2024-08-02 04:17:28
It’s been a frustrating year for the regional aviation industry, with Rex Airways just becoming the second Australian airline to go into voluntary administration this year following the collapse of Bonza Airlines in April.
Is Qantas CEO Vanessa Hudson right? Not enough passengers Supporting more than three airlines in Australia?
This is certainly a convenient statement for our domestic aviation duopoly, Qantas and Virgin Australia, as they now face less competition.
Or has Rex fallen victim to strategic management by other airlines, limiting the number of airport slots they can smoothly fly between capital cities? This practice is known as “slot hoarding”.
On Thursday, former Australian Competition and Consumer Commission (ACCC) chairman Rod Sims seemed to think so, Tell ABC Radio:
It is beyond belief that the government would outsource the management of Sydney Airport’s timetable to a company controlled by Qantas and Virgin Atlantic.
This is certainly not a new accusation. Rex, Bonza,as well as Australian Competition and Consumer Commission Concerns have been raised before.
So how do airline slots work exactly and does the system need an overhaul?
What are slot machines?
The International Air Transport Association (IATA) developed the Slot System in the 1970s to ease airport congestion. The system was designed to improve traffic flows during peak travel periods at “Tier 3” high-traffic density airports (including Sydney and Melbourne).
Under this system, airlines are given a certain number of available slots each day. Importantly, the number of available slots is fixed because they represent specific time windows during which aircraft can take off or land.
airline schedule Airlines book flight schedules in advance as part of a yield management program that covers the entire year and takes into account expected peak and off-peak travel times for business and leisure travelers.
Taras Vishniya/Shutterstock
The airline is owned by Airport Infrastructure Capacity, whether or not it is being used.
The IATA system relies on what is known as the “80/20 rule”, which stipulates that airlines must use 80% of the allocated slots, otherwise they will lose the unused slots. The 20% is a buffer. But criticize Too generous.
Airlines can also Buy, Sell or Leasethey do not use slot machines due to low demand or the need to gain financial benefits. These slot machines can be sold Huge amounts of money.
Can slot machines be hoarded?
Broadly speaking, slot banking is the practice of booking slots and then cancelling them in bad faith in order to prevent other airlines from obtaining premium travel time.
Last June, John Sharp, then vice chairman of Rex Blame Qantas Participation in practice:
It is clear that Qantas is stockpiling slots by cancelling enough flights to comply with the 80/20 rule.
Time slot availability is Sydney Airport Problemsas the number of takeoffs and landings per hour is capped at 80.
Sydney Airport Corporation’s executive general manager of aviation, Robert Wood, and the airport’s then chief executive, Geoff Culbert, also said Serious concerns About the time period usage last year.
In February this year, the federal government announced a A series of reforms Sydney Airport’s slot system. These measures include requirements for greater transparency in slot usage, and new independent audits.
It is worth noting that the government Keep the change, please Comply with the 80/20 rule.
What needs to change?
A series of further reforms could help make the airport system friendlier and more equitable for new entrants.
One possibility is Sell A predetermined number of slots are provided to major participating airlines. Airlines must present a business case outlining their proposed needs over the next year.
Currently, airlines can apply for slots from the airport slot management team without paying any fees. This system favors established airlines that meet the 80/20 rule.
Ryan Fletcher/Shutterstock
But a key criticism of the proposal is that the cost of buying time slots Will be passed down Opening flights to passengers could lead to higher ticket prices, and bidding for flight slots would also add new cost barriers for would-be startup challengers.
Another possibility is to look at Fairness-based time slot allocationmeasuring airline demand against airport infrastructure.
Airlines that have historically used 80% of their allocated slots will be given priority in bidding Up to 50% The total amount of airport slots allocated for the next year.
The remaining 50% of slots can be given priority to new airlines that don’t have a long history, with the goal of providing them with take-off and landing times that are not exactly premium but close enough to premium.
Airlines that fail to achieve the 80% target or are found to be abusing slot-buying rules will have their top-fair status removed and placed in a slot allocation “black zone” until their performance metrics are brought up to standard.
Australia’s domestic flights are already at capacity and face challenges ahead. Government reforms will provide better oversight of airports’ use of the 80/20 rule, helping to reduce the risk of anti-competitive behaviour.
Australian airlines have the right to compete and not feel unfairly handicapped, and we as consumers have the right to fair airfares.
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