Download Slide 1

New Level 2 Concept
JSAG SPR review – GVA September 2013
CONFIDENTIAL – NOT FOR DISTRIBUTION
What’s the problem?
• Voluntary Level 2 processes are ineffective
– Airports/ATC/regulators need greater certainty, resulting in airports being designated
Level 3 for peak-time only issues
– Small minority of uncooperative airlines cause the voluntary Level 2 process to
breakdown
• Full Level 3 imposes costs and inefficiencies on the industry
– Airline inefficiencies from having to operate during periods of low passenger demand
to maintain slot series and 80/20 (also environmental dis-benefits)
– Airport inefficiencies from new entrant rules and poor use of slots (small aircraft, late
handback, etc).
• Complex rules only necessary at a small number of airports
– Many/most current Level 3 airports only have peak time issues and market access is
not significantly constrained.
– Only the most congested hub airports tend to have genuine market access issues (eg,
LHR, FRA, NRT etc) or where there are binding environmental constraints (ie,
movement caps or night restrictions – eg, ORY, LIN, AMS)
– Only these airports need formal market access rules (slot pool, new entrants, slot
trading, etc).
CONFIDENTIAL – NOT FOR DISTRIBUTION
The Current Airport Levels
Level 1
Level 2
Level 3
Definition
Adequate capacity to meet
demand at all times
Peak time congestion
resolved by voluntary
schedule adjustment
Demand significantly
exceeds capacity; voluntary
cooperation ineffective
Message Type
SMA
SMA
SCR
Mandatory slot allocation
No
No
Yes
Market access rules
-Slot pool
-50% new entrant rule
No
No
Yes
No
No
Yes
Historic Precedence
No
No
Historic Rights
Sanctions against misuse
No
No
Yes
(depends on local law)
Slot trading and exchanges
No
No
Yes
Airport status listed by IATA
No
Yes
Yes
Usage requirements
-Slot series
-80/20 rule
-Force majeure rules
CONFIDENTIAL – NOT FOR DISTRIBUTION
Possible Future Levels
Level 1
Level 2
Level 3
Definition
Generally adequate
capacity to meet demand;
voluntary adjustments
possible
Peak time congestion
requiring slot allocation,
but all flights get slots
within +/- 1h.
Excess demand creating
market access issues; ‘no
slots’ or offers more than
+/- 1h.
Message Type
SMA
SCR
SCR
Mandatory slot allocation
No
Yes
Yes
Market access rules
-Slot pool
-50% new entrant rule
No
No
Yes
No
No
Yes
Historic Precedence
No
Historic Priority
Historic Rights
Sanctions against misuse
No
Significant off slot;
significant different way
Significant off slot;
significant different way
Slot trading and exchanges
No
Exchanges – Yes;
Trading not necessary
Yes
Airport status listed by IATA
Yes
Yes
Yes
Usage requirements
-Slot series
-80/20 rule
-Force majeure rules
CONFIDENTIAL – NOT FOR DISTRIBUTION
Current Airport by coordination level*
Level 1
11%
•
•
Level 3
(year
round)
41%
•
Level 2
38%
Level 3
(partial)
10%
* WWACG data including Level 1 airports not published by IATA
CONFIDENTIAL – NOT FOR DISTRIBUTION
Half of schedule managed airports are
Level 3, and the number is growing
Many Level 3 airports only have
modest peak-time issues, but
voluntary Level 2 does not work
Few airports have targeted Level 3
during peak seasons/periods only
Possible Future*
Level 3
(year
round)
12.5%
Level 1
25%
Level 3
(partial)
12.5%
* Indicative only
Level 2
50%
CONFIDENTIAL – NOT FOR DISTRIBUTION
•
Simpler, more effective, more targeted
processes
Benefits
• To Airlines
– More efficient and flexible scheduling (no slot series and 80/20 requirements) in
exchange for submitting to mandatory Level 2 slot allocation
– Ensure the less cooperative competitor airlines do not abuse a voluntary process
and force unnecessary Level 3 designation
• To Airports
– Ensure robust slot allocation processes without excessive complexity
– More flexible commercial development without being bound by inefficient new
entrant rules
• Other Benefits
– Objective criteria for designating airport levels, ie, whether demand can be
accommodated within +/- 1h.
– Easier to combine Level 2 with targeted Level 3 during peak seasons/times of day,
rather that declare full time Level 3
– Airport level criteria are aligned with triggers set by competition authorities (eg,
acceptability of slots +/- 1h) in recent slot remedy cases
– More complicated market access rules and slot trading are limited to only the
world’s most congested airports
– Reduces the costs of coordination and compliance
CONFIDENTIAL – NOT FOR DISTRIBUTION
Next steps
• Agreement in principle by JSAG
– Work up concept in more detail
• Consultation with ACI
– The objective is fewer Level 3 airports, not more formal Level 2 airports
• Consultation with Regulators
– eg, European Commission about compatibility with existing/future regulations
CONFIDENTIAL – NOT FOR DISTRIBUTION