Airport Coordination Limited (ACL) used the seasonal IATA Schedules Conference in Berlin, held from June 17-20, as a launch pad to pitch its new online service, SlotTrade, to the world's airlines.
Owned by nine major UK airlines and run independently on a not-for-profit basis, Airport Coordination Limited (ACL) is responsible for allocating slots at UK airports, while its international division offers the service at Dubai, Toronto City Airport, and Lagos and Abuja airports in Nigeria. ACL also coordinates airline schedules and collects data for airports, who provide an additional source of funding.
ACI international's director, James Cole, who was the London Heathrow slot coordinator, led the development of SlotTrade.
He tells Routes News: "We believe that it's the first dedicated web portal which is focused on slot trading. In April 2008 [at the time of the EU-US Open Skies] the European Commission went a long way to endorse slot trading for the first time and to remove the legal uncertainty behind it in Europe. Off the back of that clarification, ACL decided to invest in the SlotTrade website to make trading easier and more transparent."
How does SlotTrade Work?
The site is designed to help tackle the lack of transparency that remains in the slot market. In the UK, a 'grey market' has developed where monetary slot transactions are disguised as 'slot swaps'. ACL believes that its new website is a positive step in providing a more open forum for slot trading.
"Before the website was introduced, there wasn't a simple way to find data on other slots that had been traded in the past; the process depended on airlines finding each other. We are providing that one-stop shop," explains Cole.
The site has another key function, he adds: "Airlines and can post their slot requirements and respond to other airlines wishing to acquire or dispose of slots. The identity of any party expressing an interest remains confidential until discussions are held."
Users can register for free as a basic user, or pay a fee post slot requirements and to lodge expressions of interest, download market intelligence and schedule data and access regularly updated postings on completed transactions.
And while slot pairs at London Heathrow trade for millions of pounds, ACL does not intend to make any charges based on the slot trade itself, Cole adds.
If airlines conclude a deal at a slot coordinated airport (ACL's list makes up London Heathrow, Stansted and Gatwick, London City, Manchester, Dubai and Dublin), the airport slot coordinator must approve the transaction in the usual way, based on whether there is sufficient terminal capacity or if the aircraft type is changed, Cole points out.
What Are the Rules Governing the Exchange of Slots?
The current lack of transparency in the slot market is fuelled by the lack of a common regulated 'standard' in Europe, however the EU is looking at possible reforms in slot trading and whether the market should be regulated - particularly in the case of protecting new entrants and addressing competition concerns.
Reforms could address the legality of airlines exchanging slots where payment is involved, whether there should be a minimum level of transparency for transactions and whether bodies other than airlines can participate in trades.
At congested airports, the EU's 'use-it-or-lose it rule' that governs the allocation of slots is still in force - requiring airlines to use up to 80% of their scheduled slot or lose it to the slot pool.
Does SlotTrade have Merits Beyond Highly Constrained Airports?
Given the UK coalition government's decision last month to ban extra runways at the three London airports, demand for slots here will inevitably continue to exceed supply.
Is SlotTrade only relevant for slot trading at highly constrained airports? Cole explains that while European airports experiencing a capacity squeeze could also benefit from the service, including Frankfurt, Milan or Paris, in the long-term, more airports will have capacity problems. "There is a general trend for airport capacity to lag behind growth and demand," he says.
For now, slot allocation procedures are not in place at Glasgow, Edinburgh, Birmingham or Bristol airports. They are designated as Schedules Facilitated (Level 2) airport under IATA's system and are less capacity constrained. Any congestion tends to be resolved by the voluntary cooperation between airlines.
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