Who owns airport slots? The American people or the airlines?

by Charlie Leocha on August 30, 2010

The allocation of airline take-off and landing slots is something like the distribution of the electromagnetic spectrum. However, while the electromagnetic spectrum division is a universal issue, the distribution of landing slots only affects a handful of airports with operation caps in place. In both cases limited resources are divided between competing interests.

Airlines look upon landing and take-off slots as personal property. However, the airlines have not paid for these slots. They were distributed by the FAA back when the airspace was wide-open and air-traffic problems were not even envisioned.

Currently, LaGuardia Airport, JFK and Newark in the New York region have strict slot limitations as well as Washington-Reagan. Other local airports are faced with variations on slot limitations such as Long Beach, California, for example, which sets its own standards. There are currently 155 airports in the world where the demand for runway and gate access exceeds the capacity of the airport. At these airports slots are allocated to airlines through a slot coordination process.

Both the U.S. and European Union (E.U.) are struggling with the question about who owns slots. The question is on the back burner right now in the U.S. but is being actively debated in the E.U. Recent slot swap decisions by Delta and USAir together with recent slot changes at Washington-Reagan and Newark are reviving the debate in airline and airport circles here in the U.S.

Writing in IATA’s Airlines International August-September 2010 issue, Charles Tyler outlines the big question that needs to be addressed.

A slot is nothing more than the right to operate a service at a particular time, and there is little certainty about who is the legal owner. Airports own the runways and the terminals. Governments regard a nation’s airspace as a sovereign right.

Airlines jump through regulatory hoops to keep their slots. Using a “grandfathered” principal, they work to keep control of their slots at airports constrained by high traffic. They spread flights across different “slots” to make it appear that they are using all of their slots (the 80/20 rule). They lease slots to other airlines to maintain control of these take-off and landing rights. They find other airlines to babysit their slots.

The Consumer Travel Alliance, a non-profit based in the Washington, DC, area feels that decisions about what airlines get what slots should be changed from the current grandfathered slot system to slot auctions or government allocation of slots at airports where take-offs and landings must be limited.

Recently, airlines have been maneuvering around the slot rules and their sense of entitlement to slots that have been assigned to them in the past.
— Delta and USAirways have tired to swap slots like baseball cards, until the DOT slapped them with limited sanctions.
– American Airlines as part of its sweetener to JetBlue when it decided use JetBlue as a feeder to its JFK operations gave the low cost carrier slots at Washington-Reagan.
– This past week Continental agreed to “lease” 18 pairs of take-off and landing slots at Newark to Southwest Airlines in order to get their merger approved.

These airport slots are public assets that airlines have received for no consideration from a government agency. That same agency, the FAA, should take the slots back based on the public good, disuse of the slots or an exhibited lack of need for the airlines ongoing business.

In the above instances of the Delta, USAir and American slot deals, the airline in question giving up slots are saying loudly and clearly, “We don’t need these slots any more for our operations.” The slots should be taken back by the FAA.

In the case of Continental, I find it incredulous that these particular slots are just not taken away by the FAA and reassigned to Southwest or auctioned off with the proceeds going to the airport and air-traffic-control maintenance funds. “Leasing” the slots still gives Continental nominal control of the slots. In the name of antitrust issues, there should be no leasing involved. Losing these slots is more appropriate.

Airline airport slots should not be allowed to be sold, bartered or leased between airlines. These slots belong to the public and should be allocated for the good of the public, not the good of the airlines that do not have aircraft or schedules to justify their retention.

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  • MVFlyer

    I agree–it should be a “use ‘em or lose ‘em” policy. They shouldn’t be barterable to the highest bidder or a preferred airline (why is Southwest the only airline getting the slots?)

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