Low-cost Spanish airline Vueling has been awarded 18 new slots at Paris Orly airport. The airline will operate 18 additional daily flights from November thanks to an EU commission ruling related to Air France.
Ensuring fair competition
The 18 new slots come courtesy of Air France, which was forced to give up the slots by the European Commission (EC). The French carrier is forfeiting its slots because it received a €4 billion ($4.7 billion) loan from the French government back in April. The loan was meant to help the struggling French carrier cope with the impact of the ongoing pandemic but gave the airline an unfair advantage.
The EC ruled yesterday that the loan would stand as legal if the airline gave 18 take-off and landing slots at the Paris airport to Vueling. This would give the budget IAG-owned carrier a good hold to compete against Air France.
Margrethe Vestager, who oversees competition policy for the EC, said:
“This will enable Vueling to expand its activities at this highly congested airport, helping to ensure fair prices and increased choice for European consumers. It also helps ensure the significant capital support to Air France enabled the airline to face financial difficulties resulting from the coronavirus outbreak, without unduly distorting competition in the single market.”
Giving up slots for funds
Back on April 5th, the EC approved the French government’s plan to recapitalize Air France. However, it came with the condition France had to put in place additional measures to ensure fair competition across any markets in which Air France’s improved financial situation could have an impact.
In response, France suggested several in-demand slots at Paris-Orly airport. The airport is famously congested, and getting slots is challenging. The EC ruled that 18 slots needed to change hands and go to a single carrier “to enable the lasting entry or expansion of a competing carrier at this airport, to the benefit of consumers.”
On June 25th, the Monitoring Trustee called for airlines to submit proposals for the slots. Vueling was just one of several airlines that wanted the precious slots. The only rule was that whichever airline gets the slots has to base aircraft at the airport. It should also already have operations at the airport.
The EC and the trust then looked over all the proposals to judge which airline would provide the most competition. Vueling won. This means Vueling and Air France can now go ahead and finalize the agreement allowing Vueling to expand existing operations.
Vueling has been operating flights to Paris-Orly since 2016. Behind Air France and sister airline Transavia, it is the largest operator at the airport. This makes it the best choice to pose real competition for Air France.
No doubt other carriers won’t be happy with the decision.
What do you think of Vueling’s new opportunity? Would you have given the slots to another carrier? What do you think Vueling will do now? Let us know your thoughts in the comments.