Airport slot suspensions:
easing the pressure for airlines amid Covid-19
Aviation regulators around the world have introduced waivers for airport slot allocation systems, allowing airlines to cancel unnecessary flights without risking their precious slot real estate. How have these relief measures been rolled out around the world, and for how long might they be needed? Chris Lo finds out.
For decades, the world’s busiest airports have used slot allocation to make sure precious slots for take-offs and landings are allocated efficiently, making the best possible use of flight movements to maximise passenger throughput.
The World Slot Guidelines (WSG), published and overseen by the International Air Transport Association’s (IATA) Joint Slot Advisory Group, provide a standardised framework for managing these slots, with the document’s standards evolving since 1974.
According to IATA, there were 204 airports worldwide in summer 2019 that had enough constraint on capacity to require slot coordination, representing 1.5 billion annual passenger departures, or around 43% of global departing passengers.
“Aviation is the most global of industries, so where capacity constraints exist, there is a need for a single, harmonised, global set of guidelines,” notes an IATA WSG document. “The basic principles of slot management are transparency, certainty, flexibility and sustainability. Flights operate between two airports; it’s vital that the rules at both ends work consistently and in harmony.”
Coronavirus has led to flight cancellations and travel bans worldwide.
Among the host of guidelines surrounding airport slot allocation, there is a central tenet – the so-called ‘80-20’ or ‘use it or lose it’ rule. Under normal circumstances, this principle requires airlines to operate flights on at least 80% of their allocated slots, or face losing their rights to operate the slot in the next equivalent season.
But with the novel coronavirus (Covid-19) spreading across the globe and countries implementing increasingly stringent lockdown measures and travel restrictions, these are anything but normal circumstances for airlines and airports. How is the enforcement of slot allocation guidelines changing in response?
Covid-19 chaos and the issue of ‘ghost flights’
Since the Covid-19 outbreak became a global crisis in January, the commercial aviation industry has been in financial freefall, hammered by rock-bottom passenger demand and state-level travel restrictions such as the US ban on inbound passenger flights from most of continental Europe, which came into force on 13 March.
IATA’s latest update on Covid-19’s impacts, published on 27 March, makes for grim reading. The association estimated that around 8,500 passenger aircraft – a third of the global fleet – have been grounded, and year-on-year passenger revenues are on course to decline by $252bn in 2020.
“With most airlines having less than three months’ liquidity, simply surviving this extended period of turmoil will be no simple task for the majority,” the association warned.
While airport slot rules were suspended fairly quickly for affected flights to and from mainland China and Hong Kong following the viral outbreak, in many other regions the rules remained in force through February and early March, leading to the rise of ‘ghost flights’ – empty or nearly empty flights that continued to operate simply to ensure that the corresponding airport slot is used.
Airport slot rules were suspended relatively quickly for affected flights to and from mainland China. Image: B.Zhou / Shutterstock.com
UK airline association Airlines UK told The Independent in early March that one of its members would be forced to run 32 flights up until 25 March with an average load factor of just 40%, representing more than 5,200 empty seats, unless the rules were changed. As UK transport secretary Grant Shapps argued in a 5 March letter to UK slot coordinator Airport Coordination Ltd, ghost flights create immense inefficiencies for both businesses and the environment.
“Such a scenario is not acceptable,” Shapps wrote. “It is not in the industry’s, the passengers’ or the environment’s interest and must be avoided.”
From early March onwards, IATA and the airline industry intensified their lobbying efforts to have 80-20 slot rules suspended for the entire season up to October 2020, arguing that ailing airlines are facing huge uncertainty over whether or not to run flights, and that “flexibility is needed for airlines to adjust their schedules according to extraordinary demand developments.”
Eero Knuutila is Head of Service Development at Helsinki Airport.
Image courtesy: Helsinki Airport
IATA has lobbied to have 80-20 slot rules suspended until October 2020.
It wasn’t only the airlines making the case; the European Airport Slot Coordinators Association (EUACA) was also quick to describe amended slot rules as “necessary”, while noting that the European Commission was the only organisation with the authority to make that decision on behalf of its member states.
European airport slot rules have previously been suspended in 2002, 2003 and 2009 after 9/11, the SARS outbreak and the global financial crisis, respectively. Given the unprecedented disruption being caused by the current pandemic, it’s no surprise that the air transport sector’s arguments around Covid-19 have been broadly accepted.
Simply surviving this extended period of turmoil will be no simple task for the majority
Slot rules suspended worldwide, but for how long?
In March, a flurry of regional, national and international authorities announced alleviation measures related to airport slots, and quickly extended them after the extent of the Covid-19 crisis became clear. Hong Kong’s Civil Aviation Department extended its slot waiver beyond the end of May to October, covering the whole season. The European Commission initially agreed to suspend the 80-20 rule until June as a first step, then on 30 March announced that the waiver would apply up until October.
“It seems clear now that this crisis will not be over very soon,” said Oleg Butković, transport minister for Croatia, which currently holds the EU Council presidency. “Waiving the ‘use it or lose it’ rule until October will help mitigate the heavy economic impact on airlines and give them certainty over the whole summer season.”
In the US, where only three airports – JFK, LaGuardia and Ronald Reagan National Airport in Washington DC – use slot allocation systems, the Federal Aviation Administration waived the 80-20 rule on 11 March, but for now has only committed to do so until the end of May.
Airlines that use schedule-facilitated airports (under which a regulator governs the timing of flights) will also receive relief, as schedule penalties for cancelled flights will not be applied. Schedule-facilitated airports in the US include LAX, Chicago O’Hare, Newark Liberty Airport and San Francisco International Airport.
The taxiway at Mumbai Airport. Image: Wireman27 / Wikimedia Commons
Of course, the slot rule suspensions around the world will create additional organisational challenges for slot coordinators. On 26 March, the EUACA advised airlines that they must cancel slots that they do not intend to operate over the summer 2020 season, so that amended flight schedules can be distributed to other parties that use them, such as airport operators, air navigation service providers and handling agents.
Will October be the outer limit of the airport slot rule suspensions we’ve seen so far? That will be determined by the severity and duration of the Covid-19 pandemic, which at this point is a mystery even to global health authorities.
The European Council has noted that it is set up to extend the waiver quickly through a Commission delegate act “if the current serious situation persists”, and pledged to review these circumstances and report back by 15 September this year.
The light at the end of the tunnel has yet to appear for a beleaguered aviation sector, but the ongoing relief through slot waivers and other mechanisms is at least giving the industry some breathing room to plot their course through a nightmare period that for many operators represents a truly existential threat.
Waiving the ‘use it or lose it’ rule until October will help mitigate the heavy economic impact on airlines