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for international to change, retime or acquire new slots is very limited.” The challenges do not stop there. The Chinese do not use email facilities to process slot communications with airlines, as is now standard worldwide, preferring to use Type-B/ Telex messages. And though the co-ordination of slots is handled regionally depending on the airport, all messages are initially processed by a central office. This causes delays in confirmation and lacks the transparency airlines crave.
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A bigger concern is slot auctions, with Guangzhou Baiyun International and Shanghai Pudong International airports identified by the Chinese Central Government for a pilot programme. “Slot auctions mean those carriers with the ability to pay the most for the airport slot are granted access to the airport, not necessarily those airlines that will utilise the slot in the interests of the airport or passengers,” says Maughan. “This is exactly what we’ve seen happen as a result of the Guangzhou auction; the four biggest airlines benefitted rather than opening up the market to new entrants.” Maughan believes that auctions,
by their very nature, lead to significant costs for airlines to secure the ability to operate at a specific airport. These costs could threaten route viability and damage connectivity. Moreover, as they constitute a barrier to entry, they could limit competition. In both cases, consumers lose out by having less choice and value.
The problems run deeper. Studies have shown that an auction system at both ends of the route is impractical on account of its complexity, making a global system based on primary trading a non-starter. Similarly, a unique methodology in one country means that airlines are faced with different procedures at either end of a route. A slot-auction process also raises the questions of slot ownership and how the money generated from an auction is spent. “And auctions have the potential to create perverse incentives for either airports or government agencies to restrict capacity to create scarcity value,” Maughan points out. “Again, this would harm connectivity and limit the realisation of the economic value that aviation can generate.”
IATA does, however, support secondary trading. Fundamentally different from auctions, this is a mechanism which allows an airline
that can no longer make best use of its historic slot to find another carrier to take it in exchange for acceptable compensation. The scheme is in place at London Gatwick Airport and London Heathrow Airport and the forthcoming EU Aviation Package is likely to recommend that all European airports should adopt it to ease congestion fears.
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IATA continues to work with Chinese authorities to address these issues. Regular meetings and presentations complement formal training courses and seminars targeted at regional slot managers, airport personnel and airline staff. Recent improvements include the improved timing of international slot allocation, for example.
The full implementation of the WSG remains the goal, however. This would give Chinese aviation a robust platform for handling the phenomenal growth in aviation coming its way.
The WSG provide certainty of access, as airlines need to know how they can use their aircraft, and the flexibility to meet changing market needs. Most important, it is a free and sustainable process to ensure fairness and competition at airports experiencing ! the highest congestion.%
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