As pandemic rages on, focus shifts back to slots

Even as the vaccines move into final stages and countries start planning for vaccine administration, logistics and storage – the airline industry is yet to see any significant recovery on the horizon. Amidst this lack of recovery the focus has shifted again on slots – the prized possession for airlines.

The Worldwide Airport Slot Board (WASB), comprising Airports Council International (ACI World), the International Air Transport Association (IATA), and the Worldwide Airport Coordinators Group (WWACG) released a joint recommendation for airport slot use relief for the northern summer 2021 season. The Northern Summer 2021 season begins March 28, 2021 and would end on October 30, 2021.

About 65% of direct city pair connections have vanished in the first quarter of 2020. Interestingly, slot-regulated airports serve nearly half of all passengers worldwide. The use-it-or-lose-it rule for slots which mandates 80% utilisation of slots had never envisioned a case like a pandemic while being framed! IATA has estimated that it would take up to 2024 for the traffic to return to pre-COVID levels. The WASB (Worldwide Airport Slot Board) is a forum for brining together representatives from airports, airline and slot coordinator community to agree positions on slot rules. The WASB has worked on a proposal as below

Airlines that return a full series of slots by early February to be permitted to retain the right to operate them in summer 2022. 

A lower operating threshold for retaining slots the following season. In normal industry conditions this is set at 80-20. The WASB recommends this be amended to 50-50 for Summer 2021. 

A clear definition for acceptable non-use of a slot. For example, force majeure as a result of short-term border closures or quarantine measures imposed by governments.

WASB claims that this flexibility will help aid recovery. There has been a major shake up in the rankings of the world’s most connected cities.

London, the world’s number one most connected city in September 2019, has seen a 67% decline in connectivity. By September 2020, it had fallen to number eight.  

Shanghai is now the top ranked city for connectivity with the top four most connected cities all in China—Shanghai, Beijing, Guangzhou and Chengdu.  

New York (-66% fall in connectivity), Tokyo (-65%), Bangkok (-81%), Hong Kong (-81%) and Seoul (-69%) have all exited the top ten. 

The study reveals that cities with large numbers of domestic connections now dominate, showing the extent to which international connectivity has been shut down.

 

NetworkThoughts
Slots are critical for airlines. Survival of airlines is critical for airports. However, protecting slots for a longer period means that newer airlines who may want to start a route would not be allowed to do so. This would impact the airport, traffic and passengers in a far wider scale than what it would otherwise.

The WASB view protects existing airlines but should also encourage newer airlines who weren’t present on the route to start the route earlier. This will create a healthy competition and in the end benefit the customer

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