The interconnectedness of things

Why a proposed air traffic management shake-up means airlines' airport slots may have less value

The Single European Sky Committee, a European Commission-convened, Eurocontrol-led group, is trying to find better ways to improve the flow of air transport around Europe.

The group is working on the European Traffic Flow Management initiative (ETFM) which is mandated in the Single European Sky legislative package.

One of the key issues that the group is considering is the misallocation of resources and the inefficiencies that arise from aircraft not arriving at the time set out in their filed flight plans.

The committee notes that when that happens, particularly at an airport where slots are constrained, a slot simply goes to waste. Secondly, if an aircraft files a flight plan to a slot-constrained airport without actually having a slot, hoping that it can use one of these otherwise 'going to waste' slots, it is then clogging up the system.

The ETFM proposal therefore suggests a couple of solutions. First, if a flight plan is filed by an operator that does not have an appropriate slot, then the flight plan will be rejected. Secondly, a current draft compromise proposal, that if an airline repeatedly does not use the slot that it has allocated, at the time it is due to use it, then it is lost forever, even if the slot is not used because of flight rerouting for weather or other operational reasons.

The plan, which is designed to make air traffic management better and less wasteful, actually impacts the balance sheets of airlines who are struggling to make a profit in challenging economic times. Airports, which had lobbied to be more involved in determining how slots are allocated, are standing back. Air Navigation Service Providers (ANSPs), who separate aircraft on the ground or in flight in a dedicated block of airspace, are starting to realise that they have more power at their disposal.

The debate comes down to which of the players in air transport actually owns slots, and the latest ETFM proposal may affect that debate. After all, how can a slot have any value if it is at risk of being wiped out in an instant by an air traffic controller? In that case, such slots cannot be considered to be assets, and therefore they cannot be on the balance sheet, or as part of the strategy of airlines looking to acquire other airlines for their slot cache, such as Lufthansa's purchase of a controlling stake in BMI which made it the second-biggest operator out of Heathrow.

The airports feel that they too are entitled to some recompense for the work that they do in creating the infrastructure that airlines then use and occasionally buy and sell with huge windfall gains. Meanwhile, the ANSPs feel that they should have greater involvement in the way slots are allocated and used, and have been lobbying the European Commission to get more involved.

The ETFM proposal would take away much of the windfall gain element of the current slot regime, and devaluing slots actually levels the playing field.

The devaluation of slots is an example of the interconnectedness of the air transport industry. As a result of these moves to increase efficiency and operational integrity, ANSPs feel that their role is valued, airports have the involvement that they wanted, but at the same time airlines have been brought down a notch or two.

Ultimately what will be required to resolve the lobbying that is characteristic of the industry is a mature debate about the way in which the industry as a whole is regulated, and which necessarily recognises all of the interested parties as equals.


Extracts taken from the March 2009 edition of the Aviation Intelligence Reporter, a newsletter published by DAV's Enigma sponsoring partner, Aviation Advocacy