COVID-19: The Unintended Impacts of Slot Waivers

Suspending slot usage requirements could weaken choices for the travelling public and the competitive landscape among airlines 

ACI World established the Expert Group (EGS) on Slots in 2015 to provide strategic and technical guidance to ACI World on the development of policy on airport slot allocation.

The EGS membership reflects the global nature of slot allocation, with representatives from all ACI regions. The main denominator that the EGS has followed since its inception is that the development of slot allocation policies should be data-driven and evidence-based.

An evidence-based and data-driven approach to slots remains indeed of prime importance as the entire aviation ecosystem is planning for the upcoming winter season in the COVID19 crises context. As such, it becomes critical that regulators worldwide consider the needs of travelers and of the overall aviation ecosystem before deciding to extend airport slots waivers into the winter 2020-2021 season. 

Waivers protect market access for incumbents whether or not they operate flights. Noting that several airlines have already made public announcements regarding exiting certain airports and about fleet reductions, there is a growing concern that waivers could be used as a mechanism to insulate slots from market realities during the recovery period. For the benefit of the flying public and communities at large, capacity needs to be available for airlines that are willing and able to fly.

Data-driven and evidence-based approach to assess the relevance of waivers

As recovery will occur at different rates in different places, and consistent with the method put forward by the ACI World EGS, regulators should follow a data-driven and evidence-based approach to assess whether waivers are the appropriate response to re-establish local, regional and global connectivity. In consultation with airport operators and airlines locally, regulators should consider the following evidence:

• Recommendations from international and national public health authorities;
• Travel restrictions imposed by relevant aviation markets; and
• Actual traffic and forward bookings with a ring-fenced approach for: a) domestic traffic; b) medium-haul regional traffic; and c) long-haul international services.

Decisions on whether airport slot waivers should be extended in the winter should not be taken far in advance of mid-August, as there is still considerable uncertainty about the pace and shape of the recovery in air transport demand and the winter season is still months away. Where waivers are deemed relevant, strict conditions must be attached to avoid unintended impacts on the competitive landscape and ensure that consumers are protected from last-minute cancellations.

ACI recommends that, where appropriate, waivers must come with conditions, along the following lines

First, it is necessary to incentivize airlines to return slots they will not use to enable airports to safely plan operations, complying  with physical distancing requirements and encouraging efficient reallocation when possible. In the interest of the passengers, commercial cancellations should be made at least four weeks before the scheduled departure date and slots returned accordingly within 3 business days of cancelling flights. Slots not handed back in a timely manner must not be eligible for the waived slot usage requirements.

Second, slots must not be covered by waivers when an airline publicly announces that it will cease or significantly reduce services at an airport. Considering the fleet reductions announced by several carriers, it is unrealistic to assume that all services at coordinated airports will resume during the recovery period. Airlines that are ready and able to operate to support the recovery must not be blocked from entering airports by anti-competitive holding of slots by airlines exiting these markets. Similarly, slots held by airlines being liquidated must not be covered by slot waivers.

Finally, slots allocated in response to new requests must not be eligible to qualify for waivers. This is to avoid the possibility of airlines building up historics for the post-COVID-19 future simply by submitting an administrative request, blocking access from others who may be able to operate sooner.  Slot allocation is implemented as a result of scarce infrastructure and implies that other flights were refused to keep the infrastructure available for airlines who were awarded slots. In this context, airports and unsuccessful airlines want to make sure that this capacity does not go to waste.

This would be unfair to everyone, especially the flying public and the community served by the airport.