Aspectos legales de los Sistemas de Pago de la región

Impacts on hub carriers

A potential response for a hub carrier when faced with increasing opportunity costs of slots is to move flights outside the waves, or ‘widen’ the waves. Scope to do so is limited, however, as such actions would leads to longer transfer times and loss of transfer passengers. Nevertheless, the de- peaking strategies of American Airlines at Dallas and Lufthansa at Frankfurt show that opportunities do exist to widen the banks. Furthermore, hub carriers have limited opportunities to sell the slots they use for short-haul services. Unless the slots concern services with primarily OD demand, short-haul services are needed to generate sufficient demand for long-haul flights. Instead, hub carriers can be expected to increase their slot holdings when excess demand for slots restricts them in acquiring new slots in the current slot-allocation system (NERA 2004, p. 86). Given the network value attached to each new service, hub carriers can be expected to have a relatively high willingness to pay. The experiences with BA at Heathrow and at the high-density airports in the US support this hypothesis (Chapter 5).

Potential impact on short-haul services other than those of the home carrier and partners Feeder services that feed hubs at the other end of the route (AMS-FRA by Lufthansa, for example) can be expected not to change radically as a result of secondary trading. The value of the slots is relatively high owing to the contribution to the entire network. Opportunities for off- peak frequency cuts might exist (NERA 2004, p. 83) as the carrier can decide to concentrate on the services in its wave-system (peak period) using larger aircraft.

Potential impacts on low-cost carriers and charters

There may be scope for low-cost airlines. Cost-minimising low-cost carriers (such as Ryanair) generally choose uncongested, secondary airports for their operations. Yet, more yield-oriented carriers such as easyJet compete directly with full-service airlines at the major airports. This is mainly the case at congested non-hub airports and hub airports where there are no other airlines which value the slots more highly than the low-cost carrier, and which are attractive OD markets. NERA (2004) expects yield-oriented low-cost airlines to be able to increase their slot holdings at airports other than hyper-congested airports, such as Orly, Gatwick, and Vienna.

In general, charter airlines are less captive in a geographical and temporal sense than the hub carrier and its partners. They may change their home base more easily to another airport, in particular when the coordinated airport involved is part of a multi-airport system. When faced with the opportunity costs of their slots at congested airports, charter airlines may decide to ‘cash in’ and re-allocate their flights to other airports in the system, or even move to off-peak hours.

Potential impacts on long-haul airlines other than the home carrier and its alliance partners

There may be scope for the entry of competitive long-haul carriers on particular routes, in particular at congested airports with large catchment areas. These carriers may be able to benefit

from withdrawal of less valuable slots used for short-haul and less profitable long-haul services. The value of a slot purchase for a large home (hub) carrier relates to the value of its least profitable existing service at those slot times. It must consider redeploying slots within its own portfolio. A non-dominant carrier does not have alternative slots. Hence, non-dominant long- haul carriers may value slots most highly. The Heathrow market supports this. It is telling that BA has been consistently outbid for slots since competition for slots increased.

Potential impacts on regional carriers

Since regional carriers generally use smaller aircraft on shorter distances for flights which are generally operated at peak times, the opportunity costs of their slots are high compared to the value of those slots. Regional carriers operate flights at peak times because, first, the business travel peaks generally coincide with the peaks of the hub carrier. Second, regional carriers benefit from traffic feed to and from the hub carrier’s services in the peak periods. Given their dependence on the peaks and the hub carrier, there are few opportunities for regional carriers to move their operations to off-peak hours. One might expect existing regional carriers not to sell their slots or to disappear completely from congested hub airports, depending on the slot prices. Other impacts

Trading of existing slots may lead to so-called windfall profits for established airlines: they obtained scarce slots through grandfathering without making an adequate payment. The introduction of slot trading causes money to be automatically donated to established airlines; new entrants who have to pay for their slots are discriminated against (Stockmann 2006). Moreover, when new chunks of airport capacity become available and are allocated for 50% to new entrants, these airlines can sell their slots to others after a few years without having paid for them.

In addition, secondary trading can be expected to lead to a slight increase in business-planning costs. First, there are operational questions: secondary trading leads to complexity in the scheduling process: a newly acquired slot is only valuable for an airline if it can obtain a matching slot at another arrival/departure airport. This is more difficult for small airlines with smaller slot portfolios, and thus with less internal schedule flexibility, than for larger airlines with large slot portfolios (Barbot 2004; Geens 2006). Second, proposed transactions would need to be subject to a financial valuation (NERA 2004). NERA (2004) expects transaction costs associated with high-value trade to be of the order of 1 percent of the value of the trade. (see also Table 4.1) Stockmann (2006) has expressed the fear that opinion on airport-capacity expansion might change after secondary trading has been introduced and airport congestion has further increased. Until now, airlines have been in favour of extending airport capacities with the goal of creating more slots. Secondary trading might change this, as growth in the number of slots will reduce the value of their slot portfolios.

Finally, slots are allocated from the pool no more than 5 months before the start of the season. Aircraft orders have lead times of 12-18 months. Airlines cannot bid for slots without an aircraft, but it is difficult to commit to the purchase of an aircraft without certainty regarding the availability of the slot. For large airlines with large slot portfolios, this problem is manageable, since they have sufficient flexibility within their portfolios. The problem is greater for smaller airlines. Baby-sitting is then the only option.