UK airlines can keep airport slots this summer without having to use them
UK airlines including British Airways, easyJet and Virgin Atlantic will hang on to lucrative take-off and landing slots without having to use them this summer after the DfT extended waivers to airport slot rules. Airlines have parked their fleets during the pandemic, prompting the suspension of rules forcing airlines to “use or lose” their slots 80% of the time. The suspension of the requirement has been opposed by rival airlines Ryanair and Wizz Air, as they hope to profit from the disruption in the industry. Gatwick is also unhappy, as it hoped to trap airlines there, while they would prefer to go to Heathrow. The body, ACI, controls the slot market and slot allocation. The decision indicates that the DfT and Grant Shapps are expecting another difficult summer for the European airline industry as travel curbs widen. The suspension will be a relief for BA, EasyJet and Virgin as they have been able to trim back their schedules while hanging on to spots at capacity-constrained airports. Airlines may decide there are better opportunities for growth [they always want to grow, regardless of the climate crisis] through gaining slot rights elsewhere in Europe.
UK extends airport slot waiver through summer season
29 January 2021 (City AM)
By Edward Thicknesse
The UK has extended its waiver on the “80:20” airport slot rule through the lucrative summer season, it was announced today.
The decision, which was announced this morning by industry body Airport Coordination Limited (ACL), will be a much-needed boon for the UK’s embattled carriers.
In a statement, it said: “The UK’s Secretary of State for Transport has announced that the UK will extend the waiver from the 80:20 slot usage rule to the Summer 2021 season, subject to certain conditions.”
Under the normal regulations airlines which do not use 80 per cent of their lucrative take-off and landing slots have to cede them to rival carriers.
But with carriers flying a tiny proportion of their normal schedules due to the pandemic, these rules have been suspended since last March.
However, the decision to extend the waivers means that airlines looking to expand their operations by taking over others’ slots will find themselves frustrated.
One such carrier is Hungarian flier Wizz Air, which is understood to be targeting expansion at Gatwick airport in Sussex.
Back in November, fellow low-cost airline Ryanair also expressed is opposition to the waiver.
“We oppose the extension of slot waivers into summer 2021 because this will lead to fewer flights and higher fares for consumers”, a spokesperson said.
“Legacy airlines at hub airports will have no incentives to operate flights. Slot waivers distort competition by preventing low-fare airlines from expanding while legacy carriers are able to reduce capacity and raise prices.”
UK airlines will hold on to airport slots without having to use them
Ministers extend waivers to ‘use or lose’ rules in boost to carriers including BA, Virgin and easyJet
By Philip Georgiadis (Financial Times)
UK carriers including British Airways, easyJet and Virgin Atlantic will hang on to lucrative take-off and landing slots without having to use them this summer after ministers extended waivers to controversial airport rules.
Airlines have parked their fleets during the crippling disruption caused by the pandemic, prompting the suspension of rules forcing airlines to “use or lose” their slots 80 per cent of the time.
The suspension since the pandemic started has been criticised by rival airlines Ryanair and Wizz Air, which argue the waivers are anti-competitive and hope to profit from the disruption in the industry.
The decision is also a blow to London’s Gatwick airport, which has seen many of its biggest airlines switch their remaining operations to Heathrow, and was pushing for airlines to be forced to use their slots.
The Department for Transport will extend the waiver, which was due to be lifted in the spring, through the summer season, Airport Coordination Limited said on Friday.
The decision illustrates that ministers are expecting another difficult summer for the European airline industry as travel curbs widen.
It will be a relief for airlines including BA, easyJet and Virgin, which have been able to trim back their schedules while hanging on to spots at capacity-constrained airports.
Take-off and landing rights are among airlines’ most valuable assets and can be traded for tens of millions of pounds.
“The risk for the UK is that a blanket waiver . . . may discourage airlines who are prepared to restart operations from investing in the UK market,” said Chris Butler, an analyst at ACL, which coordinates slot distribution.
Airlines may decide there are better opportunities for growth through gaining slot rights elsewhere in Europe, he added.
Wizz had written to ministers over the rules in a bid to hoover up slots at Gatwick.
The carrier’s chief executive Jozsef Varadi has warned rules are stopping him from making a significant investment at Gatwick, where he has floated plans of eventually operating up to 20 aircraft from just one currently.
Mr Varadi told the Financial Times this week that allowing airlines to hold on to slots through the summer without using them would be “mind boggling”.
“London Gatwick at the moment is a ghost house . . . I think it is mind boggling that an airline who would be prepared to fly, and contribute to the welfare of the country and economy, is blocked because airlines are holding slots back,” he said.
The UK has been able to set its own rules, which differ from EU proposals to phase the rules back in this summer with a reduced threshold requiring carriers to use 40 per cent of flights, following its departure from the bloc.