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ACI World examines the inner workings of the global airport slot system and how collaboration could be the key to meeting future capacity needs
Sophie Riopel-Gewelt 2024-10-19 14:00:20
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Sophie Riopel-Gewelt, director of slots and infrastructure management at ACI World, examines the inner workings of the global airport slot system and how collaboration could be the key to meeting future capacity needs
The global slot allocation system is built on a framework that enjoys widespread support within the airport community. However, there’s an exciting opportunity for us to work together to better align the system with today’s market dynamics, ensuring it meets the evolving needs of consumers.
Airport slots might not always capture the spotlight but there’s a crucial conversation happening behind the scenes. This discussion goes beyond logistics, focusing on how we can collectively update policies to reflect the changing needs and expectations of customers and societies while also promoting efficiency, fairness and growth.
As interest in airport slot policies grows among regulators, it’s important to collaborate effectively and shape the future of our industry.
Coordinating capacity
Airport slots are scheduled times for airlines to land and depart from congested airports. They are primarily used to facilitate planning and capacity management.
Globally, airports are categorized into Level 1, Level 2 or Level 3 based on congestion levels. Level 1 airports offer unrestricted access, Level 2 airports have potential for congestion at peak times, and Level 3 – or slot-coordinated – airports face the most congestion. In these Level 3 airports, demand often exceeds capacity.
Airline requests are prioritized based on specific criteria, with ‘grandfather rights’, or historic rights, being the most significant. To maintain these rights, airlines must comply with slot usage requirements, which currently mandate the use of at least 80% of the allocated slots.
For the northern summer 2024 season, 219 airports were declared Level 3 and 167 Level 2. Just over half the world’s air routes operate at these airports, and the number of capacity-constrained airports continues to grow. Moreover, the impact of slot coordination extends to non-congested airports, as congested airports play a crucial role in airline network and schedule planning.
Strategic significance
As airlines’ two primary operating models – network carriers and point-to-point carriers – both aim to maximize key airports, they can create peak periods at these airports. In each case, flight timings are crucial and directly affect airlines’ operational efficiency, fleet utilization and financial performance. Consequently, it is clear why airlines have a keen and long-standing interest in the management of scarce airport capacity around the world.
Similarly, effective use of available capacity directly affects an airport’s operational efficiency, financial performance and ability to maintain a sustainable relationship with neighboring communities. Given the fixed nature of their infrastructure, airports have a unique understanding of their communities and play a key role in ensuring air services align with local needs and expectations.
"Congested airports play a crucial role in airline network and schedule planning"
Forecasted growth
ACI World projects that global passenger traffic is expected to reach 9.5 billion by the end of 2024, surpassing 2019 levels for the first time since the Covid-19 pandemic. To meet the anticipated increase in air travel, ACI estimates that approximately US$2.4tn in airport capital investments will be required over the period from 2021 to 2040. Further details can be found in the ACI Global Outlook of Airport Capital Expenditure report (see right).
Although direct investment in infrastructure is the main solution that addresses the fundamental issue of demand outstripping supply at congested airports, airport capacity expansion often takes considerable time due to various constraints, including physical limitations and regulatory hurdles. As such, it is both prudent and realistic to focus on optimizing the use of existing infrastructure through effective capacity allocation processes before or in parallel with expansion projects.
The Worldwide Airport Slot Guidelines
Although not legally binding, the Worldwide Airport Slot Guidelines (WASG) provide an essential framework that is adopted globally. Indeed, in many jurisdictions the WASG have been incorporated into local regulations and laws.
The basic processes in the WASG were defined by airlines in the 1970s, when most airports were government owned and considered public infrastructure, and the airline market was dominated by flag carriers. The liberalization of air transportation drastically changed the competitive landscape.
Recognizing these changes, it is important to acknowledge that the principles for allocating scarce airport resources – initially developed by publicly owned airlines under IATA’s guidance, with national government participation safeguarding the public interest – are now often shaped by private entities. This shift calls for airlines and airports to make a collaborative effort to evolve the guidelines.
The WASG, intended as a best-practice document, expressly recognizes the right of national regulators to adjust policies to suit local needs. Several airports and regulators have already taken legitimate steps to adapt their provisions to better reflect local market conditions and specific circumstances.
IN 2042, DOMESTIC PASSENGER TRAFFIC IS EXPECTED TO REACH 10.6 BILLION
Airport involvement
The basic principles of slot coordination have been in place for more than 40 years, but airport and airline collaboration on airport slots is a relatively recent development. In 2019, a new governance structure was established to increase input from the broader industry, leading to the formation of the Worldwide Airport Slot Board (WASB). The WASB gave equal roles to both airports and airlines, and the Worldwide Slot Guidelines (WSG) were renamed the Worldwide Airport Slot Guidelines.
In June 2020, ACI, IATA and slot coordinators represented by the Worldwide Airport Coordinators Group (WWACG) jointly published the first edition of the WASG. While retaining all key provisions from the WSG, this edition introduced several updates and enhancements to the slot process. It also included a revised objective, which put the interests of the traveling public at the center of the process. Although the first term of the WASB from 2020 to 2022 was overshadowed by the pandemic, the board succeeded in adapting slot allocation practices to address the impacts of the Covid-19 crisis. Since 2022, the WASB has reverted to its original agenda of improving the WASG in line with the new objective. Although some progress has been made, continued collaboration is key to modernizing the guidelines and reflecting the current market.
Evolving for a collaborative future
Airports and airlines are committed to serving the traveling public. However, although they share this common goal, their approaches often differ due to distinct priorities. Airlines optimize their fleets and networks for profitability, while airports seek to enhance the use of their infrastructure to improve connectivity, operational efficiency and community benefits, contributing to economic competitiveness. These differing objectives drive debates over slot policy, highlighting the challenge of balancing priorities between the two stakeholders.
True progress will come from a collaborative approach that balances these objectives, ensuring both operational efficiency and broader public benefits. Although maintaining stability and preserving systems that have worked in the past are important, these policies must grow to meet current and future needs. Embracing innovation in slot policy can address contemporary challenges and also create new opportunities for fair competition.
A forward-looking approach should create the right conditions for both airlines and airports to maximize efficiency and profitability, enhancing service quality and expanding options for travelers. Clearly, adapting slot allocation processes is not a zero-sum game and may face resistance from those who stand to gain from the status quo, but it will ultimately benefit the industry as a whole.
So far, technology has yet to fully affect slot allocation, but advances such as generative AI hold promise for improving transparency and efficiency for airlines and airports. These innovations could support better decision-making and can create a more competitive and responsive aviation sector. The Covid-19 pandemic highlighted areas where the WASG could evolve, particularly regarding how the system may enable airlines to manage their slot portfolios and market positions. To address these challenges and capitalize on technological opportunities, it is essential for all stakeholders to work together. By leveraging collaborative and innovative solutions, we can enhance the industry’s resilience and better serve the traveling public.
The global airport community is a constructive force in slot policy and will continue to work with its aviation partners as it advocates for the traveling public and communities worldwide.
To Read the ACI Global Outlook of Airport Capital Expenditure report, scan the QR code or visit https://store.aci.aero/product/global-outlook-of-airport-capital-expenditure
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