Original publication: June 2016
Author: École Nationale de l’Aviation Civile, France: Nathalie Lenoir
Short link to this post: http://bit.ly/2IcGv2v
Major airports in the EU implement access restrictions regulated by means of a slot system. A slot can be understood as a take-off or landing right at an airport in a specified time period.
The number of slots per hour is determined on the basis of available infrastructure (runways, taxiways, terminals, etc.) and possible constraints, so that operating at a specified capacity will generate acceptable delays. Slots are allocated at each airport by a coordinator, on the basis of a principle of historic rights called the ‘grandfather rights’ rule (which includes a ‘use it or lose it’ rule), which essentially mean that airlines are allocated slots at an airport on the basis of their previous use of that airport.
At almost all US airports, and contrary to the EU, runway access is allocated on a ‘first come, first served’ basis. This enables full utilisation of capacity at all times, and easier access to airports for airlines, but nothing prevents delays – harmful to both airlines and consumers – from building up during peaks of demand.
While the EU system keeps delays at a reasonable (and predetermined) level, economists question the efficiency of the slot system, in terms of capacity utilisation and allocation of slots to airlines. Slots are unlikely to be allocated to those airlines that would put them to the best social use, not least given the fact that air transport evolves rapidly while slot allocation does not.
A specific concern is that this system may impact negatively on the size of aircraft at major EU airports, thus restricting supply and access to the air transport system.
The aim of the present study is to investigate the effects of the slot system and the ‘grandfather rights’ rule on aircraft size and size evolution at major EU airports.
Economists criticise the current EU slot allocation system, mostly because it has negative effects on the efficiency of slot usage, and on competition between airlines, by freezing slot allocation and by giving an advantage to incumbent airlines benefiting from ‘grandfather rights’. This allows them to engage in anticompetitive behaviour, that is, to hold on to slots that they are unable to use profitably rather than make them available to competitors.
It is believed that the current system of slot allocation leads to ‘slot hoarding’ and ‘babysitting’ of slots, which involves the operation of small aircraft and/or low load factors in order to keep slots rather that lose them. While individual instances can be pointed out or suspected, the extent of this behaviour in Europe is difficult to assess because there is no basis for comparison with non-slot-controlled major airports. In the USA, where comparisons could be made between a few slot-controlled airports and other airports, studies have shown a negative impact of the slot system on aircraft size.
Since airlines operate hub-and-spoke operations from the largest EU airports, they need various aircraft sizes to serve various markets. Consequently, the size of the aircraft operated cannot be used as an absolute indicator of the efficiency of slot use, which depends on the structure of competition and traffic.
However, in the context of traffic growth, it certainly appears socially desirable to allow more passengers to be able to benefit from existing airport capacities through the operation of larger aircraft.
It is for this reason that this note looks at the evolution of the payload (average number of passengers per flight) at main EU and US airports. It shows that payload has evolved at a steady rate in both regions, in line with the increase in traffic and congestion, whether airports are slot-controlled or not; any negative effects of the ‘grandfather rights’ rule on aircraft size are mitigated by traffic increases, resulting in the operation of larger aircraft.
Link to the full study: http://bit.ly/585-873
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