Aviation – The Worldwide Slot Guidelines

Authors: Hanna Schebesta and Giovanni Sartor
European University Institute

Abstract: This case study explores the Worldwide Slot Guidelines (WSG), which represent a set of agreements made under the auspices of the International Air Transport Association (IATA) in order to allocate airport capacity. The right to use airport capacity for the purpose of takeoff and landing operations at airports is commonly called slots, with each airport having a finite amount of airport capacity. Thus, the slot allocation process is one of resource management: the WSG were developed as a global industry standard to address a key constraint in the aviation domain. The actual process of slot allocation is complex and involves organizations and stakeholders at multiple levels, all falling under the umbrella of IATA, a trade association representing 240 airlines. It designates particularly congested airports, creates roles of airport coordinators, and establishes management principles for slot allocation. Because they manage a valuable economic resource, the transparency and independence of coordinators is of particular concern: this has resulted in the institutionalization of a negotiating process to ensure accountability among key stakeholders. Through an examination of the history and key points of change in the process, the WSG case presents an example of private sector coordinated resource management.

Table of Contents

I. Introduction
A. The Aviation Domain
B. The Problem: Slot Allocation
II. Governance Through the WSG
A. Mission and Function
B. The Functional Solution to Overcome Infrastructure Capacity Overloads
C. The Allocation Process
D. Enablers
III. Governance of the WSG
A. IATA/Slot Policy Working Group
B. World Wide Airport Coordinators Group
C. The Joint Slot Advisory Group
D. Issue Identification and Change
IV. Outcomes
A. Evaluation of the WSG Operation
B. Stakeholder Views
C. Cross-Sphere Synchronization
V. Conclusions

I. Introduction

The following case study discusses the Worldwide Slot Guidelines (WSG), an industry standard for airport slot management operated under the auspices of the International Air Transport Association (IATA). The focus of the study is on multilevel governance. It describes first the basic governance mechanisms through the WSG and governance of the WSG, followed by a critical discussion of the outcomes.

A. The Aviation Domain

Aviation is a truly global domain and a modern necessity, with connections that traverse local, national and international territorial boundaries and governance spheres. It is also a domain in which the optimization of the system’s functions is of the highest priority; the need for functionality creates pressure for coordination at the global level. It is also a domain in which technological advancement imposes important constraints on the system functioning. There are strong requirements for uniformity or interoperability when it comes to innovation.

The aviation domain is marked by sovereign state responsibility and characterized by a territorial approach. The provision of air navigation services is assigned to entities by the state (designated air navigation service providers). This is still the case even though there are efforts to move away from the state-based territorial governance system, towards an approach focused on sectors involving multiple states (e.g., the Single European Sky) or in the competitive provision of non-critical services.[1] Infrastructure capacity places very rigid constraints on the aviation domain. Opening new airports or creating new slots is highly cost intensive.[2] Traffic patterns and demand for slots are mapped through long-term strategic planning for flight routes. Lastly, aviation is a high-risk domain, meaning that system failures result in catastrophic events and it is thus an area of high-risk regulation.

[1] See, e.g., European Commission, “Single European Sky II,” http://ec.europa.eu/transport/modes/air/single_european_sky/ses_2_en.htm.
[2] According to an Oxera Consulting study prepared for the UK Parliament’s Transport Committee in 2013, the indicative range of costs for a new airport is between £10-15 billion, depending on the number of runways and location. See Oxera Consulting Ltd., “Would a new hub airport be commercially viable?” (January 25, 2013), http://www.parliament.uk/documents/commons-committees/transport/Would-new-hub-airport-be-commercially-viable.pdf.

B. The Problem: Slot Allocation

Aircraft routes are so-called “highways of the sky,” where aircrafts remain under direct air traffic control provided by the responsible air navigation service provider. Changes from one airway to another are carried out at waypoints. Take-off and landing operations require the use of an airport’s terminal, runway, air traffic control, and other infrastructure and ground services, all of which comprise an airport’s capacity. The right to use such airport capacity at a given time is commonly called a “slot.”[3]

Airport slot capacity has emerged as one of the most important constraints of the aviation domain.[4] The overall increase in demand is coupled with a limited increase of capacity. For example, in summer 2000 at Heathrow Airport there was a demand for 335,578 slots but only 283,681 were allocated. While it is acknowledged[5] that slot allocation is not a solution to the underlying problem—infrastructure shortcomings—the scheduling of slots is one way to mitigate the capacity constraints. As such, aviation slotting is a way of regulating the access to a network by allocating access rights to infrastructure use.

Today, airport slot allocation is widely based on the WSG standard, which provides a global standardized process for airport slot management. The standard developed gradually over time out of practices occurring under the auspices of the IATA, the global airlines’ umbrella trade organisation. This started in 1947, at a time when airlines were conducting bilateral negotiations in order to adjust their schedules. The 1960s saw a greater congestion at important airports, which resulted in a greater need for coordination between airlines and airports. Finally, the IATA codified this practice in the first Worldwide Slot Guidelines in 1976 according to the “consensus” of the community and has been maintaining the WSG ever since. The WSG are conceived as a “living document” that is adapted over time to meet operational challenges and the changing needs of the community.[6]

Under the WSG, management of airport slots is only necessary in the most congested airports. Accordingly, airports are classified as Level 1 “non-coordinated,” Level 2 “schedule facilitated,” or Level 3 “coordinated” airports. Worldwide, around 283 airports are Level 2 and 3 and subject to airport facilitation and coordination, respectively.[7] Of these, around 174 are European airports, while only 6 are located in the US.[8] In the words of one commentator: “with the exception of the US, the system seems to be attractive to virtually all parts in the world.”[9]

The major stakeholders in slot allocation are: the airlines and other aircraft operators that want to use landing or takeoff slots of the airport, airport managing bodies responsible for the airport facilities, air traffic control authorities that provide the respective airport and airspace services, and, government authorities responsible for an airport. When an airport is classified as congested, the WSG requires the creation of a new role: a facilitator for Level 2 or a coordinator for Level 3 airports. These roles will be discussed in greater detail below.

[3] In the US the definition of a slot is a reservation for a takeoff or landing, not associated to further infrastructure apart from the runway; in the EU the reference is to a range of airport infrastructures and a slot is confined to the “coordinated airports” (i.e., Level 3 WSG congested airports). See David Gillen, “Airport Slots: A Primer” in: Achim I. Czerny, Peter Forsyth, David Gillen, and Hans Martin Niemeier, eds., Airport Slots (Hampshire: Ashgate Publishing 2008), p. 41.
[4] Katja Brecke‚ “Airport Slot Allocation: Quo Vadis, EU?,” Air & Space Law, vol. 36(3) (2011): pp. 183-200.
[5] IATA, “Worldwide Slot Guidelines (WSG),” (August 2014, 6th Ed.), § 1.1, http://www.iata.org/policy/slots/Documents/wsg-6.pdf.
[6] Ibid., p. 1.
[7] IATA, WSG Annex, “Contact List for Level 2/3 Airports,” § 11.12 (December 19, 2014), http://www.iata.org/policy/slots/Documents/wsg-annex-11.12.xlsx.
[8] Two Level 3 airports (JFK and EWR) and four Level 2 (ORD, LAX, MCO, and SFO).
[9] Claus Ulrich‚ “How the present (IATA) Slot Allocation Works” in Achim I. Czerny, Peter Forsyth, David Gillen, and Hans Martin Niemeier, eds., Airport Slots (Hampshire: Ashgate Publishing 2008), p. 19.

II. Governance Through the WSG

As mentioned in the previous section, the WSG were developed by the IATA in 1976. Today, the IATA represents 240 airlines and 84% of total global air traffic, all of which adhere to the WSG.[10]

[10] IATA, “About Us,” http://www.iata.org/about/Pages/index.aspx.

A. Mission and Function

The function of the WSG is to define the allocation and management of airport capacity in order to harmonize slot allocation standards. According to the Guidelines, “the WSG provides a consistent, transparent and fair method for the allocation and management of airport capacity. Air transport is global in nature and requires harmonized slot allocation standards at both the origin and destination airports of each route in order to maximize an airline’s efficient use of resources.”[11]

Transparency is one of the key principles of the WSG.[12] In particular, the created roles of coordinator and facilitator have an obligation of acting in a transparent way.[13] Several transparency mechanisms are designated by prescribing in detail the information to be published (for example, regarding slot exchanges and slot transfers). Efficiency is another cornerstone of the WSG. It is mentioned several times in key provisions describing the purpose of the WSG: “The prime objective of airport coordination is to ensure the most efficient use of airport infrastructure in order to maximize benefits to the greatest number of airport users.”[14] and “Air transport is global in nature and requires harmonized slot allocation standards at both the origin and destination airports of each route in order to maximize an airline’s efficient use of resources.”[15] The rules take into account efficiency both from airlines’ and airports’ points of view.

Accessibility to the WSG is an important element, mentioned in the first sentence of the document: “The WSG is organized and presented in a way to allow easy access to the policies, principles and processes that support the allocation and management of airport slots at congested airports worldwide.” Specific accessibility rules are enshrined, (e.g., the access to databases on websites).[16] The document does not mention legitimacy explicitly, although several rules seem to incorporate legitimacy indirectly. Understanding legitimacy as the appropriate and accepted use of power and authority for the common good, it seems that the WSG departs from the assumption that its actions are legitimate. Also participation is not referred to explicitly, but there are detailed rules to structure participation, which are explored below.

Other important principles are those of consistency, fairness, and non-discrimination, which are mentioned throughout the WSG document. The slot allocation itself is based on four principles: certainty of access, flexibility to mix and match slots to meet operational challenges and changing market needs, sustainability of costs, and transparency of allocation.

[11] IATA, WSG § 2.1.4 (emphasis added).
[12] “The WSG provides a consistent, transparent and fair method for the allocation and management of airport capacity.” IATA, WSG § 2.1.4 (emphasis added).
[13] IATA, WSG §§ 4.2.3, and 5.2.3.
[14] Ibid., § 1.2.1 (emphasis added).
[15] Ibid., § 2.1.4 (emphasis added).
[16] Ibid., § 9.9.6 (emphasis added).

B. The Functional Solution to Overcome Infrastructure Capacity Overloads

The WSG operates by designating particularly congested airports, creating the roles of airport coordinators and facilitators and laying down management principles for slot allocation at these. In order to identify critical spots in the network, airports are categorized as Level 1, 2, or 3 depending on capacity constraints.

• Level 1: airports where the capacity of the airport infrastructure is generally adequate to meet the demands of airport users at all times.
• Level 2: airports where there is potential for congestion during some periods of the day, week, or season which can be resolved by voluntary cooperation between airlines. A facilitator is appointed to facilitate the planned operations of airlines using or planning to use the airport.
• Level 3: airports where capacity providers have not developed sufficient infrastructure, or where governments have imposed conditions that make it impossible to meet demand. A coordinator is appointed to allocate slots to airlines and other aircraft operators using or planning to use the airport as a means of managing available capacity.[17]

“Participation” in the slotting process in first instance depends on having been classified as a congested airport, a classification which is carried out according to the rules created by the WSG. If an airport is designated as Level 3, an airport coordinator is nominated, while for Level 2 airports a facilitator is appointed. The designation of a Level 3 airport is carried out in “full consultation with all stakeholders and interested parties.”[18] According to the WSG, stakeholders are:

• Airlines and other aircraft operators using or planning to use the airport.
• The airport managing body that administers and manages the airport facilities.
• The air traffic control authorities responsible for the airport and airspace.
• The coordinator or facilitator responsible for coordination at the airport.
• The government authorities responsible for the airport.[19]

The airport managing bodies are responsible for fixing appropriate coordination parameters. This means fixing the hourly slots at an airport, in total movements and respective arrivals and departures. Capacity is one parameter, constrained by, for example, runway capacity, number of parking positions, waiting room capacities, and number of gates.[20] However, the coordination parameters also reflect other constraints such as noise or environmental regulations.[21]

The WSG creates the role of airport coordinators and facilitators. A facilitator is defined as “the organization or individual responsible for collecting data on planned operations at a Level 2 airport, and recommending voluntary schedule adjustments as necessary.” Coordinators are defined as: “The organization or individual responsible for slot allocation at a Level 3 airport.”[22] Coordinators must be functionally and financially independent of any single interested party and act in a neutral, transparent and non-discriminatory way.[23] They are appointed in consultation with the airport managing body, the airlines using the airport and their representative organizations such as IATA.[24] The role of the coordinator is described in detail in the WSG.[25] A supporting document contains suggestions for the best practices for the functional and financial independence of coordinators.[26]

5.5.1 The coordinator will:

• Allocate slots to airlines and other aircraft operators in a neutral, transparent and non->discriminatory way, on the basis of the applicable coordination parameters, and in >accordance with the priority criteria of the WSG and any local guidelines and >regulations.
• Make available to interested parties details of the applicable coordination parameters, >local guidelines and regulations, and any other criteria used in the allocation of slots, at >least 7 days before the Initial Submission Deadline for each SC, where possible.
• Make available to the airlines, ideally in SSIM Chapter 6 format and by online means, >lists of slots allocated, remaining slots available and the reasons why slots were not >allocated as requested.
• Attend and participate in all IATA SCs.
• Monitor cancellations made after the Historic Baseline Date and any non-utilization of >slots for the purpose of applying the Use it or Lose it rule.
• Monitor planned and actual use of slots to identify any possible instances of >intentional misuse of slots, and initiate a dialogue with the airline or aircraft operator >concerned.[27]
• Offer advice to airlines and the relevant authorities on all matters likely to improve >airport capacity or slot allocation flexibility, and in particular on any area which will help >the airport return to Level 2 or Level 1.
• Address problems arising from conflicting requirements in such a way as to avoid any >need for external intervention.

Coordinators have specific transparency obligations: “In the interests of fairness and transparency, coordinators must make available, upon request, the following information for review by all interested parties: (a) Historical slots by airline and chronologically for all airlines. (b) Requested slots (initial submissions) by airline and chronologically for all airlines. (c) All allocated slots, and outstanding slot requests, by airline and chronologically for all airlines. (d) Remaining slots available. (e) Comparisons between (a) and (c) above by time interval coordinated and by airline. (f) Full details of the constraints being used in coordination. (g) Full details of the criteria being used in the allocation of slots.”[28]

A Coordination Committee is established at Level 3 airports to advise the coordinator on matters relating to capacity, slot allocation and monitoring the use of slots at the airport. Membership of the Coordination Committee is open to:

• All airlines using the airport regularly and their representative organizations.
• The airport managing body.
• Air traffic control authorities.
• Representatives of general/business aviation (where relevant).[29]

These parties have relatively far-reaching consultation rights that are explicitly enshrined in the WSG. At the internal airport level, participation is contingent on a link to the airport. That link is defined as use for airlines or responsibility for air traffic control.

There are formal dispute resolution mechanisms, for example, in case of an airline’s disagreement with a coordinator’s determination of historical slots. In the very institutionalized slot negotiation process a deadline is set (“Agreed Historics Deadline”) by which such a disagreement must be raised. Airlines can seek mediation by the Coordination Committee.

The WSG do not provide for public enforcement mechanisms. It is the national governments that set enforcement tasks. For example, in Germany violations of slot allocations are classified as “Ordnungswidrigkeiten” (a type of administrative offense) and subject to an administrative fine.[30] However, enforcement remains a weak spot: “it has been pointed out that the existing slot allocation procedures lack the sanction mechanisms which could disincentivize some air operators to adopt practices that decrease the efficiency of the slot allocation process, such as overbidding of slots, late return of slots, and underutilization. These deficiencies need to be addressed.”[31]

[17] Ibid., § 1.4.
[18] Ibid., § 1.5.
[19] Ibid., § 1.3.
[20] Claus Ulrich‚ “How the present (IATA) Slot Allocation Works” in Achim I. Czerny, Peter Forsyth, David Gillen, and Hans Martin Niemeier, eds., Airport Slots (Hampshire: Ashgate Publishing 2008), p. 11.
[21] Ibid., pp. 11-12.
[22] IATA, WSG, “Terms and Abbreviations,” p. 53.
[23] Ibid., § 1.7.1.
[24] Ibid., § 5.2.1.
[25] Ibid., § 5.5.
[26] IATA, WSG Annex, “Independence of Coordinator,” § 11.14 (August 2014, 6th Ed.), https://www.iata.org/policy/slots/Documents/wsg-annex-11.14.pdf.
[27] IATA, WSG § 5.5.1.
[28] IATA, “Frequently Asked Questions: Slot Allocation Process—Is a Coordinator obliged to provide data from its database to any airline requresting such information?,” http://www.iata.org/policy/slots/pages/faq.aspx.
[29] IATA, WSG § 5.6.
[30] Bundesministerium der Justiz, “Verordnung über die Durchführung der Flughafenkoordinierung vom 13. Juni 1994 (BGBl. I S. 1262), die zuletzt durch Artikel 16 des Gesetzes vom 29. Juli 2005 (BGBl. I S. 2424) geändert worden ist,” http://www.fhkd.org/images/pdf/FHKV.pdf.
[31] International Civil Aviation Organization (ICAO), “Worldwide Air Transport Conference, 6th Meeting: Slot Allocation,” Working Paper 11, ATConf/6-WP/11 (December 10, 2012), http://www.icao.int/Meetings/atconf6/Documents/WorkingPapers/ATConf6-wp011_en.pdf.

C. The Allocation Process

The process of allocating slots is highly formalized, the main event being the Slot Conference. In particular, the WSG lay down the operating procedures for the IATA Slot Conference. The conference is a physical meeting of the network participants, which takes place semi-annually (June and November) in different locations across the globe. The sole purpose of the Slot Conference is allocating and managing slots at Level 3 airports and discussing schedule adjustments at Level 2 airports.[32] It is subject to strict timing through the Calendar of Coordination. Two IATA Scheduling Conferences are held per year. As an example, the preparatory activities with correlated deadlines are given below:

• 15 September 2014 SHL Deadline
• 2 October 2014 Agreed Historics Deadline
• 09 October 2014 Initial Submission Deadline
• 28 October 2014 AppCal opened to Coordinators
• 30 October 2014 SAL Deadline
• 03 November 2014 AppCal opened to Airlines
• 11 November 2014 IATA Slot Conference
• 20 January 2015 Slot Return Deadline
• 31 January 2015 Historics Baseline Date

All airlines (IATA and non-IATA) with operating licenses can participate in the Slot Conference. Airline delegates must be fully authorized by the airline management to bind their company at the negotiations of the Slot Conference.

[32] IATA, WSG § 2.2.2.

D. Enablers

The bi-annual Slot Conferences and their institutionalization through the surrounding schedule/process and digital communication tools are the main enablers in the domain. The Slot Conference is a forum in which the two main stakeholder groups meet (the airlines and the airport coordinators). It is embedded in tight schedules of post and ante event activities. Above all it results in a better distribution of information about demand and supply, and in some sense creates a slot market similar to a stock exchange.

There are several tools that enhance the physical conference. For example, there is a conference web tool called AppCal, a Standards Schedules Information Manual (SSIM), and an IATA online portal known as SlotLink. AppCal is the IATA’s web-based appointments calendar tool. It facilitates the IATA Slot Conference appointment making process among participants and creates a meeting agenda prior to Conference commencement. The Standards Schedules Information Manual contains standards and procedures for schedules data exchanges.[33] The IATA Schedules Information Standards Committee maintains the manual. IATA also maintains a workspace for airline scheduling activities using SlotLink. It serves as a support for the Slot Conference, as a communication forum for industry stakeholders, holds a library, and hosts the IATA workgroup dedicated to Slot Standards & Policies. Additionally, the IATA provides introductory and advanced trainings to new attendees of the Slot Conference and participants in the airport coordination process.

The WSG are a standard. What makes the Worldwide Slot Guidelines particularly interesting is the way in which they operate. They are embedded in a tight network of institutional structures and formalized processes, which provide the real life traction of the mere document text itself. The role of the Slot conference must be highlighted in this respect. It is a “formalized” informal contact platform. As commentator Claus Ulrich puts it: “experience has shown that even in the age of electronic communication, personal meetings are extremely useful for achieving solutions, and this forum is also being used for discussions among airlines themselves, eventually to exchange (‘swap’) slots, or for discussions among different airport coordinators in order to jointly find solutions for international flights.”[34]

[33] “To facilitate the exchange of data, the IATA Member Airlines initiated the development of an official set of Recommended Practices to guide the industry along mutually compatible lines for schedule data handling procedures. These Recommended Practices and associated industry code sets are published in the Standard Schedules Information Manual (SSIM).” See IATA, “Standard Schedules Information Manual,” Ref. No. 9179-21 (March 2011), http://www.cohor.org/wp-content/uploads/2013/04/SSIM-March-2011.pdf.
[34] Claus Ulrich‚ “How the present (IATA) Slot Allocation Works” in Achim I. Czerny, Peter Forsyth, David Gillen, and Hans Martin Niemeier, eds., Airport Slots (Hampshire: Ashgate Publishing 2008), p. 16.

III. Governance of the WSG

The WSG are overseen by the Joint Slot Advisory Group (JSAG), which is an IATA forum. The structure of the slotting governance network is concentrated in two global stakeholder institutions: (1) the airlines in IATA, in particular the Slot Policy Working Group, and (2) the airport coordinators in the World Wide Airport Coordinators Group (WWACG). These two global stakeholder institutions come together in the JSAG, with a delegation of seven airline members and seven airport coordinators.

A. IATA/Slot Policy Working Group

IATA membership is open to airlines operating scheduled and non-scheduled air services that hold an IATA Operational Safety Audit (IOSA) registration. IATA is now largely funded commercially through marketing its own products and services, but “remains devoted to its non-for profit operations principles.”[35] It is incorporated in Canada.[36]

IATA has set up the Slot Policy Working Group (SPWG). The mandates are laid down in the Working Group’s Term of References:

• Development of amendments to the World Wide Slot Guidelines.
• Represent IATA Members at the Joint Slot Advisory Group (JSAG) that meets regularly with airport coordinators to discuss matters of mutual interest concerning the Slot Conference and slot management matters.
• Provide technical guidance to IATA dialogue with regulatory and other interested parties on schedules and slot matters.
• Provide guidance to IATA in the restructuring of the Slot Conference into a cost effective and efficient process that delivers timely and valued service to IATA Members and the industry as a whole.[37]

[35] IATA, “About Us—From a New Trade Association to a New Strategic Trust,” http://www.iata.org/about/Pages/history_5.aspx.
[36] For the Act of Incorporation, Articles of Association, Rules, Boards and Composition see IATA, “IATA’s Corporate Governance Structure,” http://www.iata.org/about/pages/corporate-structure.aspx.
[37] IATA, “Medical Advisory Group—Terms of Reference” (October 2013), http://www.iata.org/about/Documents/working-groups-terms-of-reference-membership.pdf.

B. World Wide Airport Coordinators Group

The WWACG membership is open to all coordinators (natural or legal persons) of Level 3 designated airports and to schedules facilitators of Level 2 airports under the WSG. The WWACG is funded by its members. The members are national coordination or schedules facilitation organizations. These organizations’ member structures and national airline and airport participation are extremely diverse and subject to differing funding arrangements. For example COHOR: Airport Coordination, France has a budget of €1.44 million for one fiscal year, and is funded partially by airport management bodies and airlines. Other entities are also partially state funded. The organization comprises of 12 air carriers and 3 airport managing bodies, including Aéroports de Paris, Aéroport de Lyon, and Aéroport de Nice.[38]

[38] See World Wide Airport Coordinators Group (WWACG), “Organizing & Funding Arrangements of WWACG Members,” http://www.wwacg.org/FTableList.aspx?list=11.

C. The Joint Slot Advisory Group

The JSAG brings together these two global stakeholder institutions, SPWG and WWACG. It is an IATA forum for member airlines and airport coordinators to discuss issues of common concern and oversee the WSG. The JSAG also advises on the IATA Slot Conference organization. Recommendations of JSAG to IATA are “based upon consensus between JSAG members and input from the IATA Slot Policy Working Group (SPWG) and the Worldwide Airport Coordinators Group (WWACG).”[39] Changes agreed to by the JSAG are presented to the Heads of Delegation of the Slot Conference for majority endorsement.

Within the JSAG, the airlines’ representatives are a subgroup of the SPWG, appointed by the IATA Director General, from a list of member employees having expressed an interest and demonstrated skill and experience.[40] Looking at the composition of airline members, large and prestigious airline companies have been chosen. For example, members include Air France, All Nippon, American Airlines, British Airways, Deutsche Lufthansa AG, KLM, United Air Lines.

The representative of the airport coordinators comprise the WWACG Core Group, which consists of seven members—elected for two-year terms (renewable)—from within the WWACG that represents the Airport Coordinator Community. The JSAG meets as necessary, but one meeting each year is to be held at the Geneva or Montreal offices of the IATA.

According to the JSAG terms of reference “every effort will be made to achieve a broad geographical representation of airlines and coordinators.”[41] The geographical spread of members has roughly one representative per continent, with the exception of Europeans, who are overrepresented.

From a governance point of view it is interesting to note that the WSG created the roles of coordinators and facilitators, which are now a significant stakeholder institutions governing the WSG standardization process.

[39] IATA, WSG Annex, “Joint Slot Advisory Group—Terms of Reference,” § 11.6, http://www.iata.org/policy/slots/Documents/wsg-annex-11.6.pdf.
[40] See IATA, WSG Annex, “Slot Policy Working Group (SPWG) Terms of Reference,” § 11.5, http://www.iata.org/policy/slots/Documents/wsg-annex-11.5.pdf.
[41] IATA, WSG Annex, § 11.6.

D. Issue Identification and Change

The WSG are understood as a living document. This means that they change the rules of slot allocation to address changing needs and new practices of the community. Changes can be suggested by filling in a simple document that is available on the Internet, indicating the summary of the proposed change, reasons for the change, proposed amendment to the text, and implications or impact.[42] The proposal is then discussed within the JSAG meetings. Initial issue identification is undertaken mainly through the slot aviation community, for example, by providing easy access for change proposals.

Functionally, the issues identified related to slot allocation are dealt with in an exclusively technical fashion. Perhaps one could advance the claim that topics are artificially made more technical in order to circumvent their political nature. Certainly slot allocation as an issue has been isolated from other aviation governance concerns and been given an autonomous governance network.

Two governance characteristics can be pointed out as particularly relevant: (1) creating a flexible system of rules that is organically mapped on existing processes and (2) the isolation of relevant technical aspects within an autonomous governance sub-system.

[42] See IATA, “Proposal for Revision of the WSG,” http://www.iata.org/policy/slots/Documents/pro-rev-cur-wsg.doc.

IV. Outcomes

A. Evaluation of the WSG Operation

The outcomes of the WSG can be evaluated on two aspects. The first is functional, namely whether slot allocation alleviated airport bottlenecks, and whether it is indeed the optimal mechanism. The second is an evaluation of the governance processes, and whether the WSG has created a viable process for different stakeholders to participate in decision-making.

On a functional level, only congested airports are provided with a specific slot regulation. The solution to congestion issues is thus based on two phases: (1) the identification and classification of overloaded spots in the network (i.e., congested airports) and (2) the process for slot allocation, which is currently a negotiated quota system with the potential for a secondary trading market. While the system has provided a workable solution for the aviation domain, it has been subject to criticism, notably for its anti-competitive effects and rigidity, resulting in sub-optimal slot allocation. For example, it is argued that “grandfathering rights”[43] result in a substantial burden on new entrants and prevent effective competition.

Several alternatives in this respect are discussed, namely congestion pricing,[44] auctioning,[45] and systems of secondary trading. It is questioned who actually owns slots–“the Member State, the airport or the air carriers themselves,”[46] and whether the allocated slots are a transferrable property right. The problem of allocating slots for free is that, currently, airlines have no incentives to price slots, and acquisition of slots is done independently of slot valuation. In theory, as long as the “ownership” of slots is assigned, secondary trading would also lead to efficient market outcomes. Although a slot market may suffer certain imperfections, notably information asymmetries, it is generally judged to be capable of fostering competition and hence a more efficient allocation.[47] Thus, it is argued that a system of secondary trading could complement the official WSG slot allocation system.

A second problem that surfaces with respect to secondary trading is the interactions between different governance spheres, as it is geographically regulated and practiced in different ways. Secondary trading under the EU rules is currently an area of legal uncertainty, but does occur in the UK.[48] Under EU law, secondary trading was subject to some legal challenges, but ultimately is tolerated. Additionally, the EU Commission has proposed a regulation that would formalize the secondary trading option.

[43] Grandfathering rights refer to the fact that new slot allocation is based on slot use historics for airlines.
[44] The congestion pricing model would reflect an increase in price with the level of congestion faced by an airport. However, information about the value of slots for airlines is not known, therefore the pricing would be difficult to undertake and likely lead to inefficiencies. See Jakub Kociubiński, “Regulatory Challenges of Airport Slot Allocation in the European Union,” Wroclaw Review of Law, Administration & Economics, vol. 3(1) (June 2013): pp. 28-46.
[45] Alternatives proposed are auctions, in which slots are sold at the best price. However, a simple method of auctioning likely inhibits important synergies in slot aggregation, although alternative forms of auctioning can address these issues effectively. Jakub Kociubiński discusses for example the Vickrey-Clarke-Groves system and Cryptographic Combinatorial Clock-Proxy. See Kociubiński, “Regulatory Challenges,” (June 2013).
[46] Kociubiński, “Regulatory Challenges,” (June 2013), p. 32.
[47] Ibid., pp. 42-43.
[48] “Such a market in airport slots (in the form of secondary trading) has been in operation at UK airports for some time, as the Commission recognised in a 2008 Communication. Indeed, slots at London Heathrow have changed hands for high prices: in March 2008 it was widely reported that Continental Airlines had paid $ 209 million (or € 143 million at the then exchange rate) for four pairs of slots at Heathrow.” European Commission, “Proposal for a Regulation of the European Parliament and of the Council on common rules for the allocation of slots at European airports,” COM(2011) 827 final (Brussels, 1.12.2011), http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52011PC0827.

B. Stakeholder Views

In the European context, the EU has conducted a wide stakeholder consultation. It needs to be understood as having several limitations: it is a geographically confined overview, although several non-European parties made submissions and—secondly—concerns the EU regulation on slotting. Although the rules correspond to a very high degree with those of the WSG on which they are based, the results reflect the industry positions on the slotting system. From this very wide stakeholder consultation, the following industry positions appear:

• Airline and airline associations overall seem satisfied with the functioning of the system.
• Concerns have been expressed that slots needed capacity expansion rather than management.
• Airlines can be split up into different types of operators, for example, scheduled, charter and low cost operators, business aviation, and their associations. These do not always have homogenous interests: business aviation operators, for example, argued that business aviation is unfairly disadvantaged, as at most EU airports it is not possible to gain historic rights to slots on the basis of total operations.[49]

Airports and airport associations seemed to be adopting a more operational take on the evaluation of the slotting mechanism, most often indicating specific aspects to be improved. These consisted notably of the need to move from an administrative model towards an efficiency model. An example cited was “by encouraging larger aircraft or by enhancing incentives and sanctions to increase the actual usage of allocated capacity.”[50] The main problematic points identified were the ownership of slots, the improvement of the transparency of slot allocation, and the question of secondary trading.

Transparency and the independence of coordinators were issues that were repeatedly referred to in an EU consultation. Notably, the independence of coordinators and mechanisms in place to ensure this independence were questioned by airline and airline associations: “Many carriers highlighted the differences in the level and standard of information provided in different States, although most added that this information was still sufficient to plan their schedules.”[51]

In terms of governance, however, the system has gradually institutionalized a negotiation process that grew out of the need for slot allocation. It is a very mature constellation of stakeholders, which has grown organically according to the needs identified since 1976. By creating the roles of coordinators and facilitators, the WSG gave a voice to airports that is functionally limited to the specific issue of slot allocation. Effectively, the airline industry created its own interlocutor at airports. Now, aviation slot governance is characterized by an intense concentration of two main stakeholder camps, namely airports on the one hand and airlines on the other. This institutional concentration of main stakeholders is the pillar upon which aviation slot governance rests.

[49] Steer Davies Gleave (European Commission Study), “Impact Assessment of Revisions to Regulation 95/93—Results of Stakeholder Consultation,” Prepared for European Commission DG MOVE DM24 Brussels B-1049 (March 2011).
[50] Ibid.
[51] Ibid., at 1.49

C. Cross-Sphere Synchronization

The number of capacity constrained Level 3 airports has risen constantly, from 136 in 2000, to 155 in 2010, and to 167 in 2014.[52] Of these, 104 airports are situated in Europe, of which 92 are in the 27 EU Member States. 43 are in Asia Pacific, and only 11 are scattered between the Middle East, North America, and South Africa.[53] The geographical distribution indicates that the process of slot allocation is much more important for aviation in Europe than it is in other areas, such as the United States.

The geographical spread is reflected in the personnel at all levels of the global slot governance network. The organization of the network is multilayered, and made up of regional and national umbrella organisations.

Taking the example of the EU, the European Airport Coordinators Association (EUACA) is the European level counterpart of the worldwide airport coordinators group. Membership of the EUACA comprises coordinators and schedules facilitators within the EU and the European Economic Area (EEA) or otherwise legally bound by the European Economic Community (EEC) Regulation 95/93 either as individuals or as representatives of their organisations. At the national level, the umbrella structures are very diverse in terms of membership. In particular, the degree to which a national level coordinator cooperative is made up of different airports or simply the most important one is dependent on how many Level 3 airports exist in a country.

Importantly, as the WSG recognizes, states or regions may have deviating regulations, which take precedence over the industry standard. There is always the risk that legislation trumps the WSG.

A current issue is, for example, the proposal to revise the slots EEC Regulation No 95/93 on the allocation of slots at community airports, which has caused a discrepancy between the IATA position and the Commission proposal. The IATA’s main European Regional Office and the Operations and Service Center are located in Madrid. The IATA maintains relations with governments, and intensively monitors EU developments. The IATA prepared a frank position paper, in which it stated its disagreement with several of the proposals made by the European Commission. The European Parliament has backed the IATA position in several respects, so that the European Commission’s proposal will likely be amended to be more in line with the IATA position.

While local regulations trump the non-binding WSG standards, they can also reinforce the standard. This is the case, for example, in the EU, which makes most elements of the WSG binding through legislation. At the same time, this national or regional legislative interface also acts as a check-and-balance, as the legislative process results in a critical examination of the private rules.

[52] IATA, WSG Annex, “Contact List for Level 2/3 Airports,” § 11.12 (December 19, 2014); ICAO, “Worldwide Air Transport Conference, 6th Meeting: Slot Allocation,” Working Paper 11, ATConf/6-WP/11 (December 10, 2012).
[53] Ibid.

V. Conclusions

Structurally, the aviation domain is made up of the following actors: states, designated air navigation service providers, ancillary service providers, airport operators, airlines, the manufacturing industry, and passengers. Slot allocation is a “private” island in a largely public aviation domain as it brings together the main private stakeholders, namely airlines and airports.

In terms of governance, what kind of solutions does the WSG present? (1) The identification of bottlenecks, and devising a commonly accepted methodology for doing so. The classification of critical allocation spots in the network became institutionalized. An airport is classified as Level 3 following a demand and capacity analysis, carried out according to the rules laid down in the WSG. The slot allocation process is a tiered process in that airports are classified in one of three categories of capacity constraints. In this sense, the greater the problem, the greater participation in the solution process. After the identification of critical spots, the solution presented by the WSG (2) is the creation of new management roles within the system, and a concentration of two main groups of stakeholders. The creation of new roles (airport coordinators and airport facilitators) leads to formalized representation of airports. The roles are (3) integrated in a formalized negotiation and solution finding process. The WSG streamlined and formalized processes which had informally developed and created a successful forum, namely the IATA Slot Conference.

The main criticism targeted towards the WSG-system is that it commits to an administrative mechanism, which—while providing a stable solution to the issue of the allocation of slots—may provide sub-optimal allocation with regard to efficiency. The WSG does not assign the slots to those parties that would value them most. It is possible that an increase in efficiency could be obtained if the slots were able to be traded, and therefore a valuable object of property rights.