AirWhizz

A few weeks ago, SpiceJet & IndiGo announced that they will be connecting Delhi And Bangalore to Hong Kong respectively.

With Air India having publicly stated in the past that they are not getting desirable slots at Hong Kong for their flights from Mumbai, there was a lot of social media buzz on how did the two low-cost carriers manage to get the slots.

Did they pay? Did they purchase? Did somebody lend it to them?

These questions made us wonder how is airline slot allocation done. It’s a very complex process but there is a method in the madness.

How Is An Airline Allotted An Airport Slot?

Worldwide there are different rules for slot management. However, they are mostly allotted based on World Slot Guidelines (WSG) of International Air Transport Association (IATA).

While airports like London Heathrow allow sale or lease of slots, airports in India do not follow this practice.

An Airport slot or a “slot” is a permission given by a coordinator for a planned operation to use the full range of airport infrastructure necessary to arrive or depart on a specific date and time.

IATA puts airports into 3 different categories- Level1, Level 2, Level 3, with Level 3 being the most congested in terms of airplane movement.

In simple terms, a level 3 airport is one where:

• Demand for airport infrastructure significantly exceeds the airport’s capacity during the period for which slot allocation is being done
• Expansion of airport infrastructure to meet demand is not possible in the short term
• Attempts to resolve this problem through schedule adjustments have either failed or have proved to be ineffective

This mandates the airport to have a slot coordinator (team) which handles the process of slot allocation to balance capacity and demand.

What Is The Process For Applying For An Airport Slot?

If a new airline wants to operate on an air route, they have to request their government to allocate them rights to operate the route under the Air Services Agreement.

Once the airline is allotted the route, it becomes a “Designated carrier” which makes it eligible to file for slots with the origin and destination airport.

The global scheduling calendar for airlines is divided into two seasons – Summer (From last Sunday of March to last Saturday of October) and Winter (the remainder, last Sunday of October to last Saturday of March).

To give a snapshot of how early an airline has to plan, let us take the example of Summer 2019 schedule, which starts on March 31, 2019:

• Airlines have already filed their desired slot requests on October 4, 2018. After negotiations, the airline and airport representatives will meet between November 13-16 to finalize the slots.
• The airlines have to handover the slots which they don’t intend to operate by January 15, 2019.
• IATA in fact publishes the schedule for future seasons as well.

Airlines today know that they need to file the schedule for flights starting 27th October 2019 (Winter schedule 2019) by May 9, 2019.

It’s a pretty long process and the wait may seem forever, but this process gets a lot of structure to the airport slot allotment procedure.

Who Allocates These Slots?

Slots can only be given by an airport coordinator who has been appointed to that specific airline.

The airline has to operate within the terms that have been agreed between both the parties. This means that airlines cannot intentionally operate services at a significantly different time or use slots in a significantly different way than allotted to them.

An airline who has already been operating in a slot is given preference, based on the historical data.

This is popularly known as the “use it or lose it” rule, where airlines have to operate at least 80% of the time during the period of slot allocation.

IATA rules mandate that historic slots of an airline should not be withdrawn from an airline to accommodate new entrance. But slots can be transferred or swapped between airlines.

How Do Airport Coordinators Allocate slots To New Airlines?

A Level 3 airport has to declare beforehand, its capacity and how airlines utilize this capacity.

All the available slots thereafter are part of the slot pool. Newly available slots (due to increase in capacity) are also part of this slot pool.

These slots are allocated to airlines in this specific order:

• 50 percent of the slots contained in the pool are to be allotted to the new entrants(an airline that has never operated on that route), unless the demand from new entrants is less than 50 percent
• When new slots are allocated, an airline asking for year round operations and higher frequency will have higher priority
• The type of service given by the airline(scheduled, charter and cargo) and the market (domestic, regional and long haul) in which the airline operates is also a huge factor.
• The location from the flight will start is also important. For example, a flight from Delhi or Mumbai, which are well connected, will be preferred over flights from Lucknow, whose flight network is not very large.

If the new entrant gets a slot within an hour of the time requested and the airline does not accept the slot, then the airline is not considered a new entrant.

How Strict Are Airports With Airlines Following Slot Timings?

During winters and monsoons, most airlines are not able to follow the schedules timing since the weather conditions are not good , which brings a huge variation in the approved time slot and the actual arrival time.

Airports are accommodative towards genuine reasons and based on historical data, help airlines offer a slot which is more realistic based on their historic arrival times.

Spicejet & IndiGo will both have a presence at Hong Kong and hence won’t be considered as new entrants for the next set of expansion. With airlines in India now looking at foreign shores, every rule will be used effectively to get the best slots at airports in India and abroad.