Under the current EU and international slot allocation systems, airlines are not charged for slots allocated to them which they do not use. The IATA scheduling guidelines require that airlines return unwanted slots before an allotted time in advance of the relevant season (31 January for the summer season and 31 August for the winter season) but, for most EU airports, failure to meet this deadline has no associated sanction.22
22 Under Council Regulation 95/93 this deadline is used for the purpose of calculating historic rights (the 80-20 rule);
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In some cases, it will be in airlines’ interests to request more slots than they are likely to need, because airlines with a larger slot portfolio have greater flexibility to finalise their schedules. However, at times where demand exceeds capacity there is an opportunity cost associated with slots which are allocated and are not used. It may not be possible for coordinators to reallocate slots which are returned late, even if demand for the slots exceeded supply earlier in the season. As the opportunity costs are not borne by the airlines retaining unused slots, this may result in an inefficient outcome.
There is some indication that this inefficiency is substantive. It is certainly a cause for concern and has been drawn to our attention repeatedly, primarily by coordinators and airport operators.
We have only limited data on late returns of slots to the pool, though the figures we do have suggest that this is a significant problem. Late returns were particularly prevalent for the Summer 2002 season, where the proportion of all slots allocated at the slot return deadline (31 January 2002) which were not used was between 8 and 13 per cent for the seven EU airports for which we have data.23 This was some months after 11 September 2001, and the
associated sharp fall in air travel. There appear to be around 25 per cent fewer late returns in other seasons, ie around 6 to 9 per cent of all slots allocated at the deadline would not be used for many of the major EU airports.
Several coordinators are able to alleviate the inefficiency associated with late returns by initially allocating more slots than would be optimal under a range of weather conditions. They are able to predict that a large number of slots will not be used and therefore that delays will be contained.
This “second best” approach is not possible for a limited number of airports where the capacity constraints are specified in legislation. In these cases there is little opportunity to balance potential delays with efficient use of capacity. The outcome can be poor utilisation of airport slots. There are two main examples of this: the very congested airports of Düsseldorf and Orly. At Düsseldorf, where capacity is legally determined at 38 movements per hour (with additional night time restrictions), initial demand exceeds capacity during the summer season throughout the day, with the exception of some hours at the weekend. But for the Summer 2002 season, 12 per cent of slots allocated were not used. The binding legal restriction at Orly is 250,000 movements per year, and demand greatly exceeds supply. However, in 2002, only around 90 per cent of these movements occurred.
Figure 4.2 shows patterns of use at an example airport for a particular day. Requests exceed capacity for much of the day. Movements are allocated on the basis of these initial requests
23 The airports are AMS, CDG, CPH, DUS, LGW, ORY and STN. MAD is excluded and is discussed below. We do
not have equivalent figures for LHR and FRA, but can calculate that around 95 per cent of all runway capacity between 7am and 7pm local time on typical weekdays is used.
55 so that all capacity constraints are satisfied. Actual use however is significantly below the movements allocated.
Figure 4.2
Requests, Allocation and Use of Slots at an Example EU Category 1 Airport
-50 -40 -30 -20 -10 0 10 20 30 00:00 04:00 08:00 12:00 16:00 20:00 00:00 Time Of Day
Number of Slots Minus Capacity
Initial Requests Initial Allocation Actual Use
Many of the slots which are not used will have historic rights maintained. Under the 80-20 rule, airlines need only use 80 per cent of a series of slots. It is also possible to manipulate the 80-20 rule, though close monitoring may reduce such opportunities. For example, we understand that in some cases airlines are able to switch services from a highly utilised slot series to a slot series with poor utilisation to ensure that the 80 per cent threshold is reached on both series. As the monitoring of the 80-20 rule does not necessarily record the time of flight, airlines may be able to manipulate the 80-20 rule without disrupting their schedules.
The bankruptcy exemption of the 80-20 rule can last for many months, and has also resulted in slots for which there is excess demand not being used. The recent suspension of the 80-20 rule is another example where slots for which excess demand exists may not be used;24 we
understand that some of the new slots allocated at Orly in the wake of the Air Liberté bankruptcy will not be used because of this exemption, even though demand for such slots greatly exceeded supply.
Indicative evidence from Spain confirms that airlines would return more slots within the deadlines if they had financial incentives to do so, thereby permitting improved utilisation
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of slots: when fines were established for the late return of slots by Royal Decree in November 2001, the proportion of slots returned within the deadline increased from around 7 per cent to around 14 per cent; only a further 2 per cent were not used.