Wizz Air CEO Jozsef Varadi has condemned Air France CEO’s comments about the use-it-or-lose-it slot rules. Ben Smith of Air France stated that the suspension of slots rules should continue while airlines recover. However, Varadi has said it’s time for the rule to return. Some airlines are pushing to have the rule suspended until the end of this year.
As the global pandemic hit last year, one of the first major decisions to help airlines was the suspension of traditional airport slot rules. Commonly referred to as the use-it-or-lose-it rule, airlines were forced to use 80% of take-off and landing slots at oversubscribed airports or would be forced to give it up to competition the following season.
With the global downturn, the suspension of this crucial rule meant airlines could operate flights when possible rather than operating empty aircraft. Suspending the rule certainly made sense at the time. However, there is now disagreement about when the rule should be reinstated.
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The rule might benefit some airlines above others
As reported by Reuters, Air France CEO Ben Smith and Wizz Air CEO Jozsef Varadi both spoke at a panel at the Paris Air Forum today, and they had very different views on the situation. Smith said the lower threshold for the rule was “logical” and said,
“We don’t see our industry in a position yet to put that in place.”
But Varadi disagreed. He said that the continued suspension of slot rules unfairly benefitted state-owned airlines or airlines receiving government bailout money. Varadi went on to say that governments were “protecting that investment” made in airlines by not reinstating the slot rule. The French government recently increased its stake in Air France-KLM to 28.6%.
It easy to see both perspectives in this situation. As European borders open and short-haul makes a much faster recovery than long-haul, low-cost, short-haul airlines will want to see a return to pre-pandemic aviation. However, for airlines like Air France-KLM, the suspension of the use-it-or-lose-it rule continues to make sense.
Inconsistent recovery poses a problem
As more airlines worldwide look to recover, it is going to be hard to implement global standards. The difference in demand between domestic and international flights and between long-haul and short-haul operations make it challenging to implement standardized rules that will fairly apply to all airlines.
Another potential difference in recovery rates was pointed out by Smith. Smith highlighted that budget airlines are better positioned to utilize foreign crew on cheaper contracts. This would aid a faster recovery at a lower cost.
As traffic returns throughout the summer season, the slots rule may have a big impact on airlines’ operations. Keeping the rule suspended benefits the major carrier who have yet to see enough demand. This puts carriers on the road to recover, looking to expand at a disadvantage. But in contrast, reinstating the rule could play havoc on already struggling carriers.
What do you think? Should the slots rule be reinstated now? We’d love to hear what you think, so let us know in the comments.