In an article discussing the ramifications of the European Commission's proposal for airlines to retain slots during the winter of 2021-2022, concerns were raised about the potential impact of a 60% use-threshold compared to the usual 80%. Given the uncertainty in passenger demand due to government-imposed travel restrictions, the call for greater flexibility and a lower threshold was advocated. Concurrently, other regulators were implementing more comprehensive slot alleviation rules for the winter season. Eventually, the European Commission reduced the threshold to 50%.

The article highlights the invaluable insights provided by Eurocontrol's data, showcasing the drastic effects of the pandemic on airlines. In 2021, the 36 airlines in the data operated just 50.9% of 2019's flights, with 2020 seeing a mere 40.9%. Notably, all listed passenger airlines significantly reduced their schedules and utilized the slot alleviations offered by the Commission. A summary chart of Eurocontrol's data is provided for reference.

Importance of Slots

Under normal circumstances, many airports face capacity constraints, with nearly 200 European airports having either full or partial slot restrictions. Slot allocations at these airports distribute limited capacity according to agreed rules, preserving competition, consumer interests, and aiding airlines in long-term planning. The loss of slots, even in favorable times, significantly impacts an airline's operations, as well as the economy and society it serves. Airlines operating from airports without slot restrictions enjoy greater flexibility in their flight operations.

However, the advent of the Omicron variant brought unforeseen challenges.

Recent remarks by Lufthansa CEO Carsten Spohr underscored the lengths airlines may go to retain their slots, with Lufthansa Group facing the prospect of 18,000 unnecessary flights to comply with current European rules.

In response, Belgium's transport minister called for a Commission review, citing fluctuating passenger demand, a labor force grappling with Omicron infections, and constantly shifting travel regulations, all necessitating greater flexibility.

The Call for Flexibility

The article advocates for aligning European business conditions with those in other jurisdictions, especially for airlines with extensive global networks. This alignment need not require a full slots waiver but reasonable exceptions recognizing extraordinary demand situations, such as the current scenario in Europe.

Current regulations offer relief to airlines unable to fully utilize their slot series due to travel bans and strict restrictions. However, for airlines following a hub business model, a travel ban on a long-haul international flight can significantly impact demand for connecting short-haul flights. Up to 80% of passengers on a long-haul flight may originate from another airport. For instance, a passenger flying from Brussels to Delhi via Frankfurt would reconsider flying to Frankfurt if the Delhi flight is canceled due to government restrictions on flights to India.

The plea to the Commission is to accommodate commercially unviable low demand resulting from such scenarios. This request is not only reasonable but essential. The Commission has been lauded for its pragmatism during the crisis. Leveraging the flexibility within existing rules would level the playing field for European airlines, enabling rational and sustainable scheduling decisions based on demand.

Assessing Real Demand

To achieve this, the article suggests the Commission should consider measures of actual demand. While Euro control's statistics have been invaluable, they may present a more optimistic picture than airlines experience, focusing on aircraft movements rather than passenger loads. Even the latest Euro control data describes a "freefall" of flight movements amidst the ongoing challenges.

Urgency and Adaptation

Enforcing that only hard bans and travel restrictions justify non-use of slots could lead to significant environmental and financial harm through unsustainable near-empty flights. Losing slots undermines years of investment in building efficient global networks vital for Europe's economic vitality.

Given the pandemic's unpredictable nature, policy evolution must match its speed. Flexibility is crucial to enable airlines to respond to market conditions without enduring long-term network penalties.

Conclusion

While the Commission's pre-crisis slot policy was considered industry-leading, today's global regulators are diverging. The article urges the EU to regain leadership by accepting exceptionally low demand as a temporary justification for not meeting slot retention thresholds. In the ever-changing business landscape of the pandemic, such flexibility is key to ensuring Europe's robust global air transport network fuels its economic recovery.

Source: hsonetwork