Aviation ministry proposes changes in slot allocation guidelines

With competition growing in the Indian aviation sector, airlines will need to strive harder to maintain a slot – their most prized asset. The civil aviation ministry has proposed changes in the Slot Allocation Guidelines, 2013 which propose that the usage of slots has to be reviewed every season as against the current practice of reviewing it after two seasons or a year.

Mint had exclusively reported on 9 October that the civil aviation ministry is considering a proposal to modify the slot allocation guidelines which would change the review period for slots usage from the current practice of reviewing it after a year, to utilize scarce capacity better, two officials said.

“Historic precedence is only granted for a series of slots if the airline can demonstrate to the satisfaction of the Coordinators that the series was operated at least 80% of the time during the period allocated in the previous season,” the ministry has proposed to change ‘equivalent season’ to ‘previous season’ under Historicity – ‘Use it or Lose it’ Rule. In aviation, the winter season is valid from end of October until March and Summer season is valid from end of March until end of October.

The ministry has invited public feedback on the proposal by 28 November.

Airlines can currently claim a right to a slot if they can maintain slot adherence yearly, which means they run at least 80% of the departures committed to the regulator.

While a more frequent review will ensure that an airport utilizes its resources optimally, it may present operational challenges for airlines, especially when demand slumps. A good slot at a busy airport is the most valuable asset for an airline. But airlines often block a slot allocated to them without utilizing them fully. This leads to a wastage of scarce resources and impacts the revenue performance of airport operators.

A revision of the slot allocation guidelines was last done in 2013.

If a capacity-constrained airport has around 70 landing slots in an hour and airlines are only utilizing 65, then that is a loss of landing charge, parking charge, taxi charge, and revenue from passenger expenditure on food and beverages, retail, and shopping, among others.

Airlines are sceptical of the benefits of such a move.

“Primarily, the major challenge will remain at hubs, which are Delhi and Mumbai, and to some extent, constrained airports like Goa, Pune and Srinagar. This is set to increase the competition among airlines but may lead to a good deal for passengers as well as airports as airlines will be more worried about losing a precious slot,“ an airline executive said on condition of anonymity.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.


Source link

Leave a Comment

%d bloggers like this: