Slot Allocation Grandfather Rights

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  1. Earn grandfather rights t o a series of slots provi ded they operate the slots as allocated by the coordinator at leas t 80% of the time during a season ( use- it - or -lose-it rule ).
  2. Grandfather rights are currently used in the European Union to allocate airport slots. This article shows that airports prefer such a use-it-or-lose-it rule to unconditional property rights.

Take-off and landing slots at London’s Heathrow airport. These mysterious entities dictate just about everything we do as an airline and determine the timings of every one of your flights. To find out more we spoke to a world expert on airline slots. Fortunately, we didn't have to go far, he works right here at Virgin Atlantic.

David Hill is our head of Heathrow expansion. For most of his career he has worked in commercial planning, working out how to make the best use of our fleet, where we should fly, how often and on what size and type of aircraft. David has also spent five years working for Airport Coordination Limited (ACL), the organization responsible for slot allocation. ACL work with airports and airlines to make the most efficient use of capacity. They allocate and regulate slots for many of the world’s airports, including most of the UK. Few people know as much about airport capacity and slot control as David. Like everything in aviation, the deeper you delve, the more complicated it becomes.

As far as pieces of real estate go, the two runways at Heathrow have to be among the most expensive pieces of concrete on planet Earth. Imagine buying a house for several million pounds only to discover you can only live there for 90 seconds a day. That’s the deal with Heathrow’s two runways, which are so in demand a whole industry exists to decide who spends a few precious seconds on them. With David’s expert knowledge we’ve compiled this Heathrow slots guide:

What are they?
The idea of slots is quite new. Wind the clock back just 20 or 30 years and airports generally weren’t busy enough to need them. But growth in aviation and pressure on the airports, particularly in the South East of England, demanded a clever solution. A slot is defined as ‘permission to use the full range of airport infrastructure necessary to operate an air service on a specific date and time for the purpose of landing or taking off’. That includes not just the runway but the terminal building, the taxiiways, parking stands and departure gates.

Slot regulation in the UK is currently governed by EU regulations and are informed by IATA’s Worldwide Slot Guidelines. The UK government is currently looking at how new Heathrow slots should be allocated to enhance competition at the airport Not every airport needs to use them. They’re granted by ACL twice a year for summer and winter flying, and an airline is allowed to continue using a slot on the condition that they have flown at least 80% of the previous allocation (this is called ‘grandfather rights’). Too many cancellations and an airline risks losing their precious slot. On average we fly more than 97% of ours.

Grandfather rights in the market for airport slots. Grandfather rights are currently used in the European Union to allocate airport slots. This article shows that airports prefer such a use-it-or-lose-it rule to unconditional property rights. Existing users of these airports enjoy grandfather rights in relation to their current slot holdings. While the regulation provides for 50 per cent of any slots not subject to grandfather rights to be allocated to new entrants, and the remainder allocated according. They must be certain they will have access to the infrastructure for the next 25-30 years and this is why historic (grandfather) rights are appropriate. Airlines also need flexibility so they are free to use their slots as they see fit. “We don’t want to see any links between airspace routings and slots on the ground,” says Stanton.

Are slots used at all airports?
No. There are three different categories of airport in the UK.

Level 1. At a small airport like Bournemouth, you can fly into and out whenever you like (as long as they are open).
Level 2 are mid-size airports such as Belfast. These need a bit of coordination but generally you can just call and let them know your arrival or departure time. They may ask you to move your time a small amount depending on how busy they are, but the airline can chose to still operate at their requested time if that is their only option.
Level 3 are the big airports like Heathrow, Gatwick, Stansted or Manchester who are fully slot coordinated.

What determines the number of slots?

You can clearly see the wake vortex behind this landing aircraft. Photo by Bernal Saborio Flickr

The number of flights that can land on a runway is determined by the wake vortex of the aircraft. This is the air that gets churned up by the aircraft moving through the sky. The bigger the aircraft, the greater the wake vortex which means the gap after an arriving Airbus A380 has to be longer than after a much smaller Boeing 737. It gets more complicated. The A380 being bigger, is better able to cope with vortex so can fly a bit closer to the aircraft in front. On Heathrow’s runways it all averages out to about one flight landing or taking off every 90 seconds on each runway.

What is the problem at Heathrow?

Heathrow is the world’s busiest two-runway airport and the short answer is that it’s full. With over 470,000 flights a year Heathrow does an incredible job with the two runways it has. By comparison Amsterdam has six runways and JFK in New York has four, yet they both have roughly the same number of flights as Heathrow.

What Heathrow does so well is keep the landing rates up in all but the most extreme weather. In 2015, after three years of research, Heathrow became the first airport in the world to use something called time based separation which allows it to regulate the flights even more efficiently in differing wind conditions. They found that in strong winds, those vortexes we spoke of earlier decayed much quicker. This meant they could shorten the gap between landings. It’s this sort of innovation that is going on all the time to try and take the pressure off the runways, but despite everything, Heathrow really can’t take any more.

Airport

One city, three busy runways
The need for more capacity in the south east is borne out by London not only having the world’s busiest two-runway airport, but across town, Gatwick is the world’s busiest single-runway airport. Because Gatwick’s single runway is used for both take offs and landings, they achieve more movements from their one runway. (That’s all to do with those wake vortexes. A departing aircraft’s wake vortex won’t affect an arriving aircraft).

Slot Allocation Grandfather Rights Legislation

Our flight from San Francisco comes into land at Heathrow, over the London skyline.

Night slots
There’s a night jet ban at Heathrow between 11.30pm and 04.30am. Only 16 aircraft are then allowed to land between 04.30 and 06.00, when the runways are fully opened again. We hold one of those slots, normally for our early morning Hong Kong arrival. A (very) few exceptions allow departures after the night ban at 11.30pm.

During the day every single slot is used. The NATS controllers do an extraordinary job and we all recognise their hard work. Our pilots also have a part to play. Each landing is carefully planned in advance to account for the weather on landing and the optimum braking needed to vacate the runway at the earliest safe turn off. Knowing their intentions in advance also helps the controllers to sequence in the aircraft. An awful lot goes into those seconds you spend on the runway.

Trading slots
Perhaps the biggest surprise is the fact that airlines can sell their slots. Often for a huge amount of money. Before an airline can trade slots they need to show they have the grandfather rights, which means they have to have operated them for at least two years. If you no longer need a slot at a quieter airport like Manchester you would just give them back to ACL, but at Heathrow, of course, it’s a different story. All Heathrow slots are worth big money, with the most expensive ones being for early morning arrivals and lunchtime departures. These fetch an eye watering premium. You can also ask ACL to retime your slots or swap them with other airlines. What you are buying is the ability to fly to Heathrow so if your business case stacks up it can make sense to do this.

Heathrow expansion
That all brings us back to the third runway at Heathrow and how it’s going to affect slot allocation. The idea is that when it’s fully operational, one runway will operate like Gatwick’s mixed mode runway, with both take offs and landings. The other two will operate as they do now, with one dedicated to landings and one for takeoffs. It’ll probably take some time after the runway is built before it’s used to its full potential. As well as the runway, Heathrow will have to build one or two new terminals and plenty of aircraft parking spaces, and the air traffic controllers will have to build up slowly to full operations.

Slot Allocation Grandfather Rights Definition

We think the third runway at Heathrow is a golden opportunity for us to become the nation’s second flag carrier. Our new, quieter and more efficient fleet makes us ideal neighbours at Heathrow – find out more about our plans here.