318 COMPETITION LAW IN TOURISM Table 2: Pros and Cons of the slot trading mechanism (exante competition controls) Pros Cons (2.1) Exante evaluation of slot trades • Would close one of the “gaps” in general competition law in respect to slot trades • Merger control is poorly suited to addressing large numbers of small increments in shares of supply • Difficult to associate a single upstream slot trade to a downstream market (2.2) Requiring a sector investigation prior to the introduction of slot trading (at congested airports) • Would allow a full assessment of how best to address the issues raised • Would allow introduction of tailored solutions for individual airports • For those airports with no issues, such investigations could be very quick and less burdensome • This will be time-consuming and delay introduction of slot trading Source: Adapted from Progress Report of the ECA (European Competition Authorities) Working Group on Slot Trading (2005). Another point of consideration is whether there are any simple rules that could be implemented to prevent potential competition issues arising, but taking care not to complicate the system in such a way that it reduces the incentive to sell and buy slots. Nevertheless, evidence shows that there is demand for a carefully designed set of procedures and controls that have a minimal effect on the volume of trade which also needs to be promoted. We believe that auctioning slots to the highest bidder is definitely not the best solution, as it increases costs and uncertainty to the slots process with potentially disastrous outcomes for consumers. We are in agreement with IATA10 when they stated that most likely “it will lead to distortions between carriers and reduce choice and connectivity for consumers, as it may create perverse incentives to reduce the creation of new capacity to keep the values high for those receiving the revenue”. Auctioning would also result in a far less efficient allocation of scarce airport capacity. 10 See IATA Worldwide Airport Slots – Fact Sheet (May 2019).
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