Through Travel
a non-profit organisation called Airport Coordi- nation Limited steps in and re-allocates the slot according to strict criteria designed to encourage competition and facilitate new entrants. In practice, airlines will do almost anything to hold onto a slot at Heathrow, and are alarmed by the “use it or lose it principle”, whereby an airline that fails to use a slot at least 80% of the time has to surrender it. In order to keep slots “warm” Qantas used to fly a small commuter jet from London’s main airport each morning, park it and fly it back in the afternoon. A British Mediterranean Airbus has famously shuttled between Heathrow and Cardiff for the same reason.
So how does a new entrant get in, or an existing airline expand? By trading slots on the “grey” market. This is nothing illegal – simply the way that a market in slots has grown up. Airline A, which wants to buy a slot, asks for a pair at some of the rare times when Heathrow is not full – such as late on a Saturday evening. Airline B, which has slots to sell, officially exchanges these with Airline A, but some cash changes hands as well. After “open skies” allowed more airlines to
serve the US from Heathrow, the bidding went so high that prime slots were changing hands for tens of millions of pounds. With the recession, prices have fallen, but as aviation picks up again you can expect rates to increase once more.
That is until a third runway is finally built, right? Not necessarily. A technique known as “mixed mode” could greatly expand the number of take-offs and landings at Heathrow. At present,
one of the runways is used for landings and the other for take-offs from dawn until mid- afternoon, whereupon the departure and arrival sides are swapped. This is to limit the suffering of residents under the flight paths. The industry is keen on using both runways for landings and take-offs, squeezing perhaps 40% more capacity out of the airport, but the coalition government has ruled this out, along with a third runway.
What effect does this have on the shape of airline networks? It encourages them to fly bigger aircraft, further. The A380 “superjumbo” is effectively an aircraft built for Heathrow. It allows Qantas, Singapore Airlines and Emirates to generate more business out of the same number of slots. At the opposite end of the spectrum, most British regions can tell a story about losing their links to the world’s premier international airport. From Guernsey and Newquay to Inverness and Leeds-Bradford, airlines have abandoned domestic routes because they can, bluntly, make more money on other routes. One solution proposed is the new high-speed rail link running direct to Heathrow.
Do other nations allocate slots in the same way? No. Few other countries have the problem that the main London airports have – indeed, many other cities would see a slot shortage as a good problem to have. But there has been plenty of controversy about how slots at constrained airports such as Paris Charles de Gaulle and Milan Linate have been allocated in the past, with accusations of regulators favouring the national carrier.
If you think you know better, or you
have anything to add, contact Simon at
simoncalder@ttglive.com
take-off?
Manchester airport has the Emirates A380 superjumbo and offers the most destinations out of all UK airports
And how exactly does this benefit the travel agent? Because understanding the way that slot allocation influences travel helps agents to help their customers. For example, the scarcer slots are, the more airlines tend to focus on a limited number of destinations. The UK airport with more destina- tions than any other is not one of the big three London airports, but the UK’s fourth-busiest – Manchester. So, a Midlands agent shouldn’t assume the best range of links is from London. In addition, as anyone who has ever used
Heathrow will know, there is normally a queue of aircraft waiting to leave and another queue waiting to land. For demanding travellers who want to minimise delays, or anxious flyers who want to spend as little time as possible on an aircraft, then a flight from an unconstrained airport is the answer.
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