With Flybe gone and other airlines stopping in to fill the void, the question has to be asked, what will happen to Flybe’s valuable airport slots? While all eyes will be on the four slot pairs at London’s Heathrow Airport, estimated by the Independent to be worth £100m, it also holds positions at a number of other slot controlled airports. So who gets them?
Flybe’s airport slots
Airport slots are allocations of times and days when airlines can take off and land at congested airports. They don’t just assure the use of the runway itself, but also all the other airport facilities such as a gate, ground handling, baggage services etc. Having this level of organization is crucial to ensuring the smooth operation of busy airports.
IATA estimates that over 200 airports are slot controlled worldwide. In the UK, that includes all the London airports as well as Manchester and Birmingham. During the summer season, Bristol (BRS) also becomes slot controlled.
Flybe had slots at a number of these airports, and as such, they are now up for grabs for other airlines wanting to operate from there. But who would want them, and who will get them?
Who will bid for Flybe’s slots?
We can take some inspiration for this from the outcome of Thomas Cook’s demise. Back when the century-old travel firm folded, it had slots at popular UK airports including Gatwick, Manchester, Birmingham and Stansted.
Unsurprisingly, the slots at Gatwick attracted the most attention. Interest was noted to have been received from operators like Wizz Air, British Airways’ owner IAG, Virgin Atlantic and others. In the end, the 12 Gatwick slots went to easyJet, along with six at Bristol. The airline paid £36m for the privilege, the lion’s share of which was thought to have been spent on the Gatwick slots. Jet2 acquired its slots at Manchester, Birmingham and Stansted.
When Monarch failed, British Airways bought 20 of its Gatwick slots, while Wizz bought slots at Luton. The entire transaction was believed to be around £54m, with £50m of that spent on Gatwick alone. That was a relative bargain compared to a single slot pair at Heathrow that famously sold to Oman Air for £59m.
We can expect to see some of the same faces popping up to bid for Flybe’s now vacant slots. easyJet, Jet2, Wizz, Ryanair and the like are always on the lookout for bargain slots, and will undoubtedly be highly interested in the non-Heathrow positions. British Airways and Virgin will almost certainly go head to head for the Heathrow slots, but could face competition from the likes of JetBlue and perhaps even Vistara who have both been clear on their Heathrow aims.
One thing is for sure; whoever does want the slots, particularly those at the London airports, is going to have to have pretty deep pockets. Flybe’s administrators will want to obtain the highest price possible for these slots, and with the summer season fast approaching, airlines will be keen to get them secured.
What about the PSO routes?
The UK government has earmarked some of Flybe’s previous routes as Public Service Obligation routes (PSO). These routes are deemed to be critical to local communities and economies, and as such airlines flying them will receive government subsidies in the event that the route is not commercially profitable.
Examples of these include Cornwall Newquay to London, Dundee to London and Anglesey to Cardiff. Flybe previously operated some PSO routes, so does that mean its slots will be protected for those routes in the future?
Not exactly. While PSO routes do mean slots get ring-fenced, it doesn’t mean it will be at a specific airport. Take Flybe’s PSO route from NQY to LHR, for example. Back in January, the airline came under fire for switching the route from Heathrow to Gatwick, thereby freeing up its Heathrow slots for European travel. It was criticized, but it was still fulfilling its PSO obligations.
Although there must be some slots kept at airports, when it comes to London, that can be any airport. That means not only Heathrow and Gatwick, but also Luton, Stansted and even City or Southend. Some of these airports are far less slot constricted than Heathrow, and as such the PSO routes do not guarantee the Heathrow slots will be kept for them.