The European Commission has today made the announcement that many European airlines were waiting to hear. It has confirmed that it will be extending the waiver of the 80/20 slot rule through to the end of the winter season. This will protect airline’s slots until March 27th next year, avoiding unnecessary ghost flights and allowing carriers to plan their winter schedules.
Slot waiver granted
The European Commission has today announced its intention to extend the waiver on slot rules at congested airports through the entire IATA winter season. This will see the 80/20 requirement canceled through to March 27th, 2021, avoiding airlines operating ‘ghost flights’ just to keep their slots.
European Transport Commissioner Adina Vălean said that,
“Today’s report shows that air traffic levels remain low, and more importantly, they are not likely to recover in the near future. In this context, the lack of certainty over slots makes it difficult for airlines to plan their schedules, making planning difficult for airports and passengers.”
The slot waiver has been guaranteed by the Commission, giving airlines the information they need to dig in and build their winter schedules. Today’s decision follows a strong call earlier this month from IATA, ACI Europe, A4E and other industry bodies for the Commission to take action.
Similar waivers have been in place in other parts of the world. Last month, Hong Kong extended its slot waiver until March next year, and over the weekend, the FAA said it favors an extension of the slot waiver at US airports.
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What does this mean?
Under normal circumstances, some of Europe’s biggest and busiest airports are thoroughly oversubscribed. Airports such as Heathrow in London and Schiphol in Amsterdam have more demand than they can accommodate, meaning the airport has to be slot controlled.
This means airlines are given specific slots for landing and taking off, slots that they need to use in order to maintain their ownership. The usual rules say that the slots must be used for 80% of the time at a minimum; otherwise the airline could lose the slots for the following season.
When demand plummeted due to COVID, airlines were faced with either operating empty planes or risking the loss of their valuable airport slots. To solve this problem, the European Commission granted a waiver to the 80/20 rule back in March, which allowed airlines to let their slots go unused without risk of losing them.
Back then, the industry hoped for a return to semi-normality by the winter season. However, things are still pretty tricky, with border closures and worries about second waves making passengers reluctant to fly. As such, this extension of the waiver will come as a great relief to airlines trying to figure out their winter schedules.
The industry take
Simple Flying reached out to the industry to see what this change in policy meant to them. IATA told Simple Flying just how welcome this waiver is. It said,
“IATA welcomes the granting of the slot waiver for the Winter season. It is helpful that the European Commission has recognized that airlines will not be able to run a full schedule this Winter, and that a slot waiver was needed to protect connectivity and the environment. We thank European member states and key members of the European Parliament for their understanding of the situation and their support for the Waiver.
“As the Commission’s statement acknowledged, airlines can now plan a realistic, sustainable schedule for this Winter. The challenge of that must not be underestimated. Planning in these uncertain times is difficult enough. Realizing even the modest schedules that airlines are putting together comes on top of that.
“The situation regarding which markets are open or closed remains in flux, with little predictability. Demand is flatlining as the summer travel season ends with little business travel on the horizon. The latest Eurocontrol estimates show that flight movements this Winter will be 55% down on 2019, and the situation is still deteriorating.
“Passenger numbers will not be returning to 2019 levels until at least 2024. The slot waiver gives airlines valuable flexibility to move services to where demand is stronger, and ensure that empty flights are not flown, but this waiver does not mark the beginning of the end of the crisis facing the aviation industry.”
Airlines4Europe, an industry body representing more than 70% of European air traffic, told us,
“We welcome the Commissioner’s clear statement. It is important that European airlines now have confirmation that the Commission will grant a waiver for the full winter season. The Commission’s report clearly shows the severe impact of COVID-19 on air travel in Europe. Demand has plummeted, uncoordinated travel restrictions continue to hold back the sector’s recovery, and we don’t know how the virus will evolve.
“The latest Eurocontrol forecasts anticipate 55% fewer flights in Europe in 2020 compared to 2019, a decrease of 6 million flights. The overall revenue loss is estimated at €140 billion across the industry [including airports and ANSPs].
“The winter season is typically harder for airlines than the summer season – less demand, lower profitability. And this summer was not a good one. Winter 2020/2021 will probably be the worst in aviation’s history.
“It is therefore good that the Commission is taking appropriate action to support the industry through this difficult period – the waiver allows airlines to adjust schedules without losing future access to key airports, and it allows airports to plan their resources and infrastructure accordingly.
“For anyone who has been following this issue, it is no secret that we wanted this clarity sooner. There were important deadlines in August for the slot allocation process, which we have now passed. There is no time to waste.
“To ensure the waiver is used responsibly and does not distort the market, we have agreed a set of conditions with the airports and the independent slot coordinators. As requested by Commissioner Valean in her statement, we are committed to applying the agreed industry conditions once the waiver has been formally granted.
“However, we now need the Commission to formally extend the waiver – through a so-called delegated act – to give all parties legal certainty. The sooner this happens, the faster the planning process for winter can get underway. This will also allow airlines to publish schedules that give passengers as much predictability as possible under the circumstances.”
UK airline Virgin Atlantic responded with a positive statement, but warned that more waivers may be needed next summer. It said,
“The global aviation industry is experiencing an unprecedented decline in consumer demand and immediate measures are needed to help airlines weather this storm.
“We’re very pleased that the European Commission has listened to airlines and airports and announced plans to relax the “use it or lose it” rule on airport slots for the full winter season, until 27th March 2021. Today’s decision provides airlines with the flexibility they need, enabling us to operate services as efficiently as possible, provide certainty for our customers, and avoid unnecessary carbon emissions.”
“We urge that slot waivers are kept under review and will push for them to be extended through summer 2021 if necessary.”
Problems with the slot waiver
Although the Commission has agreed to extend the slot waiver, it has also made it clear that abuse of the system has been noted and will not be tolerated. Airlines should only keep hold of those slots which they intend to operate in the next equivalent season. Still, there have been accusations that some may be holding on to slots that they never intend to operate again, just to stifle the competition. Vălean commented on the situation, saying,
“The initial slot waiver – adopted in the early days of the crisis – has allowed airlines to make financially sound decisions on whether to run flights, as well as avoid ghost flights. Nonetheless, our report also highlights certain problems with the current waiver, which are preventing airlines from using airport capacity efficiently.
“Slots are not always relinquished in time for other users or airports to plan operations as they would like; competition may also be distorted if airlines seek to benefit by increasing their market presence without using their slots and airport capacity correctly. Such behavior can hamper competition and can, therefore, harm EU passengers and freight customers. This must be remedied.”
She further said that she hoped airlines would abide by the agreed conditions voluntarily throughout the winter season, pending the adoption of enforceable conditions. This is due to the fact the Commission wants to grant the waiver extension right away, before the enforcement action can be formally adopted.
IATA previously said that an agreement had been reached with airlines, slot coordinators and airports to ensure the fair use of the waiver throughout winter. Let’s hope they can stick to it.