Preserving networks for a stronger recovery

The Worldwide Airport Slot Guidelines (WSG) are in the spotlight. The slot waivers granted to airlines during the crisis were essential to maintaining flexibility to meet demand

But as the industry recovery continues, governments — prompted by airports — are scrutinizing the system to determine the best way forward.

The focus is the 80-20 rule that says an airline must use its slot 80% of the time to keep it for the following season. Airports say the 20% potential non-use is too high and leads to inefficiency, and they argue that not enough new entrants have access to key airports and so the figure effectively limits competition to the detriment of consumers.

But the evidence contradicts both points. London Heathrow (LHR), Frankfurt, Amsterdam, and Singapore are all slot-constrained airports that operate at more than 95% efficiency.

It shows that the balance of the 80-20 slot system hits exactly the right note between optimal efficiency and flexibility. After all, schedules should match demand and demand is never 100%. It varies according to season, public holidays, time of week and much more.

As for new entrants, when a small number of slots became available at LHR recently, they went to six airlines with huge route diversity, increasing competition. The WASG process results in diverse access, balancing the needs of current airlines and new entrants. Moreover, low-cost carriers were born into the slot era and have flourished. easyJet is now the biggest operator at London Gatwick and the same is true of Ryanair and Wizz Air in key destinations.

Managing capacity

“The WASG has worked well at slot-constrained airports for many years and airlines are confident that it can again be a fundamental pillar as the industry recovers,” says Lara Maughan, IATA’s Head, Worldwide Airport Slots. “80-20 is fit for purpose for the foreseeable future. It takes time to set up routes and airlines need to have certainty that they can deliver on their network promises sustainably. “

Nevertheless, she stresses that potential enhancements to the WASG are always being considered and adopted. Revised definitions for new entrants will give them even greater priority, for example. And performance monitoring has been strengthened to ensure airlines use their slots correctly.

Airlines are also open to enhancing guidelines surrounding Level 2 airports to better deal with peak levels. This would be a more efficient option than the creation of a Level 4 for super-congested airports and would preserve the existing system. Brazil was considering moving Congonhas Airport into a completely new Level 4 category, but concluded it wasn’t the right decision.

Maughan says airports must also do a better job of managing and declaring capacity. Slots are necessary because existing infrastructure isn’t up to the job. The situation is exacerbated by airports not correctly stating their capacity.

“Airports must declare their capacity correctly as that is what the coordinator uses, whether it is 10 slots an hour or 60,” says Maughan. “But we see that with some airports the figure hasn’t changed for a decade. That can’t be right when the route mix and fleets change each season. “

Airports must consider the schedule mix too. There is full visibility on this as slots are tied to aircraft type and destination and changes need to be approved. One of the recent issues with congestion at Amsterdam Schiphol, for example is the preponderance of direct intra-European flights compared with transfer flights. This led to different passenger flows and significant departure queues.

Airports need to understand that schedules are a fluid process. Maughan likens it to a restaurant business knowing how many covers they will do in an evening but not knowing the timings or the composition. It may be one big table arriving early or several smaller tables later on. “It makes a difference to how you might staff, how you arrange the tables, and so forth,” says Maughan.

One area that has finally been taken off the menu is slot auctioning. “Auctioning is only a debate for everyone not involved in slots,” insists Maughan. “Nobody in the industry thinks auctioning is a viable solution and it is time to drop the idea.”

Global process

More than all these details, however, is the need for a global harmonized system. As countries came out of the pandemic, travel restrictions and slot waivers changed. This has led to an enormously complicated situation with one set of rules in the country of departure and another set on arrival. It has highlighted the criticality of a worldwide system.

And though an airport has only its own market to consider, it is an airline that must connect all the dots.

“We all saw how valuable flexibility in the global system was during the crisis,” says Willie Walsh, IATA’s Director General. “It preserved networks when government decisions made demand disappear. We still need that flexibility because the world is still far from normal. But even more critically, we cannot let governments forget the importance of a global standard approach for slots.

“The reminder is timely because the UK and EU plan to review slot rules this year. Is there anybody who believes they will reach the same conclusion? Different outcomes will put the predictability of the global system at risk. Brazil offers a good example. It strengthened its regulation by working within the framework of the Worldwide Airport Slot Guidelines. It’s the way all governments need to work. “

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