Reforming Airport Slot Allocation in the context of the COVID-19 crisis
Aidan Flanagan, ACI EUROPE’s Head of Safety, Capacity, ATM and Single European Sky
The effects of the COVID-19 crisis on aviation have been profound, and have been directly manifested in the slot allocation process. Waivers and alleviation measures have been standard practice since February 2020, with airports seeking to ensure protection for routes from the effects of the pandemic while ensuring that connectivity, competition and airports’ financial viability are also secured.
The experience of the COVID-19 crisis demonstrates that the case for reform of the EU Slot Regulation, as advocated in ACI EUROPE’s Position Paper on Airport Slot Allocation, remains valid and is even, in some respects, enhanced. The issues identified with the Regulation are still there, and will be evident when the “normal” 80/20 rules return in the Winter 22 season.
Europe will have 106 out of a total 198 Level 3 airports worldwide in the Summer 22 season, a higher number and percentage (53.5%) compared to when this Position Paper was first published (50.1% in S19, or 104/204). This shows that, despite the crisis, congestion at European airports remains a critical, and worsening, problem, and its effects just as pronounced.
Airports remain committed to developing their connectivity as a key strategic goal, which should be enabled by the slot allocation process. The experience of the COVID-19 crisis has threatened this objective, due to market closures and airlines rationalizing their fleets and networks while at the same time maintaining historic slots since S19 thanks to waivers and other alleviation measures.
The future Slot Regulation will need to ensure that connectivity of airports and their regions is paramount and minimize the risk to this connectivity from crises such as this one. This may include prioritization of connectivity in allocation decisions, and allowing a distinction to be made on a route-by-route or market-by-market basis when adopting alleviation measures, for instances such as during COVID-19 where short-haul and long-haul markets have been affected differently by the crisis.
This has been underlined by the initiatives of some Member States to provide financial support for air connectivity and to seek EU measures to address the connectivity gap which has resulted from the pandemic. Deteriorating air connectivity has ramifications for Europe’s economic recovery post-COVID and the free movement of citizens. However, the effectiveness of such initiatives will be blunted if not properly aligned with slot rules and if access to airport capacity is blocked through a lack of new slot availability.
The need to preserve and promote airline competition also remains key to the strategic goals of airports. The lengthy period of alleviation measures has presented the risk of incumbent carriers consolidating their slot portfolios at the expense of competitors and new entrants. The fact that Regulation 2021/250 amended the New Entrant rule so as to enable a broader definition of new entrants during the alleviation period was a response to this risk, and underlines the necessity of such a reform on a permanent basis.
The practice of airlines seeking to prevent entry by competitors, by maintaining slot portfolios which are protected by waivers and alleviation measures without the intention of operating their slots, must also come under scrutiny in the revision of the Regulation. This compromises vital air connectivity and its economic and social benefits, as well as the clear detrimental impact on free competition.
Other lessons learned from the COVID-19 crisis include the benefits of transparency and engagement with slot coordinators, particularly as relates to the application of force majeure provisions and allocation decisions. The revised slot regulation must ensure that this transparency is commonplace through clear binding requirements. It is also vital that application of the “double-dip” is ended as a practice in Europe, so that when the normal rules are reinstated post-pandemic, 80% really means 80%.
The post-pandemic aviation market will likely be characterized by the further consolidation and possible bankruptcies of existing airlines, expansion of insurgent carriers and the creation of new ones. This new reality will underscore the need to develop a slot allocation regime which is resilient to future disturbances and which is fit for the current and future aviation market. Several of these issues are the subject of a series of Working Papers developed by ACI EUROPE to accompany the Airport Slot Allocation Position Paper. These papers, covering Airline Bankruptcies, the Double-Dip, New Entrants, Secondary Slot Trading and Setting of Declared Capacities expand on some of the points raised in this Position Paper and raise areas of concern which should be examined in the process of revising the EU Slot Regulation.
