Europe’s leading airlines demand extended slot waiver

Europe’s biggest airlines have urged the European Commission to extend a waiver of airport slot rules till next spring or risk carriers operating near empty flights, exacerbating the industry’s cash crisis.

Air France-KLM chief executive Ben Smith led the calls for an extended waiver this week, insisting there are “too many slots” for the level of demand. He warned: “If we don’t have a waiver, airlines will have to operate these slots, increasing their losses.”

But Europe’s fastest growing carrier Wizz Air rejected the call and demanded the EC ignore the plea, denouncing it as “irrational and anti-competitive”.

Wizz Air chief executive Jozsef Varadi said extending the waiver to March 2021 would “protect incumbent airlines with weak business models”.

The EC imposes an 80/20 use it or lose it rule on slots at capacity constrained airports, meaning an airline loses take-off and landing slots it holds unless they are used 80% of the time.

The Commission waived the rule amid the growing travel lockdown in March until the end of the aviation summer season on October 25

EU transport commissioner Adina Valean told an EU aviation summit on Thursday that the EC does plan to “extend the waiver for part of the 2020-21 winter season” but with new conditions. However, no details have been announced.

Smith said: “Demand is gradually recovering in some regions, but an enormous number of markets that are opening have retained restrictions. It is very difficult to operate and plan. Yet it is our responsibility to use slots in order to keep them.”

Speaking as chair of the Airlines for Europe (A4E) group which includes Lufthansa, Ryanair, easyJet and British Airways and Iberia owner IAG, Smith said: “The EC should extend the slots waiver for the full winter season.

“Many of the airports we operate from are slot controlled under the 80/20 rule. Airlines often order aircraft and negotiate contracts with staff based on slots. So it’s extremely important.

“This business is focused around slots. You negotiate with crew, with hotels, maintenance – there is a whole infrastructure behind slots.”

Smith added: “The prospects for this winter are very uncertain. It’s very difficult to plan. Bookings are coming in much closer to departure and that is having an impact, [and] the number of slots is too many based on demand.

“If we don’t have a waiver, airlines will have to operate these slots, exacerbate losses and it will have a negative impact on the environment. So we are looking for a waiver.”

However, Váradi said: “The plan to prolong the waiver protects incumbent airlines with weak business models while airlines like Wizz Air are ready to take up new market opportunities.”

Wizz accused the carriers seeking a waiver extension of having “a history of poor cost management”.

It insisted: “Allowing airlines to block slots without operating them is not in the interest of airlines like Wizz Air, airports or the economic recovery of the EU.

“Wizz Air is willing and able to expand. Prolonging the 80-20 rule during the winter season would mean Wizz is prevented from doing so.”

Wizz cited London Gatwick as an example, saying: “Some of Gatwick airport’s existing airlines have stated that they believe it could take years until levels of demand get back to normal.”

The airline said it “has not received any state aid” but has already recovered 77% of its capacity this year on 2019.

However, Wizz has drawn a £300 million loan through the UK government’s Covid Corporate Financing Facility (CCFF). It has also used the state-supported furlough schemes around Europe, including in the UK.

Airports association ACI Europe called for any extension of the current slot waiver to include “strict and enforceable conditions” and “ensure unused slots can be reallocated to other airlines”.

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