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Regulators suspend slot rules, opening door to deeper airline cuts

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Expect to see another tranche of significant cuts from airlines in the coming days, lasting through June 2020. EU regulators are the latest to approve a change to the way airport slots are accounted for, opening up the opportunity for carriers to trim flights and conserve cash as the COVID-19 crisis wears on.

Airlines are in crisis. The collapse in demand is unprecedented. And airlines are struggling to match capacity to the fast-changing situation. The Commission’s decision to suspend slot use rules until June means that airlines can make these critical decisions immediately—without worrying about the impact on future availability of slots. This is much needed and most welcome. However, given all the uncertainties, it is disappointing that the decision does not cover the full season.

– Rafael Schvartzman, IATA’s Regional Vice President for Europe

At more than 200 airports around the globe demand exceeds operational capacity. As a result airlines are allocated slots for their aircraft to arrive and depart. These slots allocations are split for summer and winter operations and are retained year to year so long as an airline uses it 80% of the time. That’s not a problem when the industry is riding a wave of expansion. But given the recent and precipitous collapse it created a major challenge.

Multiple airlines indicated that they would fly planes regardless of demand as they want to keep the slots secure for whenever the recovery finally takes hold. But that presents both an economic and environmental mess. Airlines, through their global trade group IATA, requested that the 80% rule be suspended through the end of the Summer 2020 season in late October, allowing for more rational behavior today to help get through the tough times.

Regulators in Asia have mostly agreed to that full-season plan while the US and Europe chose to only grant part of the request, waiving the requirements through May. It is a significant step forward for the industry, even as it means a greater retrenchment in the near term. European airports represent roughly half the total slot-allocated airports in the world for the summer season.

The FAA is waiving the 80-percent-use requirement through May 31, 2020 for U.S. and foreign airlines that have affected flights. In doing so, the FAA expects that U.S. carriers will be accommodated with reciprocal relief by foreign authorities at airports in their countries, and may determine not to grant a waiver to a foreign carrier whose home jurisdiction does not reciprocate.

American Airlines, for example, made multiple announcements in recent weeks trimming its operations. In its last two, however, it added mention that the cuts “assume no slot waivers are in place.” Moreover, “American will continue to review its network and make adjustments as needed if waivers are granted.” With the slot waivers in place the airlines can now cut deep, even at the most congested airports, reducing operations to match the lack of passenger demand.

While IATA welcomes the relaxed rules it also notes that airline schedule planning and ticket sales takes time. The organization re-upped its call for a full season rules suspension, with a decision by 15 April 2020 to facilitate the rebuilding of airline schedules in the peak summer season.

More on COVID-19 and the airlines affected

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About Seth Miller

Seth Miller has over a decade of experience covering the airline industry. With a strong focus on passenger experience, Seth also has deep knowledge of inflight connectivity and loyalty programs. He is widely respected as an unbiased commentator on the aviation industry.

He is frequently consulted on innovations in passenger experience by airlines and technology providers.

You can connect with Seth via email, on Twitter, Instagram, and LinkedIn.

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