AeroTime is excited to welcome Koen Karsbergen as columnist. Co-founder and Principal of Air52 Aviation Consultants, Karsbergen brings more than two decades of experience in airline management and strategy to his columns.
Through Air52, Karsbergen assists airlines, airports, and industry stakeholders with practical solutions for complex challenges, drawing on his extensive background in feasibility studies, fleet and network planning, and airline startups. He also contributes to IATA training courses and serves as faculty for Aviation MBA programs.
The views and opinions expressed in this column are solely those of the author and do not necessarily reflect the official policy or position of AeroTime.
Imagine you’re tasked with scheduling flights for an airline. If you thought it was just a matter of matching the right plane with the right flight, prepare to be surprised. You also need to reserve time for maintenance, ensure that there are sufficient crew numbers, and crucially, make sure all airports can accommodate these flights. Welcome to the intricate world of airline scheduling and airport slot management!
For most passengers and even some industry insiders, the process of how airlines secure the right to take off and land at specific times remains a mystery. Yet, this behind-the-scenes choreography is crucial to keeping the global aviation industry aloft. It’s a delicate balancing act that influences everything from flight schedules to ticket prices, and even airline profitability.
So, what exactly is a slot, and why is it so important? Let’s navigate through the intriguing world of airport slot management and decode this crucial aspect of aviation operations.
What is a slot?
An airport slot is a permission given to an airline to use the full range of airport infrastructure necessary to operate an air service at an airport on a specific date and time. This includes the runway, taxiway, gate or stand, and terminal – the complete package an airline needs for a flight.
But why are slots necessary? The answer lies in the remarkable growth of the aviation industry. As air travel has boomed over recent decades, many airports – especially those serving major cities – have found themselves unable to keep up. Physical constraints, environmental concerns and community opposition often limit an airport’s ability to expand. The result? Airports often find themselves in a squeeze, unable to accommodate all the flights airlines want to operate.
This scarcity necessitates a system to allocate these valuable resources fairly and efficiently. Enter the complex world of slot management, a carefully orchestrated process to maximize airport capacity use while ensuring fair competition.
Slots or no slots, that is the question
When it comes to slot management, airports around the world fall into three distinct categories:
Level 1: These airports have capacity that adequately meets demand. No coordination is required, and airlines can fly when and how often they want.
Level 2: These airports experience some congestion at peak times, but this can be resolved through voluntary cooperation between airlines.
Level 3: These are the most congested airports, where demand significantly exceeds capacity. Here, a formal coordination process is required.
The classification of an airport is based on an official capacity declaration, which in turn relies on a thorough demand and capacity analysis. This analysis considers the maximum capacity of the runway(s), aircraft parking positions and terminal capacity, but also factors in airspace limitations and environmental restrictions.
For Level 1 airports, it’s smooth sailing. Airlines simply inform airports of their planned flights.
Level 2 airports introduce a bit more complexity. A facilitator oversees the voluntary cooperation, ensuring that planned flights don’t exceed the airport’s capacity.
But it’s at Level 3 airports where things get really interesting. These airports work with slots, and their allocation is overseen by a Slot Coordinator. This isn’t just any role. The Slot Coordinator must be a neutral and financially independent body appointed in consultation with the airport and airlines.
To give you an idea of the scale we’re dealing with, there are over 200 Level 3 airports worldwide, including some of the busiest hubs like London Heathrow, New York JFK and Tokyo Haneda. At these airports, securing the right slots can make or break an airline’s strategy.
The slot allocation process: a global balancing act
The process of allocating slots is governed by the Worldwide Slot Guidelines (WSG), as developed by the International Air Transport Association (IATA) in collaboration with airports and Slot Coordinators. These guidelines aim to ensure that slot allocation is fair, transparent, and promotes both competition and efficiency.
The slot allocation process happens twice a year, aligning with the aviation industry’s summer and winter seasons. It’s a multi-stage process.
- Determination of Historic Slots: The Slot Coordinator sends each airline a list of historic or ‘grandfather right’ slots. These are slots that were allocated to the airline in the same season the previous year and which the airline has operated at least 80% of the time over that period.
- Slot request submission: Each airline wishing to operate flights to or from a Level 3 airport must send the Slot Coordinator their intended schedule, including the departure or arrival time, aircraft type and route.
- Initial slot allocation – historic slots: Slot Coordinators first allocate the historic slots to those airlines who have requested these slots again.
- Initial slot allocation – slot pool: Once the historic slots have been allocated, the Slot Coordinator creates a slot pool of all remaining slots. These slots are then allocated based on different criteria and evenly divided between existing and new airlines. If the requested time is not available, the Slot Coordinator can offer an alternative time.
- Slot conference: Once the primary slot allocation has been completed, airlines, airports and Slot Coordinators gather during the Slot Conference to discuss the allocated slots. This is an opportunity for all parties involved to make changes to their proposed operations, swap and transfer slots to optimize the operating schedule of airlines.
The economics of slots: more valuable than gold?
Here’s a surprising fact: airlines don’t actually pay for their allocated slots. However, airport slots, especially at major hub airports, can be incredibly valuable assets.
In some markets, particularly in the UK and EU where secondary slot trading is allowed, slots can change hands between airlines for eye-watering sums. For instance, in 2016, Oman Air reportedly paid $75 million to Kenya Airways for a pair of early morning slots at London Heathrow.
The value of a slot depends on various factors, including the time of day, the day of the week, and the airport’s importance as a hub. For airlines, securing the right slots can be crucial for their network strategy, allowing them to offer convenient connections and capture high-yield business traffic.
Challenges in the slot game
Managing airport slots is far from straightforward, and the system faces several challenges:
Capacity constraints: As demand for air travel continues to grow, many airports are struggling to keep up. The increasing number of flights puts pressure on existing infrastructure, making efficient slot management even more crucial.
Environmental concerns: The aviation industry is under increasing pressure to reduce its environmental impact. This has led to slot reductions at certain airports, forcing airlines to do more with less. Balancing growth with sustainability has become a key challenge in slot management.
Balancing competition and historical rights: The current system’s emphasis on historical precedence can make it difficult for new entrants to gain a foothold at popular airports which are already operating at (almost) full capacity. This creates a tension between maintaining stability for incumbent airlines and fostering competition through new entrants.
Regional differences: Slot management practices can vary significantly between regions due to local laws and regulations. This lack of global standardization adds complexity to slot allocation, especially for airlines operating international routes.
What it means for passengers
While the intricacies of slot management may seem far removed from the average traveler’s experience, they actually have a significant impact on various aspects of air travel.
Flight schedules: The availability (or lack) of slots directly influences when and how often flights are scheduled. This can affect the convenience of travel options for passengers, potentially limiting choices for departure times or necessitating early morning or late-night flights at busy airports.
Ticket prices: The scarcity of slots at popular airports can drive up operating costs for airlines, which may be passed on to passengers in the form of higher fares. This is particularly noticeable on routes to and from highly congested airports.
Competition: Slot constraints can limit the ability of new airlines to enter certain markets, potentially reducing competition and choice for passengers. This can result in fewer options for travelers and potentially higher prices on certain routes.
Lack of destinations: Airlines might favor more profitable long-haul routes over important (but less lucrative) domestic or regional connections, potentially limiting travel options. This can particularly affect passengers in smaller cities, or those seeking to travel to less popular destinations.
Understanding these impacts can help passengers to better navigate the complexities of air travel and make more informed decisions when planning their journeys.
The future of the slot game
As we look to the future, efficient slot management will remain crucial to the smooth functioning of the global aviation system. The challenge will be to balance the needs of various stakeholders – airlines, airports, passengers and local communities – while also addressing growing concerns about the environmental impact of aviation.
Innovations in technology and management practices offer the hope of squeezing more capacity out of existing infrastructure. However, the fundamental issue of how to allocate a scarce and valuable resource fairly is likely to remain a key challenge for the industry.
For aviation enthusiasts and professionals alike, understanding the complexities of slot management offers a fascinating glimpse into the intricate machinery that keeps the global air transport system running. It’s a reminder that behind every takeoff and landing, there’s a complex dance of planning, negotiation and optimization.
So, the next time you’re watching planes take off and land at a busy airport, spare a thought for the intricate slot management system that choreographs this aerial ballet. It might just give you a new appreciation for the complexity – and the marvel – of modern aviation.