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Making The Case

All-cargo airlines have the opportunity to press their case for more leeway when it comes to slot allocations but making changes to ‘80:20’ guidelines will be difficult, according to IATA.

The 80/20 Rule

      IATA’s ‘use it or lose’ 80:20 formulation is part of the Worldwide Slot Guidelines (WSG) used to allocate capacity at leading airports globally. These state that if an airline uses at least 80 percent of its allocated slots it assumes historic rights to the slots for the next season.
      Should it fall under 80 percent, it automatically loses them and they are distributed to other airlines.

How About 70/30?

      As previously reported, a global shortage of slot capacity has hit the headlines recently, primarily due to the loss of slots experienced by freighter operators at AMS, which has seen multiple services diverted to secondary European airports.
      This prompted the European Shippers’ Council (EAC) to call for a 70/30 provision in WSG to take account of the operational difficulties facing many freighter operators.

Maughan & Change: Long & Winding Road

      But according to Lara Maughan, Head of Worldwide Airport Slots IATA, making changes to WSG is a long and difficult process. WSG, she said, was the foundation upon which the global slot allocation process was built and it was designed to benefit airlines, airports, and passengers by optimizing the use of scarce airport capacity.
      In the EU, for example, WSG is enshrined in Council Regulation (EEC) No. 95/93 of January 18, 1993, which governs common rules for the allocation of slots at Community airports.
      Elsewhere, similar legislation is in place to enforce WSG or, where there is no regulation in place, slots are allocated under WSG alone.

Insuring Access View S/H

      Maughan insisted the guidelines ensured slots at capacity-constrained airports around the world were allocated to airlines using consistent policies, principles, and processes and were reviewed on a regular basis to keep up with regulatory changes.
      “It’s the only global standard today in the slot allocation process,” she said.

No 10 Percent Solution

      While reluctant to comment on whether leisure airlines will squeeze cargo operators out of major hubs such as AMS in the future, as shippers allege, she said IATA’s analysis of a move to a 70:30 split on historic slot allocation had shown this would not yield the extra leeway cargo airlines sought.
      “I think a 10 percent reduction in utilization still isn’t going to get to the heart of the challenges facing airports and cargo operators,” said Maughan. “I think the real issue here is the need for flexibility when looking at this area of the market. And I think that can be achieved in a number of ways, not necessarily by reducing the utilization rate, but by being more flexible in the approach, and understanding that market.
      “[Cargo airlines] do have some unique considerations that need to be taken into account when looking at how they operate their slot. Many of them are actually operating their slot but sometimes not always as planned. It’s not as simple as going down the 70-30 route. It’s true that a lot of the airlines—when I talk about the airlines I mean passenger and cargo—are absolutely feeling a capacity crunch at the moment at airports, and really the heart of the problem is there’s not a lot of spare capacity at the airports anymore.

One For All

      “It’s very difficult to meet demand at the moment due to a lack of capacity and I think as an industry we focus our attention on creating more capacity for all.”
      She also said that it was possible that the 80/20 stipulation of WSG could be reformed in the future, given that the rules are under “constant review.”
      She added: “We are actually undertaking a strategic review now with the airport coordinators and the airlines to look at what needs to be improved for the future,” she added.

Other Voices

      However, while FlyingTypers learned that at least two integrators including DHL are participating in the current review, neither Maughan or IATA’s communications department were able to provide any information about how other cargo airlines or freight supply stakeholders could participate, or when the current review would be concluded.
      Shippers, faced with disruptions to supply chains at many leading hubs, have queried if specialist European airports in the future could favor cargo operators to ensure capacity was made available, but Maughan said this would be difficult under current European regulations except in relation to localized issues where mediation might be required.
      “So, as an example, a local rule actually usually covers disruptive events and how operations are managed so an airport can get back to full capacity as quickly as possible,” she said. “As a whole, local guidelines can only be implemented in a way that really does not affect the general operation of the slot process. So when you get into the aspect of priority for specific carriers, the general position of the industry as you know should be neutral and fair. One airport may want to entice a certain type of traffic but then another airport may take a different view and try to find something different and it’s not really a fair and neutral global application.”

Brexit Speculation Weighs In

      Asked how Britain’s decision to leave the EU might affect its implementation of WSG, Maughan replied:
      “Obviously, everybody is speculating as to what actually could be the outcome, but our understanding is basically the EU regulation is very likely to form the majority of the next UK slot law. I can’t see much reason to divert wildly from it because it is a global set of standards. Maybe there will be some tweaks that they will make if they leave the European Single Market, but other than that I can’t see them going very much against the grain there.”
SkyKing
For Part 1. Click here