Wednesday, March 11, 2020

Coronavirus impact: Why there are few takers for Iata’s appeal to relax airport slots

In early March, International Air Transport Association (Iata) appealed to global slot regulators to suspend the rules governing the use of airport slots immediately and for the rest of 2020, due to the impact of coronavirus (COVID-19). Iata classifies airports in Level 1, 2 and 3 with Level 3 being the most sought after and congested airports.

Iata estimates that 43 percent of all passengers depart from over 200 slot coordinated airports worldwide and airlines will be forced to keep operating just to protect the slots. These operations could be unprofitable and unfriendly for the environment. Hong Kong, which had seen a reduction in air traffic owing to protests, had already announced the relaxation of rules even before the health emergency started.

At the heart of this debate lies the rule popularly known as use-it-or-lose-it for airport slots. It entails the airlines the same slots which they operated in the last corresponding season if the airline operates 80 percent of its flights on that slot. The rule does not specify that the slots will be lost but airlines go lower down the priority when the utilisation of slot is less than 80 percent in a particular season.

The global airline scheduling is divided into two – summer and winter. The northern summer schedule starts from the last Sunday of March until the last Saturday of October (if there is a Sunday in October) and the remainder is the northern winter schedule. Currently, we are in the winter schedule which started on October 27, 2019, and ends on March 28. The northern summer schedule will start on March 29.
The summer schedule of the previous year is mapped with the summer schedule of the current year and likewise for the winter schedule. This helps balance the need of airlines which operate certain routes only in a particular season – a concept less prevalent in India but popular in North America and Europe where due to extreme weather in winter, routes are curtailed, or seasonal services operate.
While there has been a demand from multiple quarters to suspend the slot rules, a look at the numbers shows that airlines can stop operating the slots today and yet have an achievement of over 80 percent for the winter schedule.
The winter schedule started last October 27 and would operate for 153 days until March 28. As of March 11, we are 136 days into the schedule – translating to 89 percent of utilisation for an operator that has a daily slot at any slot-controlled airport and has operated without cancellation so far.
11/03/20 Ameya Joshi/moneycontrol
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