Thursday , February 22 2018
Home | Columns | Airport Slots

Airport Slots

By Dr. P.P.C. Haanappel, Emeritus Professor of Air and Space Law, Consultant

Regularly, Aeropolitical Updates reports on airport slot developments throughout the world. “Slots” is a complex subject. The following is an attempt to systemize the matter, at least legally.

Airport slots and other slots

An airport slot is an arrival or departure (runway) time allotted to a particular airline at a particular airport, for a particular season (summer or winter). It is the airline’s choice for which route the slot will be used. Not all airports are slot controlled, especially not the non congested ones. Airport slots presuppose the existence of landing rights, in international air transport whether pursuant to bilateral air transport / services agreements or to some other agreement between states in the sense of Articles 5 and 6 of the Chicago Convention on International Civil Aviation. In Europe, for instance, landing rights result from the supranational / multilateral EU, EEA, EU-CH, and ECAA Agreements. Thus, airport slots and landing rights are distinct: the latter must precede the former.

Airport slots are to be distinguished from Air Traffic Control (ATC) en route slots, the some 15 minute period within which a flight, on any given day, must begin and end the use of (congested) airways. In Europe, Eurocontrol’s Central Flow Management Unit (CFMU) is in charge of allocating these slots.

Note: airport slots are scheduling times; en route slots are actual times. Both are instruments to control congestion and to allocate the use of scarce resources, runways and airways.     

Regulatory framework

From the 1960s onwards, IATA has been involved in scheduling procedures at airports, first to co-ordinate airline schedules to promote interlining, later, more importantly, to allocate (scarce) airport runway arrival and departure slots. The former Scheduling Procedures Guide (SPG) and Conferences (SPC) have been replaced by the Worldwide Slot Guidelines (WSG) and the biannual IATA Slot Conferences (SC).

The operation of the IATA slot allocation conferences for airports located in the EU, and by extension in the EEA, CH and ECAA, is somewhat modified by the applicability of the EU Slot Allocation Regulation 95/93 (as amended). In the US, where currently only three airports are slot controlled and another four slot monitored, the FAA participates in the IATA system for international flights. It should be recalled that slot allocation or monitoring is principally a self-regulatory airline activity, through its trade association IATA.

As mentioned earlier, however, in international air transport, slots presuppose governmentally granted traffic rights. Slots are an airline agreed modality to exercise governmentally granted traffic rights. ICAO has developed a number of model bilateral clauses on slot allocation, which are basically procedural in nature, in order to facilitate the process.    

Ownership of slots

An often asked legal question is who owns airport slots? The answer to this question cannot be found in the above-mentioned IATA, EU, FAA, ICAO instruments. The answer, if any, depends on national legal systems, in particular national constitutional and property laws. Usually, the answer will be that the airport (operator) owns the slots. Alternatively, in other jurisdictions the answer will be that governments or airlines own the slots. The answer, however, is not that important. What is more important than the theoretical question as to ownership, is the practical question as to value of slots and whether they can be traded. There is no doubt that slots have an economic, pecuniary value, depending on their scarcity. The scarcer a slot, the higher the price for an airline that wishes to use it. In the initial allocation process, slots will normally be assigned free of charge.  The legal question hereafter is whether an airline, holding a slot, can sell it to another airline: secondary slot trading.       

Trading of slots

The same legal instruments, mentioned above, are also not crystal clear as to whether secondary slot trading is allowed. In Europe, slots may be exchanged by airlines, one for one. Whether this “exchange” may be for “value”, for “consideration”, by “onerous title” remains somewhat hazy. Common law courts have accepted the validity of secondary slot trading for pecuniary consideration more easily than continental courts. For already some ten years now, the EU Commission has favoured such slot trading, but this had not been laid down in formal legislation. 

Slots and mergers / take-overs / alliances

In competition and antitrust law procedures for the approval of airline mergers, take-overs or alliances, national or EU authorities may also condition such approvals by requiring the applicant airlines to surrender slots on particular routes to other, sometimes new entrant carriers, so as to reduce the competition restricting effect of mergers, take-overs or alliances. Such conditioning is usually respected by the airlines involved and the slot allocation at the relevant airport(s) adjusted accordingly. Whether the effect of the slot surrender actually leads to increased competition in practice, is another matter. 

Slots and bankruptcies

The more it is realized that slots have an economic, pecuniary value, the more they are used in bankruptcy proceedings as an asset upon which creditors can take recourse in the proceedings surrounding the bankruptcy of an airline. In the year 2017, the failure of Monarch Airlines (UK) and Air Berlin showed how their slots can be sold for value to competing airlines, thereby generating capital for creditors.

Airport systems, traffic distribution and local rules

Some cities or urban conglomerations have multiple airports in what is called: an airport system. Between such airports, local authorities may distribute traffic over the various airports by way of a traffic distribution rule, but, at least in Europe, such distribution may not be discriminatory, amongst other things, as to carrier identity or nationality.

Finally, within the (runway) slot allocation system, there may be local rules, only applicable to one airport or airport system. These rules are supplementary to the IATA and (inter)governmental ones. For instance, at Amsterdam Airport, in the autumn of 2017, a local rule was introduced to enable Russian all-cargo carrier AirBridgeCargo to continue flying notwithstanding the fact that it could not meet the normal rule that airlines must use at least 80 percent of their slots in any given season (summer or winter) if they do not wish to lose their historical precedence, that is claim on slots in the next corresponding season.         

Dr. P.P.C. Haanappel, Emeritus Professor of Air and Space Law, Consultant

E-mail: info@peterhaanappel.com

19 January 2018

About Aeropolitical Updates Editor

mm
Working in the aviation industry? Stay up to date with the fast-changing aviation regulations, conventions and agreements around the world.

Check Also

Liberalizing African skies for African airlines

Aviation is an engine for economic development; and in the case of Africa, it supports 7 million jobs whilst contributing more than 70 billion to GDP. However, compared to the rest of the world, the numbers are very low. Aviation in Africa is an essential and irreplaceable transport service. This though is well identified by the African government African airlines are shrinking and non African airlines are growing.