Northern Summer 2021 Slot use relief measures - The Worldwide Airport Slot Board recommendation explained - Regulations ...
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Northern Summer 2021 Slot use relief measures The Worldwide Airport Slot Board recommendation explained 1
Worldwide Airport Slot Board recommendation
Full series slot returns Use it or Lose it threshold: Force Majeure for
alleviated 50/50 operational relief
Full slot series returned between Provides flexible planning of Defined list agreed including
31 Jan - 8 Feb will be protected schedules to meet demand as it COVID-19 related impacts that
for NS22 recovers prevent sustainable schedules
planned being operated.
Provides airport and airline Forecasts do not support a return to
planning certainty the 80/20 in NS21. For example: Govt restrictions,
quarantine, flight/seat limitations
Incentivizes early returns of full Too high slot use ratio will prevent the etc.
series slots which can be restart of services, or encourage
reallocated to other airlines. unsustainable flying Precision & certainty globally for
consistent application of force
Those who operate ad hoc slots 50/50 provides realistic and majeure reasons for nonuse of
can return in S22 with priority, achievable slot use target, providing slots
subject to available capacity. flexibility, demand stimulation and the
avoidance of empty flights being
Can reapply for ad hoc slots flown.
should demand warrant
additional flying
2
The three elements of the WASB recommended relief package compliment each other.
The package must be adopted in full.
Industry objectives for slot use relief NS21
This is not a blanket waiver but a package of relief measures
Safeguard airport connectivity and hub Applicable to all L3 airports to ensure
structures to restore global networks inline a global solution that is consistent
and practical on both ends of the
with recovery of demand
route.
Gradually incentivize slot returns for
reallocation on a historic basis Decisions to be made before the
end of 2020 to allow the measures
Re-establish services in accordance with to have impact and enable
the removal of flight restrictions and plans/schedules to be built in
recovery of demand advance of slot return deadlines in
Jan/Feb 2021.
Safeguard access opportunities and
continue to enable a competitive industry
3
Why slot relief for NS21 and not a full waiver?
Slot relief is necessary due to continuing border closures, travel restrictions and health measures that
directly impact consumer confidence and ease of travel.
Current slot rules were never designed to cope with a prolonged industry collapse, therefore the WASB
has chartered an industry led package of relief measures that gradually return the industry to the normal
process as traffic recovers.
The recovery in 2021 will be patchy with domestic travel recovering sooner and in larger volume than
international, and still at a global level much depressed to previous levels.
A balanced solution is essential to address the needs of the different business models of airports and
airlines , their markets, and different exposure to the crisis. Providing certainty and flexibility while
promoting sustainable recovery of schedules.
The agreed components of this package need to be applied consistently, in entirety, at all Level 3 slot
coordinated airports globally.
The slot relief measures are the result of a consensus reached among airlines, airports
and coordinators.
4
Why we need a decision now…
Series returns between HBD
(31 Jan) and HBD +7 (8 Feb)
alleviated.
To plan for this airlines need
knowledge and certainty of the
complete package in mid-Jan
latest
8 Feb
What we are asking for…. Decision by end of the year 2020 Certainty of implementation of the entire slot use relief package detailed herein Flexibility to support recovery of demand by agreeing globally aligned slot rules for NS21
How does this benefit the US? Sustainably driven recovery of aviation. Vital international connections safeguarded for the future. Access provided to those able to operate now with ad hoc slots with priority to return in S22 subject to capacity. Consolidation of schedules is temporary - relief now offers breathing space for all business models to return to domestic and international network and point-to-point structures: preserving jobs and investment. Consumer demand better met through the restart phase with flexibility instilled into the process 7
Why does the industry need slot use relief in NS21? 8 18 December 2020
Global connectivity is at risk
Unique city pairs USD/RTK (in 2014 USD)
Unique city pairs are in
25.000 2,5 decline
20.000 Unique city pairs 2,0 Airlines are flying
skeleton schedules
15.000 1,5
Airlines are focused on
10.000 1,0 flying schedules that
Real cost of transport match demand
5.000 0,5
0 0,0 Connectivity and
1995 2000 2005 2010 2015 2020
competition need to be
2019 2020 Forecast restored. How?
Unique city pairs 22,104 14,765
COVID-19 has robbed the world of a century of progress
In shrinking distances and bringing people together through connectivity
Before COVID-19 air service
connected over 19,000 city pairs
Pre-COVID-19 the number of
unique city pairs has more than
doubled since 2000
While the cost of air transport for
passenger and cargo shippers has
more than halved, after adjusting
for inflation
COVID-19 has caused significant
loss in air connectivity, less than
7,000 city-pairs remaining
Losing 65% of city-pairs will have an
impact as we lose the convenience of
direct connections
Source: IATA Economics; data provided under license by FlightRadar 24. All rights reserved.Relief from slot use needs to accommodate all Level 3
airports with average traffic -65% in Summer 2020
YoY change in aircraft movements at the world’s Level 3 airports in Northern Summer season (Apr-Oct
2020 vs. Apr-Oct 2019)
0%
-7%
-20%
-40%
-60%
Ø -65%
-80%
-100% -100%
11 IATA-120%
Economics analysis based on data from FR24 18 December 2020International traffic will take two years longer to rebound than domestic Forecast recovery of passenger traffic worldwide (IATA/Tourism Economics)
Slot coordinated airports are reliant on
international traffic
Share of flights by slot coordination level, 2019
Only 28% of domestic Slot-coordinated
airports
28%
movements globally 61%
are flown at slot
coordinated airports Non-slot airports 72%
39%
Domestic International2021 traffic forecasts have been downgraded in
recent months despite vaccine optimism
and only provide a glimpse into the actual reality unfolding
In the last two months forecasts have been
downgraded due to the slump in recovery with • Eurocontrol (Oct 20 update) the 2021
projected longer term impacts scenario (2) most likely 51% of 2019 traffic
by end 2021
Air traffic and economic recovery has plateaued
• ACI Europe (Oct 20) 2021 downgraded: 50%
Traffic levels in the first half of NS21 will be of 2019 levels by mid 2021
significantly below the mid point forecasts
• IATA anticipate 47% recovery of 2019
Traffic is not expected to steadily rise to the mid-
point forecast, but instead step up to this number passenger traffic by mid 2021, but only 25%
from a much lower base. recovery of international global traffic.
Traffic post summer peak period usually plateaus
and actually steps down towards the end of NS21
in line with usual trends.Eurocontrol updated forecast On 4 November,
EUROCONTROL published
the latest STATFOR
Forecast for the period
2020-2024. “In the most
optimistic scenario, traffic
is forecast to return to
2019 levels by 2024.
However, in the second
scenario (most likely),
2024 traffic would only
be at 92% of the 2019
figure.”
Eurocontrol comprehensive assessment, 5 Nov.
2021: 51% 2019
ATMs by end 2021
15 18 December 2020IATA forecast and impact on L3 airports
The IATA 2021 forecast is based on the following assumptions
• Vaccine available starting H2 2021 with gradual roll-out first to developed then to emerging economies
• Sector length: Domestic recovers first, then short-haul, then long-haul
• Purpose of travel: VFR (visiting friends and relatives) recovers first, then leisure, then business
• Yields: Demand stimulation by lowering yields
The IATA forecast results in the following projections
• For the first half of 2021, global pax 47% of first half of 2019 levels
• Level 3 airports are highly exposed to international recovery: our analysis and forecast assumes only 25% recovery
in international traffic by end June 2021 – half the S21 season.
• Only 27% of Domestic flights depart from L3 airports, whereas 73% depart from non-L3. Or put it another way, L3
airports serve 60% of global International flights, and rely on 80% of international ASKs as their full ASK compliment.
• There is no direct correlation between an end of 2021 forecast for global recovery and the basis for the slot threshold
applicable from April 2021 at L3 airports.
16 18 December 2020Risks to near-term passenger forecast remain tilted to the downside – IATA outlook 17 18 December 2020
Will a vaccine support recovery by mid-summer? COVID-19 vaccines are not expected have a significant impact on consumer demand, or the ability to fly in Summer 2021. Challenges to relying on the vaccine to aid industry recovery: Production and distribution challenges initially limit availability initially, particularly in emerging markets, except for China Governments are likely to need sufficient proportions of populations to be vaccinated for travel restrictions to be removed. Conditions may be placed on entry related to vaccination further hampering immediate recovery and slowing demand. A stronger recovery in air passenger demand is likely after 2021. In the meantime, a shift towards short-haul travel remains There are signs of pent-up demand as restrictions are lifted but confidence and the easing/removal of mandatory health restrictions is critical 18 18 December 2020
Explanation of the WASB relief package 19 18 December 2020
What is the 80-20 rule?
Definition of an airport slot
An airport slot is a permission to use the full The 80-20 rule
range of airport infrastructure necessary to
arrive or depart at a congested (Level 3) airport Airlines can retain slots if
on a specific date and time. they use each series >80%
Calculated by each individual
For example, for a daily service an airline needs: slot series
Arrival slot + Departure slot x 7 days of week
Under normal circumstances,
~ each slot is a separate series typically see 95% use of
~ each day is a separate series airport capacity
~ summer season 31-32 weeksWhy a lower usage threshold?
Force majeure does not replace much needed flexibility in planning
• Targeted force majeure is an operational alleviation for unforeseeable impacts to the planned
schedule such as borders not reopening when planned, quarantine remaining in place, govt
advisories and restrictions implemented at short notice.
• The usage threshold is the basis for planning the seasons schedules, requires careful discipline
to manage series versus crewing, fleet and consumer demands > airport capacity use and
avoid fragmentation in the recovery phase.
• Airlines do not plan a schedule taking into account force majeure – this is alleviation within the
operating phase.
• The usage threshold is a global recommendation by the WASB, to promote a level playing field
by suggesting a common threshold that reflects the continued inability to operate full
schedules sustainably – all regions continue to see international services operating at less than
20% year on year.
• The lower usage threshold supports flexible, agile planning to respond to demand, that is yet
unknown.
21 18 December 2020Setting a slot use threshold that supports rather than
hinders recovery Probability of Use/Lose Failure
15%
In normal times, the 80/20 rule results in a certain
probability of failure when average slot use is high
10%
(~95%). The chance of failure is higher for short 5%
series lengths (as fewer cancellations are permitted). 0%
5 7 9 11 13 15 17 19 21 23 25 27 29
The charts opposite show how much the 80% Series Length (weeks)
usage requirement would need to be reduced to
balance a given level of reduced overall slot use. 80/20 (95% ave util) 60/40 (84% ave util)
40/60 (68% ave util) 20/80 (49% ave util)
For example, if overall slot use in Summer 2021 was
predicted to be close to 95%, the 80% usage rule
would be applicable. Use/Lose Rule versus Slot Use
Therefore using current forecasts for 2021 and 100%
likely recovery scenarios the threshold has been 90% Constant probability of
Average slot use
set at a maximum level 50% to achieve upwards of
use/lose failure
80%
70% use in markets where demand recovers 70%
quickly. 60%
It should be noted this places risk on the airlines 50%
to plan at least 16 week+ operations. 40%
The targeted FM clauses are the in-season relief 0% 20% 40% 60%
Use/Lose Threshold
80% 100%
should markets not open, govt measures not be
removed and the high usage cannot be achieved in Source: MM modelling; based on random cancellations following a binomial distribution
targeted markets.
22The usage threshold for S21 needs to support recovery globally and remain consistent YoY change in aircraft movements at the world’s Level 3 airports in Northern Summer season (Apr-Oct 2020 vs. Apr-Oct 2019) 23 IATA Economics analysis based on data from FR24 18 December 2020
Global recovery still very uncertain Epidemiological situation now vastly different across regions Europe Asia-Pacific Middle East 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- Feb Mar Apr May Jun Jul Aug Sep Oct Nov Feb Mar Apr May Jun Jul Aug Sep Oct Nov Feb Mar Apr May Jun Jul Aug Sep Oct Nov North America Latin America Africa 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- 1- Feb Mar Apr May Jun Jul Aug Sep Oct Nov Feb Mar Apr May Jun Jul Aug Sep Oct Nov Feb Mar Apr May Jun Jul Aug Sep Oct Nov 24 IATA Economics using data from ECDC 18 December 2020
Why reduce the 80:20 slot use ratio to 50:50?
• 80:20 would in effect require airlines to plan to
Typical operational and planning requirements of different
operate 90%+ of their schedule which is not
slot use ratios
realistic given forecasts for 2021.
30:70 means ≥ 10wks
operated
• Too high ratio restricts airlines from risking the
restart of new services: hindering rather than
50:50 means ≥ 16wks operated supporting recovery
80:20 means ≥ 25 wks operated • Globally appropriate given different pace of
M Apr May Jun Jul Aug Sep Oct recovery and does not prevent carriers
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 exceeding the usage – while protecting network
NS21 is a 31 Week Season structures
Pushing capacity to the Q3 period • Focusing on flexibility to support rebuilding
schedules to match demand, not slot thresholds
Demand in Q2 anticipated to
be difficult, with need for
Airlines planning a robust Q3 ~
vaccine availability,
• 50:50 balances the restart of existing services
gradual reestablishment of restrictions removed, demand while facilitating new services.
services. recovery & consumer
confidence rebuildingRelief through a reduced threshold is not enough… Recovery is anticipated to be prolonged with mid-2021 only seeing ~25% international traffic Requiring all series to be operated to a threshold in NS21 is not sustainable Routes with more than one frequency can be preserved without inconsistent schedule timings being planned if further alleviation provided.
Early series returns to stabilize planning and provide
opportunity for others to use slots
Airline and airport planning needs > passenger benefits
Reallocating series for new use and
Multiple frequency day/week operations require multiple series
access this NS21
of slots each day. Without alleviation for full series returns and
only a lower threshold, airlines have to operate each series to Early returns in Feb ensure early
the threshold. reallocation, not on a rolling basis.
For example, twice x daily HKG - SYD, four x daily LHR – JFK, three x Whole series can be reallocated which
daily MAD-GRU : all hold multi series for these timings that link hubs gives maximum reuse potential – full
through carefully timed connections. Reducing daily operations to season planning
3x week while restoring demand is highly likely. Example: LHR – Loganair, Eastern
~ Gradual recovery of demand / need to preserve hub structure Airways, Spicejet all using ad hoc slots.
~ Gradual rebuild of multi frequency services as demand recovers – New airline entrants want consistent
sustainable schedules slot times provided by full series
~ Airline likely to plan one x daily NS21 and retain route allocations
~ Consistent schedules all season from operating one of the
schedule times, not operating across multi freq series New entrants awaiting NS22 to gain
~ Consumers have reliable, stable schedules that connect in to access otherwise
temp redesigned hub structures.
~ Airports can plan efficient use of infrastructure from consistent
schedulesRebuilding the network will be like starting routes from new Demand needs to be stimulated, schedules built to match passenger profiles post COVID. Break even loads will be far higher, so yield will be a key metric. While demand remains invisible until close to operation flexibility is key. Government restrictions, vaccine availability, travel requirements all influence consumer demand. Return to markets will be a gradual process i.e. 3x week, building back to daily services, 3x day building back to 8 daily services. Without series returns alleviated this is not possible. With too high use-it or lose-it threshold this is not possible. 28 18 December 2020
Returning fleet and crew to
service takes time and
planning needs to start now
Airlines need to be able to plan the structure of the
schedule now, taking into account the slot rules and
usage threshold.
This influences their crewing needs, fleet mix, return
to service from long term storage - all take time.
• Pilot training, simulator checks and rehiring is a
lengthy process taking months to complete.
• Maintenance facilities have capacity limits too,
returning aircraft to service takes weeks-months.
The 50/50 threshold essentially means the focus of
the schedule will be placed on peak summer months:
June to September. Anything higher would require
schedules to be operable from Apr/May time when
fleet and crew may not be ready.
29Force Majeure for operational cancellations
Coordinators should accept as valid justification for the non-utilization of series of slots, any government
restrictions that prevent or severely restrict travel to specific airports, destinations (including intermediate
points) or countries for which the slot was held, such as examples listed hereafter.
1. Government travel restrictions based on nationality, closed borders, government advisories
related to COVID-19 that warn against all but essential travel, or complete bans on flights from/to
certain countries or geographic areas.
2. Severe government restrictions related to COVID-19 on the maximum number of arriving or
departing passengers on a specific flight or through a specific airport.
3. Government restrictions on movement or quarantine/isolation measures within the country or
region where the airport or destination (including intermediate points) is.
4. Government-imposed closure of businesses essential to support aviation activities (e.g. closure of
hotels).
5. Unforeseeable restrictions on airline crew, including sudden bans on entry or crew stranded in
unexpected locations due to quarantine measures.
30Conditions for relief unique to NS21
1. Alleviation measures shall not apply to a series of slots of an airline that
permanently ceases operations at the airport.
2. Exchanges and transfers currently allowed will continue where they are not
prohibited by the laws of the relevant country WASG 8.11.5.
3. New slot trade arrangements are not eligible for full season alleviation (this
does not include continuation or unwinding of existing slot trade
arrangements), but are eligible for other slot relief measures. This does not
include continuation or unwinding of existing slot trade arrangements.For more information: WASB Recommendation www.iata.org/en/policy/slots/covid-19-slots/ Lara Maughan Worldwide Airport Slots maughanl@iata.org 32 18 December 2020
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