Airport slot ‘amnesty’ declared to solve travel chaos — what could that mean for UK travel?

5d ago

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The government has stepped up in a bid to save summer for thousands of British holidaymakers caught up in airport chaos by proposing a runway slot “amnesty” for airlines.

While the plan is still subject to parliamentary approval, ministers hope the plan will reduce the number of last-minute flight cancellations by making it easier for airlines to pull flights from their schedules ahead of the peak summer season without the risk of losing them long-term.

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But what does this actually mean for travel, and what other effects could it have?

What are runway slots?

Runway slots are one of an airline’s most valuable assets and can be traded for tens of millions of pounds (Photo by Issarawat Tattong/Getty Images)

To understand what it means to passengers, you need to understand what runway slots are.

In short, landing slots are one of an airline’s most valuable assets and can be traded for tens of millions of pounds as carriers vie for available air space.

They are also, according to the IATA’s fact sheet on landing slots, “required to avoid chaos at airports where the infrastructure cannot match demand”. This, clearly, has not been the case of late.

Normally, airlines have to use their allocated slots – essentially parking spaces for planes – at least 70% of the time or be forced to hand them over to a rival — a practice known as the “use it or lose it rule”.

Related: Spanish holiday chaos: EasyJet and Ryanair set for 15 days of major strikes

For the aviation industry, the argument for the “use it or lose it” rule is that it keeps the industry competitive by incentivising airlines to fly routes, trade them, or hand them back so other carriers, including new market entrants, can use them instead. However, given their high value to an airline’s business, airlines will fight tooth and nail not to give them up.

Due to post-pandemic staff shortages, many carriers have been unable to find enough crew to operate all their flights or ground-handling needs, leading to a rash of recent last-minute cancellations as airlines struggle to meet travel demands. The proposed amnesty would allow airlines to temporarily give their slots to other competing airlines and then reclaim them at a later date when they’re able to once again work to a full flight schedule. In theory, alleviating the fear for carriers of losing the slots forever whilst ensuring travel demand is met.

A Heathrow spokesperson told TPG today:  “This amnesty will enable airlines to make early choices to consolidate their schedules, boosting the resilience of summer operations and giving passengers the confidence they deserve ahead of their journeys.

“We encourage airlines to take this opportunity to reconsider their summer schedules without penalty and inform passengers as early as possible of any changes.”

what could this mean for travel?

Today easyJet suggested it would be taking up the government’s offer to temporarily give up some of its slots to ease pressure on the beleaguered airline (Photo by Ben Smithson/The Points Guy)

Less cancellations

In theory, if struggling airlines hand over their summer slots to more reliable airlines, we should see less cancellations across the board. That’s the whole point.

EasyJet is the airline that has struggled the most, having already cancelled hundreds of flights to destinations all over Europe, with many more in the pipeline.

Related: Ryanair swoops in with ‘rescue flights’ for passengers after cancellations by other airlines — but act fast

And today the airline suggested it would be taking up the government’s offer to temporarily give up some of its slots to ease pressure on its beleaguered operations.

An easyJet spokesperson told TPG: “This is a positive step by the Government which we think makes sense given the current challenging operating environment for the industry.”

More flight options

In January, a row broke out between some of Europe’s biggest budget airlines and their longstanding legacy rivals over the “use it or lose it” rule. Ryanair and Wizz Air accused their larger long-haul competitors of hogging valuable slots to preserve airport access despite being unable to sell enough tickets to use them as the world emerged from the pandemic.

Both budget airlines said carriers like Lufthansa and Portugal’s TAP should relinquish their unused slots to low-cost rivals who could in turn use them to offer customers more flight options. “Instead of operating empty flights just so they can block slots, Lufthansa should release the seats on these flights for sale at low fares to reward the German and European taxpayers who have subsidized it with billions of euros during the COVID crisis,” said Ryanair Group CEO Michael O’Leary at the time.

Related: EasyJet confirms it will be cancelling hundreds more summer flights

Wizz Air CEO Jozsef Varadi echoed at the time: “We would be able to operate those slots at constrained airports so why are they protected for the benefit of legacy carriers who are incapable of operating them because they are inefficient?”

O’Leary has called the practice of slot blocking “anti-competitive”, adding that it “obstructs growth, and delays the recovery of traffic, tourism, and jobs”.

Fast-forward to today, and the current crisis presents a similar situation. Freeing up unused slots this summer to airlines who have the capacity to use them could see such carriers offer more competitive routes. For passengers, this could mean more options to fly to where they want to go, and when.

On top of that, in order to compete with rivals, airlines may use their newfound slots to offer a more diverse range of destinations this summer.

Cheaper tickets

By increasing competition for newly opened slots, fare pricing could become more competitive too.

As smoother-operating airlines compete for the freed-up slots, they may begin to offer cheaper tickets to lure travellers away from other airlines.

Indeed, in 2020, when the UK government offered to extend the “slot waiver” to help airlines ride out a drop in traffic during the pandemic, Wizz Air’s Varadi branded the idea “against free competition”. “[It protects] incumbent airlines with weak business models,” he said,  while airlines like Wizz Air are ready to take up new market opportunities and provide even more low fare opportunities for their passengers and essential connectivity for countries.”

The government’s latest slot amnesty will, if only temporarily, allow certain airlines do exactly that.

Less ‘ghost flights’

One of the ways airlines fight to hang on to slots they can’t use is by sending empty “ghost flights” into the skies — a practice known in the flight business as “keeping slots warm.”

Related: More than 100,000 “ghost flights” will fly over Europe this winter, says Greenpeace

In other words, when an airline can’t sell enough tickets for certain flights, they send them into the sky empty just to keep their quotas up and hang on to their valuable slots. Such “ghost flights” have been blamed for unnecessarily polluting the skies.

While it may not mean less pollution, as the same number of planes should in theory be taking off, at least they will contain passengers when they do.

Will it work?

One aviation expert we spoke was sceptical about whether the proposal will actually solve the issues airlines are facing right now.

“This proposal appears to raise more questions than it answers,” said aviation and travel expert Sally Gethin. “I think the biggest question is, will airlines actually want to give up any of their slots, even if there are guarantees that they’ll get them back? It does look very optional on the face of it.”

She says airlines would be unlikely to relinquish any slots unless absolutely necessary. And if they do, there is no guarantee that an airline that takes a slot will be able to find a corresponding slot at the right time at the other end. “The U.K. government is only responsible for slots at U.K. airports. So does that mean airlines who take over freed slots have to go away and find suitable slots at a destination partner elsewhere?”

Bottom line

Allowing airlines to temporarily open up their slots to competitors is an interesting proposition that could, on paper at least, go a short way towards solving some of the ‘travel chaos’ that we’re currently seeing in U.K. airports. Measures to ensure that holidaymakers have more flight options, from carriers well equipped to deal with travel demand can only be welcomed, especially if they also bring about a more competitive pricing environment.

That said the logistics of rolling this out effectively, not to mention industry-centric politics, mean that it could be some time before we see this plan come to fruition if indeed it ever does. Currently, it still needs to be approved by parliament and opens up a lot of questions around how this could be rolled out beyond U.K airports — every A needs a B afterall…

Should airlines and ministers give this proposal the green light this won’t be something that falls into place overnight.

Featured image by Cravetiger/Getty Images.

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