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How slots are allotted to airlines, explained

How slots are allotted to airlines, explained

How slots are allotted to airlines, explained
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By Ameya Joshi  Nov 1, 2018 6:32:10 AM IST (Updated)

Worldwide there are different rules for slot management. However, they are (mostly) allotted based on World Slot Guidelines of IATA.

Spicejet and IndiGo announced flights to Hong Kong in quick succession, from Delhi and Bengaluru respectively. With Air India having publicly stated in the past that they are not getting desirable slots at Hong Kong for their flights from Mumbai, there was a lot of social media buzz on how did the two low cost carriers manage to get slots? Did they pay? Did they purchase? Did somebody lend it to them? Slot allocation is a complex process but there is a method in madness.

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Worldwide there are different rules for slot management. However, they are (mostly) allotted based on World Slot Guidelines (WSG) of International Air Transport Association (IATA). While airports like London Heathrow allow sale or lease of slots, airports in India do not follow this practice.
An Airport slot or a “slot” is a permission given by a coordinator for a planned operation to use the full range of airport infrastructure necessary to arrive or depart on a specific date and time.
IATA defines the airport in three categories – Level 1, 2 and 3, with 3 being the most congested.
A level 3 airport is one where:
  1. Demand for airport infrastructure significantly exceeds the airport’s capacity during the period for which slot allocation is being considered
  2. Expansion of airport infrastructure to meet demand is not possible in the short term
  3. Attempts to resolve the problem through voluntary schedule adjustments have either failed or have proved to be ineffective
  4. This mandates the airport to have a slot coordinator (team) which handles the process of slot allocation to balance capacity and demand.
    How does slot approval process work?
    The long drawn process involves newer airlines on a route request their respective governments to allocate them rights to operate the route under the Air Services Agreement. Once the airline is allotted the route, it becomes the “Designated carrier” and makes it eligible to file for slots with the origin and destination airport.
    The global scheduling calendar for airlines is divided in two seasons – Summer (From last Sunday of march to last Saturday of October) and Winter (the remainder, last Sunday of October to last Saturday of March).
    To give a snapshot of how early an airline has to plan, let us take the example of Summer 2019 schedule, which starts on March 31, 2019. Airlines have already filed their desired slot requests on October 4, 2018. After negotiations, the airline and airport representatives will meet (this time in Madrid) between November 13-16 to finalize the slots. The airlines have to handover the slots which they don’t intent to operate by January 15, 2019. IATA in fact publishes the schedule for future seasons as well. Airlines today know that they need to file the schedule for flights starting 27th October 2019 (Winter 2019 schedule) by May 9, 2019.
    Who allocates slots?
    Slots can be allocated only by the duly appointed coordinator of the airport and to airlines. The airline is expected to not intentionally operate services at a significantly different time or use slots in a significantly different way than allotted to them.
    An airline already operating to the airport is entitled to retain the slots on the basis of historic precedence. This is what is popularly known as the “use it or lose it” rule, where airlines have to operate at least 80% of the time during the period of slot allocation in the previous equivalent season (Last winter, Last summer, not the preceding season).
    IATA rules mandate that historic slots of an airline should not be withdrawn from an airline to accommodate new entrance. But slots can be transferred or swapped between airlines.
    How do coordinators allocate slots for new carriers?
    For an airport which is designated as Level 3, the airport has to declare the capacity and utilization of that capacity in advance.
    The priority is given to:
    • Historic slots
    • Changes to historic slots
    • All the available slots thereafter are part of the slot pool. Newly available slots (due to increase in capacity) are also part of slot pool. These slots are allocated to airlines requesting a slot in specific order.
      • New entrants to the airport: An airline which does not operate to the airport (Eg: Spicejet or IndiGo at Hong Kong)
      • 50 percent of the slots contained in the pool are to be allotted to the new entrants, unless the demand from new entrants is less than 50 percent
      • When new slots are allocated, an airline asking for year round operations and higher frequency will have higher priority
      • If the new entrant gets a slot within an hour of the time requested and the airline does not accept the slot, then the airline is not considered a new entrant!
      • Type of Service and Market: The balance of the different types of services (scheduled, charter and cargo) and markets (domestic, regional and long haul), and the development of the airport route network should be considered.
      • Do the flights always reach at the exact time across the season?
        Mostly no, especially in winters when strong head or tail winds can impact the block time drastically there is a huge variation in the approved slot and the actual arrival times. Airports are accommodative towards genuine reasons and based on historic data help airlines offer a slot which is more realistic based on their historic arrival times. This helps better plan the capacity on ground. Airlines are encouraged to change departure or arrival time to better suit the historic block times.
        What Next?
        Spicejet & IndiGo will both have presence at Hong Kong and hence won’t be considered as new entrants for the next set of expansion that the airlines plan but it any airline wants to start flights from a point in India which is poorly connected (Eg: Hyderabad) or unconnected (Eg: Lucknow), the priority for slot at the airport changes as compared to the airline asking for flights from Mumbai or Delhi which are relatively well connected.
        Its same or similar policy which helped Go Air get slots in Mumbai for their flights to Male and Phuket, both unconnected destinations from Mumbai. The airport has not granted domestic slots for a long time and has been selective with time bands for International flights due to congestion. Go Air got day time slots for their flights.
        With airlines in India now looking at foreign shores, every rule will be used effectively to get the best slots at airports in India and abroad.
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