310 COMPETITION LAW IN TOURISM 2. THE LEGAL NATURE OF AIRPORT SLOTS: PROPERTY OR CONTRACTUAL RIGHTS? Slots are considered assets to airline companies and they should appear in company balance sheets. A balance sheet reports the dollar or euro amounts of a company’s assets, liabilities and owners’ equity (or stockholders’ equity) as of midnight of the date shown in the heading. Assets that are reported on the balance sheet are the company’s resources, such as cash, accounts receivable, inventory, investments, land, buildings, equipment and some intangible assets. Generally, assets are reported at their cost or a lower amount due to the cost principle, depreciation and conservatism. It is then relatively clear that airlines should value landing slots as assets on their balance sheets and the EU Proposal makes the exchange of airport slots valid while promoting the ‘trade-able’ nature of these rights under EU law. But should these rights be considered as property rights or contractual rights? US law does not recognise slots as property rights: “Slots do not represent a property right but represent an operating privilege subject to absolute FAA control”. We believe the US approach is the correct one. The airline business is heavily regulated, and the existence of a given slot allocated to an airline carrier should not mean any kind of property, but a right granted to use an airport. 3. POTENTIAL COMPETITION CONCERNS IN THE SLOT MARKET The existence of a slot market is not immune to competition concerns, just as in any other market. The biggest concerns are: a) Incumbent airline carriers may use all the slots themselves; b) Or they may sell/lease them: i. At excessive prices; ii. With non-compete clauses; iii. Only at unattractive times; iv. Only to certain airlines; v. At higher prices to stronger competitors; vi. On condition that the airline uses other services. c) Hub carriers are likely to increase their slot holdings at their hub airport based on grandfather rights.
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