Artemis Aerospace explores the history of airline slot allocation

Airport slot coordination is a fascinating science. Slot allocation is highly competitive and the best slots are fiercely defended. Artemis Aerospace examines how airlines allocate time slots.

WISTON, England, 13 August 2024 /PRNewswire/ — When you track a flight on Flightradar or watch contrails in the clear blue sky, have you ever wondered exactly how aircraft slots are organized? Maybe you thought it was a global mess and any airline could decide to cancel a flight from Heathrow Airport To Sydney whenever they feel like it, and if they then change their mind and Gatwick Airport To Melbourne There is nothing stopping them. But you are wrong – every single flight from a major airport worldwide has to keep to its assigned slot.

An airport slot is simply permission to use airport infrastructure such as runway, gates and terminal buildings on specific days and times to allow an aircraft to take off or land. Slots are allocated according to guidelines published every two years by the Worldwide Airports Slots Group of the International Air Transport Association (IATA) after consultation with airlines and other stakeholders. Their aim is to provide fair access and the necessary coordination for all airlines and to promote safety and efficiency at the busiest airports.

In the UK, slots are allocated by the operator and airport company Airport Coordination Ltd (ACL), which is the world’s first independent slot coordinator to allocate slots for winter and summer travel.

This coordination takes place at three levels:

• Level 1 – no coordination required as airport capacity is normally sufficient to meet demand.
• Level 2 – Coordination is done by mutual agreement with the airlines, as there is a possibility of congestion during peak periods.
• Level 3 – an airport whose capacity to handle flights is significantly exceeded by the demand for its services; all airlines and operators have slot allocations.

Twice a year, IATA holds a slot conference. Over 400 airport and operator representatives attend and compete for the slots that will best enable them to develop their aviation business.

Because the number of slots is limited and many of them are in high demand, some airlines have acquired them to assert their dominance on a particular route, blocking competition but not using the slots themselves. This practice has been banned by the introduction of a series of rules, the most important of which is the 80/20 “use it or lose it” rule. It states that airlines must use at least 80% of their slot allocation per airport. Otherwise, the slot will be given to another airline. However, during major global crises such as the Covid pandemic, these rules have been temporarily suspended.

According to IATA, there are over 200 Level 3 airports worldwide, and around 50% of all air passengers depart from a Level 3 airport, with 35% of all flights operating between two Level 3 airports.

London Heathrow Airport is the UK’s largest airport and the fourth busiest in the world. It will serve almost 80 million passengers in 2023 – it also holds some of the most valuable slots in the world. ACL’s data for the 2023-2024 winter season shows that British Airways will have 4779 slots at Heathrow Airportby far the largest number and more than half of the total slots allocated. Virgin Atlantic is in second place with 392 slots. Lufthansa is in third place with 290, Aer Lingus Fourth with 288, United Airlines fifth with 278 and American Airlines sixth with 270.

The appeal of a slot can rise or fall depending on the popularity of a particular destination. Winter and summer travel have marked differences, and slots that fit seamlessly with the needs of commercial travelers are always at the top of the popularity list. Sometimes more unusual reasons can also trigger slot demand, such as “screen tourism” – Aer Lingus has acquired a new slot from Ireland West Airport to Heathrow Airport after the film ‘Banshees of Inisherin’ captured the beauty of the West of Ireland.

The lack of slots means that competition for the most profitable slots is fierce. Although IATA does not encourage sales or bidding wars, it does allow airlines to swap or lease slots if they are not using them, as they would otherwise expire. One legendary trade took place in 2016 when Oman Air bought a pair of slots. Heathrow Airport Air France-KLM slots for 75 million US dollarsBargains can also be had in the wake of global events – Aeroflot’s ban on Heathrow Airport after the invasion of Ukraine meant a big day for the six airlines, which secured around 1,300 slots.

The aim of slot allocation is to avoid delays, ensure passenger safety and ensure optimal passage of aircraft to and from the airport. So the next time you look up and see an Airbus flying past in the sky, think about the complex transactions that got it there.

Photo – https://mma.prnewswire.com/media/2476477/Artemis_Aerospace_Slots.jpg