ON THE SOAPBOX: Slots - time for change?

On proposals for change to the UK airport slot regulations

Neil Garwood is Chief Executive at ACL, the UK’s slot coordinator, and ACL International, coordinator for around 50 airports across ten countries. He joined in 2021 following leadership roles at AGS Airports (Aberdeen, Glasgow and Southampton) and, before that, in the rail freight sector.   

On 4 December 2023, the UK’s Department for Transport launched its long-awaited consultation on airport slot reform.

Presenting ideas for change – some minor, some radical – the exercise is open and seeking submission of views until early-March, after which the timeline for any resulting change is unknown but quite possibly dependent on political machinations in this election year.

The governing regulation dates from 1993, a time when there were 100 million UK air passengers annually. In 2019, there were just under 300 million. What hasn’t risen three-fold in that time is the number of runways and terminals, so a system of increasing constraints alongside vastly improved efficiency, and in some parts notable capacity crunches, now faces regulatory review. What can we expect from this? What are the principles of change? Let’s take a look.

An airport slot is just a permission to operate at a given day and time. Use it at least 80% of the time and the airline can keep that day/time permission forever. That we have this whole administrative arrangement at all is because at many airports demand exceeds supply, particularly at certain times of day, so an allocative system becomes advantageous – independent, through slot coordinators like ACL, to ensure fairness. It’s not about creating new capacity, more about making best use of what’s already there.

The Government believes that improvements can be made, to efficiency, transparency and dynamism; and in the allocation of new slots. Competing interests are at play as airports seek to maximise volume, airlines want utmost flexibility from the slots they hold, and passengers want value and connectivity. For the slot system as we know it to have supported the growth in UK aviation over the last three decades, whilst offsetting the urgency of new airport capacity, shows its historic effectiveness. Whether the system is viewed as 30-years-old and ripe for change, or 30-years-young and just getting started, setting out some principles that underpin common requirements as we see them seems a good place to start the debate.

The first principle states that churn of slots is desirable to ensure continued efficiency overall. It isn’t necessary immediately to determine exactly how that churn occurs, or what amount is desirable, but over time a healthy flow of slots to the pool for re-allocation by ACL is beneficial – and without which the market can stagnate.

The second principle is that the independence of the slot coordinator should be protected, to avoid partisan outcomes and support allocative efficiency. Any erosion of that independence, for example through powers to direct the coordinator to act in a particular way, risks skewing the balance and undermining neutrality. Interventionism, even the well-intentioned kind, can be a slippery slope.

Third, slot mobility should not undermine principles one and two. The slots framework permits trading between airlines, in effect altering the slot allocation decision reached by ACL. This is arguably incongruent, in its current form, with the transparent, independent and best-use outcomes that the whole system is designed to achieve.

Principle four states that any wastage of slots should be avoided. The 80:20 usage rule sets the baseline for this, however there are a range of additional justifications for non-use which can be sought. The Government presents the option for a higher threshold – 90:10 – and whether this is introduced or not, reducing any wastage must be a key priority in the management of scarce resources such as airport slots.

And finally, principle five. This states that alignment with worldwide guidelines is desirable where this supports the objectives the slot regulation is trying to achieve. Aviation is a global business, and every slot at a UK airport has a corresponding slot somewhere else. If we’re going to change things here there is a need to be mindful of what’s going on elsewhere, and how such changes may create repercussions and reciprocities.

Ultimately the Government may need to decide which of its aims is most important. Do we need a more efficient regime, providing greater value from the allocation of slots? Or is dynamism more important, giving better opportunities for competition and emerging airlines? Perhaps it’s neither of these, and our focus should be on designing the future system for allocating slots created by new airport capacity whenever it arrives. The realities of climate change or a new political administration may alter everything, or nothing; and the balance of politics, practicalities and competing interests is always evident in slot reform discussions. For now, the benefit is in consultation and debate, principled or otherwise, as we seek collectively to safeguard the UK’s position as a leading global aviation hub with an unrivalled slot management system.

www.acl-uk.org

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READERS' COMMENT

All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 200 words maximum

David Starkie, United Kingdom

I would suggest that slot trading, accompanied by a payment, helps to increase slot turnover (churn), particularly of grandfathered slots not 'allocated' as such by the co-ordinator, and is not necessarily incongruent with best-use outcomes.

Ralph Simon, London

The solution is simple. WheelTug.