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How SpiceJet became the biggest beneficiary of the slots vacated by Jet Airways

How SpiceJet became the biggest beneficiary of the slots vacated by Jet Airways

How SpiceJet became the biggest beneficiary of the slots vacated by Jet Airways
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By Ameya Joshi  Jun 11, 2019 6:58:01 AM IST (Updated)

Spicejet became the only operator that could induct both – the crew and the planes from Jet Airways and start operations at the earliest. For other airlines, to induct the B737 meant lengthy processes, manuals and approvals to add a new type to their Air Operating Permit (AOP), writes Ameya Joshi.

In a recent annual general meeting, airline group International Air Transport Association (IATA) unanimously passed a resolution urging governments to adhere to global slot allocation guidelines and it has come at a time when the rules have been making news in India.

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IATA has been on the forefront for demanding a single slot coordinator in the country. India is one of the handful of countries that do not follow the international slot allocation timelines for its domestic schedule, opting for its own calendar and process instead. As Jet Airways suspended operations, nearly 750 slots were left vacant at airports, which were being distributed across airlines by a committee which included the regulator (DGCA), representatives of private airport operators and those of state-run Airports Authority of India.
However, the committee came up with a set of rules that were not in sync with the World Slot Guidelines (WSG). There were reasons.
No rules have envisioned a sudden glut of as much capacity and when such a capacity is taken out of the system at a short notice, the rules related to the allocation of half of those slots to new players do not help simply because there aren’t any new players around!
Let’s Play Slots
The new set of rules prioritised slot allocation — starting with the addition of capacity. In April, IndiGo was emerging out of its pilot crisis, GoAir had parked planes at various places, Vistara was preparing for additional inductions at the end of 2019 and Spicejet had received a setback from the B737 MAX8 grounding, 13 of which are part of the airline’s fleet.
The guidelines also stated that priority will be given to airlines serving virgin and underserved routes – without stating the list of underserved routes! Remember, the aviation ministry’s statement harped that the main objective behind the speedy slot allocation was to alleviate passenger misery due to the Jet crisis. If that was the case, the slot should have been handed to routes that Jet operated — not underserved routes!
 
Also, a mere comparison of loss of frequency or capacity is not enough to term a route underserved because the route could have seen over capacity and the drop in capacity is merely a rationalisation of capacity and not under capacity.
The last important factor which was considered for allocating slots was the proposed date of commencement. And all of this was without withdrawing capacity from existing routes – something which IATA doesn’t talk about in its WSG.
Playing Favourites
There happened to be only one airline in the country which could satisfy the criteria set in the rules and that airline was Spicejet. Immediate availability of crew was a challenge for every airline and the solution was recruitment of crew from Jet Airways who had not been paid for a few months and were now staring at a blank future. SpiceJet operated Boeing 737s, the same type of plane as Jet. All other operators in the country — IndiGo, GoAir, Vistara and AirAsia India — are Airbus operators.
While the crew was equally available to every airline, it takes time for a B737 pilot to train on the A320 and start flying the A320. This involves exams and time on the simulator, which are booked for months in advance.
Thus Spicejet became the only operator that could induct both – the crew and the planes from Jet Airways and start operations at the earliest. For other airlines to induct the B737 meant lengthy processes, manuals and approvals to add a new type to their Air Operating Permit (AOP).
By the method of elimination or stroke of luck, Spicejet started inducting the planes, the crew and cornering the slots at major airports in the country. When asking how Spicejet got so many slots while other airlines did not, the official spokesperson said: “According to the Press Release issued by the Ministry of Civil Aviation dated April 23, a committee was constituted by the government consisting of key stakeholders including DGCA, AAI, slot coordinators and airlines to allocate slots "to those airlines which bring in additional capacity.”
The spokesperson said this was a completely transparent system put in place by the government to ensure that existing flights are not cancelled by airlines in order to operate new ones which would further inconvenience passengers. “Any rule is applicable to SpiceJet as much as the same is applicable to any other operator or entity in accordance with the law,” he said.
The Big Beneficiary
However, going by the induction, it looks like Spicejet gained the most on the back of the rules set by the slot co-ordination committee. This led to a new set of rules and there probably lies the rise and rise of Spicejet!
The scramble for capacity addition had the only player in the scramble – Spicejet. IndiGo, GoAir and AirAsia India opted to not induct any B737s which were readily available with the crew and while A320s were available in the leasing market, getting the crew was challenging and hence the airlines have been able to only marginally expedite the induction to make the most of the slots at airports across the country.
In the end, one wonders if the rules framed were on the basis of principle of natural justice or is it sheer bad luck of others that there was only a single B737 operator in the country. Today there are two such operators in India: Vistara has scrambled to get certified as a B737 operator in addition to the A320 and would induct four B737s in quick succession. IndiGo, GoAir and AirAsia India have looked the other way round and let go of this opportunity.
Incidentally, these slots are (so far) temporary in nature and a mad scramble could erupt when the slots are available for allotment in the winter schedule.
Going by the experience, it is about time that a revised policy on domestic slot allocation is needed to factor in demise or suspension of an airline and a policy which will be in favour of passengers and airlines. For now,  the World Slot Guidelines (WSG) is merely a set of rules — not definite — and the local regulators do have the rights to frame rules and implement them.
What matters is how fair is the system. As the French philosopher Victor Cousin said, “The universal and absolute law is that natural justice which cannot be written down, but which appeals to the hearts of all.”
 
Ameya Joshi is the founder of aviation analysis blog NetworkThoughts.
Read Ameya Joshi's columns here
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