Asian, EU regulators argue over slot usage rules

Airlines could be forced to operate unviable long-haul services between the European Union and the Far East, despite a lack of sustained demand, in order to protect their slots as regulators from both sides squabble over the reinstatement of “use-it-or-lose-it” policies.

Reuters said Asian aviation regulators have threatened to impose strict slot usage rules in retaliation for the planned tightening of a COVID era-related waiver in the European Union. The only country to confirm it is contemplating such plans is Singapore, although the news agency also identified the authorities in Hong Kong, as well as China Airlines and Korean Air in their company capacity, as worried about the developments.

The EU reverted on its full slot use policy waiver, introduced after the outbreak of the COVID-19 pandemic, in February 2021. As of the Summer 2021 season, airlines are required to use at least 50% of their allocated slots without losing them, down from 80% in pre-pandemic times. The policy provides for multiple exceptions and allows airlines to temporarily return surplus slots for reallocation without permanently losing them. It also exempts carriers from countries subject to stringent travel restrictions from the 50% usage requirement. In July 2021, the European Commission suggested it was planning to keep the policy for the Winter 2021/22 season while gradually removing the exemptions.

At that time, the announcement provoked the wrath of the International Air Travel Association (IATA), which argued that the recovery was not yet sustainable and usage thresholds reached in the summer season could be too high for the winter season. Still, the recovery of the short- and medium-haul demand has made it more feasible for European carriers to achieve that level, while airlines from other markets still see little demand for services to the EU.

The Asian regulators are said to be particularly concerned about the short transition period for countries subject to travel restrictions. Once they are removed, the EU provides only a six-week period to resume operations before the slot usage rules re-enter into force. As such, the carriers are worried they will have to operate flights before demand picks up.

Should Asian regulators reciprocate with a similar slot policy, European airlines could also be forced to operate economically unviable long-haul services solely to protect their slots.