroports de Paris favors a cautious approch. Improve the the present system (see ACI position) Some ways : - strengthening the «use it or lose it» rule by raising the slot usage rate to at least 90 % - enhancing the role of the Scheduling Performance Monitoring Committees - replacing the new entrants priority by local rules - introducing a reservation fee. Act progresively with adequate safegards. Keeping in mind that that the main issue is how to increase capacity 10 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
A number of questions to be clarified, among which Should slots be sold to the highest bidder to garantee nondiscrimination? Which impact on new entrants versus concentration? Could companies other than airlines be allowed to buy and sell slots? How could it be garanteed that secondary trading does not breach the airport s capacity limits? What role for the coordinator : a market regulation authority? Can a secondary market coexist with an administrative system allocating new slots for free? 11 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
Conclusion As an airport operator our fundamental interest is Serving the customer needs While ensuring the best use of our investments : this is a common interest for our industry stakeholders Make sure slots are delivered to the airlines which provide the best value to the customer and therefore to the industry Manage the capacity limitations These are our main drivers in the slot allocation debate 12 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006
13 - EUACA SEMINAR ON SECONDARY TRADING - 28 JUNE 2006 Thank you for your attention.