Singapore and Hong Kong-based regulators are threatening retaliation against the European Union’s (EU) plans to utilize airport slots this fall. After introducing slot waivers in 2020, The EU is set to enforce a 50% ruling from October this year, which could force airlines operating in Europe to run at a loss.
An initial helping hand
Following the escalation of the coronavirus outbreak in early 2020, passenger demand completely dropped. The situation caused airlines to operate ghost flights in order to keep hold of their airport slots. Nonetheless, aviation boards eventually started to suspend the “use it or lose it” policy. This factor not only helped carriers to save costs in such sensitive conditions, but it undoubtedly did its bit to curb unnecessary emission output.
With conditions improving in several markets, this summer, the European Union has been reviewing its approach. In July, the European Commission (EC) said that the 50% use rate, which is down from 80% in pre-pandemic times, has been chosen to make sure that there is an efficient use of airport capacity and will ultimately benefit customers. The EC also added that it granted exceptions so operators don’t need to reach 50% while strict measures such as quarantine remain active.
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It’s not all smooth sailing
Altogether, while areas such as Europe and the United States are seeing positive trends in recent months, other markets, especially in Asia-Pacific are seeing a slower return amid tougher conditions in many countries. Notably, while many European carriers have numerous short and medium-haul routes in their network, Asian carriers naturally operate long-haul services to Europe, a segment that is taking longer to adapt across the globe.
With the EU’s stricter stance this summer and the world still dealing with the complications of the pandemic, officials controlling key airports across Asia are gearing up to implement similar measures on European carriers in response. This situation is raising concerns about a tit-for-tat approach, that has been seen in other fields in recent years.
“Is it a trade war? Certainly the germ of one,” shared former Australian aviation negotiator Peter Harbison, chairman emeritus of the Sydney-based CAPA Centre for Aviation consultancy, as reported by Reuters.
“And it will be accentuated as more airlines collapse and international markets remain closed, or at best, uncertain.”
Cathay Pacific recently warned that the slower recovery in its home of Hong Kong means it could risk losing crucial foreign airport slots. If this happens, its headquarters could lose its hub status. Moreover, the likes of China Airlines and Korean Air have expressed their frustrations about slot rulings.
Furthermore, Daniel Ng, director of air transport at the Civil Aviation Authority of Singapore, shared that his country included provisions to ensure fair treatment. Authorities in both Singapore and Hong Kong have confirmed that unspecified reciprocity provisions are in place.
Altogether, there is still uncertainty around the world in regard to how the health crisis will impact society. Virus waves are still emerging and authorities are continuing to chop and change their travel policies. So, leeway on slots will still go a long way to ensure airline survival in this next chapter.
What are your thoughts about the current slot waiver policies? What do you think the best approach would be? Let us know what you think in the comment section.