Wednesday, July 23, 2008

Airlines running the slots

By Donald Sensing

The TimesOnline reports on the big environmental controversy across the pond: airlines flying mostly-empty planes on certain routes in/out of Heathrow in order to keep proprietorship of those routes. These routes are nicknamed "slots," and airlines are being accused of environmentalists of flying the slots even with few passengers aboard the planes.

Britain’s third-largest airline, bmi, will fly near-empty aircraft from this autumn to preserve multimillion-pound take-off and landing slots, The Times has learnt.

The rise in fuel prices and an expected slump in passenger numbers after the summer mean that many airlines will have to cancel flights, but bmi does not want to lose its coveted slots at Heathrow, which are valued at £770 million.

Airline executives are bracing themselves for their toughest winter yet as the credit crunch forces passengers to cut back on air travel and fuel prices continue to drive up costs.

The decision by bmi to fly “ghost flights” - short-haul trips with only a handful of passengers - is one of a series of plans being drawn up by airlines. Senior industry figures admit that other carriers will cancel domestic flights at short notice and gave warning of chaos ahead for business travellers. Rather than withdrawing from uneconomic routes, the tactic of cancelling individual flights is another way of retaining landing slots.


But as the paper explains elsewhere,

Under the "use-it-or-lose it" rules that govern the allocation of slots at Heathrow, airlines must use their slots 80 per cent of the time or forfeit them - at £25 to 30 million apiece, according to financial services firm Deloitte. As the credit crunch bites and passenger demand drops, using these slots efficiently may often be impossible.

Facing such maths, what is an airline to do? As David Robertson, Times travel commentator, says today: "It is better for a carrier such as Bmi to lose £20,000 per flight than to give up a £30 million slot."


Well, yeah. But until the system is reformed to enable airlines to keep slots even if they cancel a route (temporarily), then slot flying will continue to be practiced. Does anyone know whether the US air system has a similar issue?

1 comment:

karrde said...

I don't know if there is a "slots" system at U.S. Airports.

I do know that there are sometimes logistically-necessary empty flights.

That is, you have an airplane run an empty route (e.g., from Hawaii to L.A. on a Friday morning) so that it can run a full route at profit (e.g., from L.A. to Hawaii Friday afternoon).

My examples are simplistic, of course...but if the airplane is needed at the far end of the flight sometime in the next 24 hours, it makes sense for the airlines to fly it there, even if there aren't enough purchased tickets to make the flight profitable for the airline.