Suspension of airport “80/20” slot usage rule to last till end of March 2021 – Gatwick not happy
Gatwick airport wants the UK and European regulators to reinstate rules that force airlines to use 80% of their lucrative take-off and landing rights, or lose them, before summer 2021. Wingate wants airlines to give back slots they cannot use, so other airlines such as Wizz Air can come to Gatwick, driving down air fares and getting more bums on airline seats (helping Gatwick survive). The European regulations insisting 80% of landing slots are used were suspended for 6 months, from March, due to the decimation in air travel demand caused by Covid. This was done so airlines would not fly empty planes, just to say the slot has been used. The restriction has been extended for another 6 months, to 27th March 2021, as air travel demand will remain very low. There is discussion within the industry if this should continue into next summer, and even industry lobby body, Airlines UK, is in favour of not wasting fuel and generating CO2, with flights by empty planes. Gatwick’s Stewart Wingate wants the UK to do its own thing on the “80/20” slot rule, after it leaves the EU. Several airlines have said they will leave Gatwick, some going instead to Heathrow.
Gatwick boss demands return of 80/20 landing rights rules
Stewart Wingate says reinstatement after Covid suspension would boost competition
by Philip Georgiadis (Financial Times)
London’s Gatwick airport is pushing UK and European regulators to reinstate rules that force airlines to use or lose their lucrative take-off and landing rights ahead of next year’s critical summer season.
Stewart Wingate, chief executive of the UK’s second-busiest airport, said in an interview that it is “vital” airlines hand back slots they do not plan to use so that competition returns to the industry.
European regulations dictating that carriers lose a slot if it is not used 80 per cent of the time were suspended for six months in March. The move was designed to stop airlines running empty flights to hold on to their landing rights as global air travel all but ground to a halt amid the coronavirus pandemic.
The so-called “80/20” rules were then waived for another six months in September and the industry is now debating whether the waiver should be extended for a third time to run across all of next summer.
Take-off and landing rights are among airlines’ most valuable assets and can be traded for tens of millions of pounds.
“It is vital that the industry reverts back to using the 80/20 slot rule for the start of the summer season,” said Mr Wingate. This would “ensure that the aviation market is competitive and airlines are incentivised to trade or hand back unused slots so that other airlines can fly them instead, including new market entrants”.
Industry body Airlines UK said the slots waiver “continues to be absolutely necessary” and allows airlines to adjust capacity to fit passenger demand. “Crucially it ensures we’re not needlessly emitting carbon by operating empty aircraft simply to maintain slots,” it added.
Britain currently abides by EU slot waiver rules and Mr Wingate said the government could use Brexit to go its own way on airport regulation.
He called on the government to launch a consultation, including “looking at whether the UK’s new post-Brexit powers can be used to create a regime that works better for the country’s highly competitive airports”.
Heathrow airport said the government should engage “now” to get a policy in place for the summer that “is fair to both airports and airlines”.
The pandemic has hit Gatwick particularly hard; passenger numbers fell 86 per cent in the third quarter of this year. Virgin Atlantic has closed its operation at the airport, while British Airways and Norwegian have both suspended flights from the airport.
London Gatwick under a cloud as carriers threaten to quit airport
In the meantime, Gatwick has been unable to offer the spaces to carriers looking to increase their foothold in the London market, notably Hungarian low-cost airline Wizz Air.
Jozsef Varadi, Wizz’s bullish chief executive, told the Financial Times earlier this month that the suspension of the slot rules have stopped him from a “significant investment” in Gatwick. Given free rein to hoover up slots, he said Wizz could eventually operate 15 to 20 aircraft from the airport, up from just one currently.
Europe Extends 80/20 Slot Rule Suspension For Winter Season
by Joanna Bailey (Simple Flying)
September 14, 2020
The European Commission has today made the announcement that many European airlines were waiting to hear. It has confirmed that it will be extending the waiver of the 80/20 slot rule through to the end of the winter season. This will protect airline’s slots until March 27th next year, avoiding unnecessary ghost flights and allowing carriers to plan their winter schedules.
The European Commission has today announced its intention to extend the waiver on slot rules at congested airports through the entire IATA winter season. This will see the 80/20 requirement canceled through to March 27th, 2021, avoiding airlines operating ‘ghost flights’ just to keep their slots.
European Transport Commissioner Adina Vălean said that,
“Today’s report shows that air traffic levels remain low, and more importantly, they are not likely to recover in the near future. In this context, the lack of certainty over slots makes it difficult for airlines to plan their schedules, making planning difficult for airports and passengers.”
The slot waiver has been guaranteed by the Commission, giving airlines the information they need to dig in and build their winter schedules. Today’s decision follows a strong call earlier this month from IATA, ACI Europe, A4E and other industry bodies for the Commission to take action.
Similar waivers have been in place in other parts of the world. Last month, Hong Kong extended its slot waiver until March next year, and over the weekend, the FAA said it favors an extension of the slot waiver at US airports.
Under normal circumstances, some of Europe’s biggest and busiest airports are thoroughly oversubscribed. Airports such as Heathrow in London and Schiphol in Amsterdam have more demand than they can accommodate, meaning the airport has to be slot controlled.
This means airlines are given specific slots for landing and taking off, slots that they need to use in order to maintain their ownership. The usual rules say that the slots must be used for 80% of the time at a minimum; otherwise the airline could lose the slots for the following season.
When demand plummeted due to COVID, airlines were faced with either operating empty planes or risking the loss of their valuable airport slots. To solve this problem, the European Commission granted a waiver to the 80/20 rule back in March, which allowed airlines to let their slots go unused without risk of losing them.
Back then, the industry hoped for a return to semi-normality by the winter season. However, things are still pretty tricky, with border closures and worries about second waves making passengers reluctant to fly. As such, this extension of the waiver will come as a great relief to airlines trying to figure out their winter schedules.
Simple Flying reached out to the industry to see what this change in policy meant to them. IATA told Simple Flying just how welcome this waiver is. It said,
“IATA welcomes the granting of the slot waiver for the Winter season. It is helpful that the European Commission has recognized that airlines will not be able to run a full schedule this Winter, and that a slot waiver was needed to protect connectivity and the environment. We thank European member states and key members of the European Parliament for their understanding of the situation and their support for the Waiver.
“As the Commission’s statement acknowledged, airlines can now plan a realistic, sustainable schedule for this Winter. The challenge of that must not be underestimated. Planning in these uncertain times is difficult enough. Realizing even the modest schedules that airlines are putting together comes on top of that.
“The situation regarding which markets are open or closed remains in flux, with little predictability. Demand is flatlining as the summer travel season ends with little business travel on the horizon. The latest Eurocontrol estimates show that flight movements this Winter will be 55% down on 2019, and the situation is still deteriorating.
“Passenger numbers will not be returning to 2019 levels until at least 2024. The slot waiver gives airlines valuable flexibility to move services to where demand is stronger, and ensure that empty flights are not flown, but this waiver does not mark the beginning of the end of the crisis facing the aviation industry.”
Airlines4Europe, an industry body representing more than 70% of European air traffic, told us,
“We welcome the Commissioner’s clear statement. It is important that European airlines now have confirmation that the Commission will grant a waiver for the full winter season. The Commission’s report clearly shows the severe impact of COVID-19 on air travel in Europe. Demand has plummeted, uncoordinated travel restrictions continue to hold back the sector’s recovery, and we don’t know how the virus will evolve.
“The latest Eurocontrol forecasts anticipate 55% fewer flights in Europe in 2020 compared to 2019, a decrease of 6 million flights. The overall revenue loss is estimated at €140 billion across the industry [including airports and ANSPs].
“The winter season is typically harder for airlines than the summer season – less demand, lower profitability. And this summer was not a good one. Winter 2020/2021 will probably be the worst in aviation’s history.
“It is therefore good that the Commission is taking appropriate action to support the industry through this difficult period – the waiver allows airlines to adjust schedules without losing future access to key airports, and it allows airports to plan their resources and infrastructure accordingly.
“For anyone who has been following this issue, it is no secret that we wanted this clarity sooner. There were important deadlines in August for the slot allocation process, which we have now passed. There is no time to waste.
“To ensure the waiver is used responsibly and does not distort the market, we have agreed a set of conditions with the airports and the independent slot coordinators. As requested by Commissioner Valean in her statement, we are committed to applying the agreed industry conditions once the waiver has been formally granted.
“However, we now need the Commission to formally extend the waiver – through a so-called delegated act – to give all parties legal certainty. The sooner this happens, the faster the planning process for winter can get underway. This will also allow airlines to publish schedules that give passengers as much predictability as possible under the circumstances.”
UK airline Virgin Atlantic responded with a positive statement, but warned that more waivers may be needed next summer. It said,
“The global aviation industry is experiencing an unprecedented decline in consumer demand and immediate measures are needed to help airlines weather this storm.
“We’re very pleased that the European Commission has listened to airlines and airports and announced plans to relax the “use it or lose it” rule on airport slots for the full winter season, until 27th March 2021. Today’s decision provides airlines with the flexibility they need, enabling us to operate services as efficiently as possible, provide certainty for our customers, and avoid unnecessary carbon emissions.”
“We urge that slot waivers are kept under review and will push for them to be extended through summer 2021 if necessary.”
Although the Commission has agreed to extend the slot waiver, it has also made it clear that abuse of the system has been noted and will not be tolerated. Airlines should only keep hold of those slots which they intend to operate in the next equivalent season. Still, there have been accusations that some may be holding on to slots that they never intend to operate again, just to stifle the competition. Vălean commented on the situation, saying,
“The initial slot waiver – adopted in the early days of the crisis – has allowed airlines to make financially sound decisions on whether to run flights, as well as avoid ghost flights. Nonetheless, our report also highlights certain problems with the current waiver, which are preventing airlines from using airport capacity efficiently.
“Slots are not always relinquished in time for other users or airports to plan operations as they would like; competition may also be distorted if airlines seek to benefit by increasing their market presence without using their slots and airport capacity correctly. Such behavior can hamper competition and can, therefore, harm EU passengers and freight customers. This must be remedied.”
She further said that she hoped airlines would abide by the agreed conditions voluntarily throughout the winter season, pending the adoption of enforceable conditions. This is due to the fact the Commission wants to grant the waiver extension right away, before the enforcement action can be formally adopted.
IATA previously said that an agreement had been reached with airlines, slot coordinators and airports to ensure the fair use of the waiver throughout winter. Let’s hope they can stick to it.
Airlines, suffering from fewer passengers due to Coronavirus, want relaxation of 80% slot “use it or lose it” rule
The airlines are feeling the effect of the Coronavirus. It is largely by air travel that the virus has spread so widely, and so fast, to dozens of countries. But the impact of the virus is to reduce air travel, either by people being prevented from flying, or others choosing not to put themselves at risk. So flights are being cancelled, and airlines are worrying about their profits. Currently in the UK, and Europe and internationally at large enough airports, the slots are allocated – and there is a “use it or lose it” rule. If an airline does not use 80% of its slots, it risks losing them. Slots can be hugely valuable, at an airport like Heathrow. In the UK the slots are administered by ACL (Airport Coordination Limited). Airlines are now asking that the slot use rules should be relaxed, even just temporarily while the world waits to see how widespread the Coronavirus becomes. IATA has said it was contacting aviation regulators worldwide and requesting the usual rules governing the use of takeoff and landing slots be put on hold. That has been allowed occasionally in the past. Airlines often “cheat” on the 80% rule, flying small planes, or “ghost planes” to keep up the figure.
EU to suspend rules on slot “use it or lose it” avoiding ‘ghost flights’ rule for 4 months – airlines want longer
The European Commission has now said it will suspend for 4 months the rules on using airport slots, that have forced airlines to keep empty ‘ghost flights’ in the air, as a result of coronavirus cancellations. It is now up to the European Parliament and Council to sign off on the proposal before the rules can be fully suspended – they meet next week. The suspension will be considered to start on 1st March, lasting until 30 June. It can also be extended if necessary. But the airlines want this extended to the end of October. So now airlines do not need to fly an empty plane, just to use that slot, without fear of losing lucrative airport slots in 2021. The current law stipulates that carriers have to use at least 80% of their allotted slots, or they are returned to a common pot for the next calendar year. As well as saving the airlines effort and cost, it will avoid unnecessary carbon emissions. The proposal also back dates the rules to 23 January 2020 from China-bound flights, as that was the first date when Beijing started to close air routes. Airlines are losing money, as passengers stay away. BA said it is likely they will lose a number of jobs, “perhaps for a short period, perhaps longer term.”