Airport slots

Many airports around the world are congested because they do not have enough capacity to meet demand from the airlines and other aircraft operators who wish to use them. An airport slot is basically permission to use the infrastructure (runway, terminal, apron, gates, etc.) of an airport to take off or land on a specific date and at a specific time. Slot allocation is used, at the most congested airports (known as Level 3 or ‘coordinated’ airports), to allocate and manage limited capacity, with the aim of maximising the efficiency of an airport.

The UK has 18 airports classified as ‘congested’, eight of which are Level 3 ‘coordinated’ airports. Heathrow, Gatwick, London City, Stansted, Luton, Manchester and Birmingham are all coordinated airports. Bristol is also coordinated from 23:00 to 07:00 in the summer season. A diverse mix of UK and foreign carriers hold slots at the UK’s busiest airports. In 2018, 185 airlines, including 170 non-UK based airlines, operated at the UK’s Level 3 airports. A small number of carriers have sought to create ‘hubs’ at key airports, improving their efficiency and allowing them to create route networks, but this has meant that they have become dominant carriers at those airports, giving rise to questions about competitiveness. In 2019:

• British Airways held around half the slots at London Heathrow (50%) and London City Airport (52%);
• EasyJet held 45% of the slots at both London Gatwick and Luton and over half the slots at Bristol (54%); and
• Ryanair held 73% of the slots at London Stansted.

Since the early 1990s, slot allocation in the UK has been governed by the EU Airport Slot Regulation (Regulation 95/93(EEC)) (‘the EU rules’). The EU rules came into force in 1993 and were later transposed into UK law by the Airports Slot Allocation Regulations 2006 (SI 2006/2665). The EU rules retain the principles of global industry guidelines called the Worldwide Airport Slot Guidelines (WASG).

The UK left the European Union on 31 January 2020 and is currently in a Transition Period until 31 December 2020, during which time EU law continues to apply. The EU rules have been transposed into UK law. This means those rules will still apply after 31 December until such a time as the UK Government decides to replace them with new national rules.

The main features of the global guidelines, and the EU rules, currently in place in the UK are:

• Historic precedence or grandfather rights. These enable airlines to retain their slots if they have used them 80% of the time in the last equivalent winter and summer season. The 80/20 or Use it or Lose it Rule is used to monitor compliance and determine whether airlines can retain their legacy slots. The European Commission has waived the rule for the summer and winter seasons in 2020 because of the coronavirus pandemic. The global guidelines say that historic slots may not be withdrawn from an airline to accommodate new entrants or any other category of aircraft operator. Confiscation of slots for any reason other than proven, intentional slot misuse is not permitted;
• An independent body, known as the airport coordinator, is responsible for allocating slots. The UK coordinator is Airport Coordination Limited (ACL). ACL has an arms-length relationship with the Department for Transport (DfT) and the regulator, the Civil Aviation Authority (CAA). Neither the DfT nor the CAA have any involvement in the slot allocation process; and
• Protections ensuring that 50% of new requests for slots are allocated to new entrants.

There has been increased interest in this somewhat technical area of policy in recent months due to the severe impacts on air travel of the coronavirus pandemic, government initiatives to deal with it and how airlines have reacted to the unique challenges it presents. Some have suggested that the combination of the UK’s exit from the European Union, the impacts of the pandemic and the drive to ‘net zero’ by 2050 present an opportunity to radically reform slot allocation in the UK to create a more efficient, competitive and environmentally sustainable aviation industry.

The Department for Transport’s draft aviation strategy, published in 2018, made the case for reforming the slot allocation process. The DfT argued the current allocation system “is not designed to stimulate a competitive market environment and has no means of taking into account broader objectives”. The DfT said it wanted to make administrative changes to how the current process works as well as potential reforms to improve competition, efficiency and domestic and international connectivity.

At the moment, the UK applies EU rules on slot allocation and will continue to do so after 31 December 2020 until such a time as the UK Government legislates to create a new UK-specific slot allocation system. The EU rules are based on the worldwide airport slot guidelines, produced by the International Air Transport Association (IATA), with some local variations. There is a question as to how far national governments can or would plausibly deviate from the global guidelines. The DfT has said that it is committed to “work constructively with the industry, IATA and the countries the UK has aviation links with, to consider how to develop the existing slot allocation system to deliver the best outcomes for the consumer”.

Information on other aviation-related matters can be found on the Aviation Briefings Page of the Parliament website.