Airplane takes off in front of airport at sunset

Finding a Seat at the Slots Table

Airports Align to Amplify Visibility, Voice in Worldwide Slots Guidelines Process  

By Nicole Nelson

Imagine a dozen members of your extended family showing up unannounced at the front door of your home to tell you they’re not just staying overnight, but they’re moving in.

This visualization is how Port Authority of New York & New Jersey Director of Aviation, Huntley A. Lawrence, views the airport’s role in the current system to allot airport capacity, with the International Air Transport Association representing the family of international air carriers and airports having no voice when made to obligingly open their doors.

“You may love these people – at least some of them anyway – and you want to accommodate them as best as you can, but without time and money to plan, and buy extra beds, linens, and food, you’re not always going to be a very good host,” Lawrence related. “You may normally be an excellent host, but without having a say about who stays over, and when, you simply can’t be expected to shine.”

It is Huntley’s desire to not only provide the PANYNJ’s airports—including slot-constrained John F. Kennedy International, Newark Liberty International, and LaGuardia– but all airports the ability, “to shine always.” To that end, Lawrence and his staff have become increasingly vocal on the need for airports to have a voice in the International Air Transport Association (IATA) Worldwide Slots Guidelines (WSG) process. Designed by airlines decades ago, airlines continue to write the rules and govern the process of allocating airport capacity that, ironically, does not include airports.

“You are literally at your airport, and these new rules are being made, are being modified, or being considered, and you are an outsider looking in,” Lawrence confounded, citing the need to make the current slot system more transparent, pro-consumer and pro-competition.

Lawrence said there is no question that the current system is complex by design. The legacy carriers have designed a system that makes it difficult for new airlines, or non-IATA carriers, to penetrate a multifaceted system of codes, computer messages, and also meetings.

“I am not a regulator of slots, but what I’m saying is that we’ve got a less-than-okay process in the United States,” Lawrence said, noting the current slot system poses a barrier to market entry that should be looked at very closely with all key stakeholders. “We don’t have an issue with the rules that are written. We actually have an issue with how the rules are administered, and the transparency of the entire and overall process.

“We have been crystal clear that there is an opportunity to improve collaboration, and utilization of our assets through a way more transparent process. We are certainly looking at a strategic review of the Worldwide Slot Guidelines to advocate for reform, but our focus is not on authority, or power, or control. It is the effect on the consumer, the market, competition, and the people that fly, most of all.”

PANYNJ has been looking at the various changes, or iterations of the slot order in place today, and has responded to various Notices of Proposed Rulemakings from the FAA and is a key participant in the Strategic Review of the WSG, a collaborative initiative of Airports Council International, IATA and the Worldwide Airport Coordinators Group (WWACG) that was welcomed by the Economic Commission at the 39th ICAO Assembly. Since the aviation community agreed to establish this in-depth review of the slot guidelines in 2016, PANYNJ Manager of Industry and Regulatory Relations, Bradley Rubinstein, has helped shape strategic direction for airports globally as the North American representative to the ACI Expert Group on Slots. Chief Strategy Officer Patty Clark has served on the Access to Congested Airports Task Force in the Strategic Review.

After participating in monthly meetings for the better part of two years on the taskforce, Clark said her contribution within the WSG subcommittee is her continued advocacy for the sharing of WSG data with the airport community.

“Believe it or not, data is almost exclusively given to airlines, but never to the airport, which is really unconscionable in many ways,” Clark said. “My task force that includes facilitators, airlines, and airports, are in agreement, so we hope to see positive movement there, in that data would be provided to airports and airlines. It seems very elemental, yet that’s a pretty heavy lift to get two words in.”

In addition to requesting the information for airports among the other stakeholders, Clark recommended universal formatting in Excel spreadsheets.

“One of the things that happens is you will get reams of paper with 800 pages of data requiring significant mining, and special software, et cetera. If you provide the data in a format that is universally accepted, more stakeholders could use it.

“Given the other things that we need to talk about, that is what we may accomplish at the end of the day. It is not as significant as the work that we really need to get done,” Clark said. “I’m not going to deny it is progress, but it is kind of disappointing given the barrier to entry for new entrants.”

“The Port Authority has long sought to make our airports available to anyone who wants to participate in them, but the U.S. conference where domestic slots are traded is conducted by A4A, and airports and the FAA don’t really have visibility into it,” Clark said, noting that the FAA simply receives the results with no transparency whatsoever. “Other entities besides airlines should decide who gets the benefit of this very valuable resource and that there are other considerations beyond that particular airline, and how and whom they choose to work with.”

EUROPEAN CONSENSUS

Düsseldorf Airport CEO Thomas Schnalke shares Clark’s sentiments. His Vice President of Marketing and Strategy, Lutz Honerla, is an engaged member of both the ACI-World Expert Group on Slots and the ‘Access to Congested Airports’ task force as part of the WSG strategic review.

“Jointly, the three industry partners propose greater transparency in the complex processes of slot distribution and, explicitly, an improved information situation, especially for airports,” Düsseldorf Airport CEO Thomas Schnalke said. “These proposals must now be integrated into the WSG. The goal of best utilization of scarce airport capacities can be reached only if the same information is available to all three partners on time.

“We see ourselves as equal partners when it comes to setting rules about how scarce airport infrastructure is utilized,” Schnalke continued. “We are committed to a rulebook that is consistent and set up by all industry partners together, and which equally reflects the legitimate interests of all involved.”

Schnalke said slot allocation at Düsseldorf, a coordinated Level 3 German airport, follows clear rules based on European regulation implemented in 1993. The core principles of this regulation are quite similar to the principles of the IATA WSG, including the principle of ‘Historical Rights.’

“The incumbent airlines at Düsseldorf have greatly benefited from this, because they could develop their route networks over many years and, with appropriate slot use, are entitled to reassignments,” Schnalke explained. “We embrace this core principle because it secures certainty in planning for the airport and its airlines. On the other hand, the principle makes it harder for new airlines to enter Düsseldorf. More than 90 percent of all slots at Düsseldorf are grandfathered and as such, the number of available slots for new applicants is low.”

Schnalke said that all too frequently the German airport coordinator has to deny slot applications from new applicants on a large scale or can assign them only with significant delays.

“Often, new applicants don’t receive enough slots to build a competitive flight program at Düsseldorf,” Schnalke said. “In this respect, I welcome the joint initiative by airlines, airports, and slot coordinators for the strategic review of the WSG.”

A major point of discussion in this review is a slot distribution rule for new applicants that is adapted to local conditions.

“Local conditions differ from airport to airport,” Schnalke explained. “One example is the purpose that a particular airport has for traffic, the extent of the slot scarcity, or even the particular environmental concerns related to air traffic. In this respect, we are committed to giving utmost consideration in the slot allocation to the local conditions under which air traffic at the respective airport takes place. Naturally, this must be transparent and free of discrimination.”

CANADIAN APPROACH

Greater Toronto Airports Authority (GTAA) President and CEO Howard Eng shares similar opinions on the governance of local concerns with its North American, European and other global peers. The airport has taken an innovative approach to address localized concerns accordingly and is also actively participating in the Strategic Review of the WSG.

“The WSGs serve to shape the way we approach allocation of slots, but as a guideline, it’s understood that in some cases, local procedures developed in consultation between the airport, airlines and coordinator are more effective and appropriate to the airport’s operation,” Eng said, noting that in recent years, as demand and airport utilization at Toronto Pearson have continued to increase, there has been a growing need to improve schedule coordination through efficiency, process improvements and investments in technology. To this effect, and given the complexity arising from increasing traffic, the GTAA elected to assume full ownership of slot coordination in January 2017 from the management of a third-party coordinator. This shift has allowed the GTAA to improve coordination and alignment between demand and capacity within the airport community.

“As a Level 3 coordinated airport – a designation reserved for the world’s busiest airports – we’re advocating to play a larger role in a process that guides how we maximize airport capacity,” Eng said, noting GTAA’s unique position as the airport to take slot coordination in-house. “Upon assuming the role of coordinator, the GTAA made significant investments in people, technology and processes to support this undertaking. In our second year of coordination, we have demonstrated that an airport can successfully coordinate this process, and allocate slots related to airport capacity.

“This ‘made in Canada’ approach has been very successful, by improving upon the prior coordination process through and allowing the airport to leverage the process to better support operational planning and realize significant efficiencies.”

Other airports are also taking the opportunity to cater to their own localized needs including San Francisco International Airport. SFO deviates from the WSG and instead takes an approach that meets its own goals and Department of Transportation policy objectives.

“We view the Worldwide Slot Guidelines as just that…a guideline,” SFO Airport Director Ivar C. Satero said of his Level 2 airport. “In our opinion, what’s missing from the current WSG is a meaningful role for organizations that own the airport infrastructure. It is that omission that led us to take an approach that we feel is appropriate for our airport, one that retains gates as a public asset, has a regular reallocation that rewards efficiency, and allows us to stimulate and promote competition.

“We believe that if airports were to have a seat at the (WSG) table, it should come with decision-making authority and not simply a token seat as an observer.”

GLOBAL CONCERN

Most worldwide airports are categorized as Level 1, non-coordinated airports within the WSG. But regardless of the fact that only 300 airports worldwide are held to a slot facilitated Level 2 status where demand is close to capacity; or a fully coordinated Level 3 where demand exceeds the capacity, PANYNJ’s Lawrence believes the WSG to be a policy issue that all airports should be interested in.

“The fact of the matter is you’ve got a separate body that’s making these rules,” Lawrence said. “In the end, this is really about how airports are controlled and managed; how we protect the consumer; and ensuring that there is free and transparent access into and out of our airports.”

“This is really about making sure that we’ve got the best process for the traveling public, and also a process that ensures that we optimize our assets – our airports. I believe ACI is on our side, and we intend to continue to take up this fight.”

Crowd listening to a speaker at ACI-NA’s 2017 Annual Conference

Cheers to 70 Years: The Best Is Yet to Come

By: Kevin M. Burke, President and CEO, ACI-NA

2018 represents a great milestone for Airports Council International-North America as we celebrate our seventieth anniversary as the Voice of Airports in North America. Anniversaries like this provide a great opportunity to reflect on our past, celebrate our present and look ahead to the future.

As you know, air travel – and the world – has transformed immensely over the last seventy years. And our industry’s evolution along with it hasn’t always been easy or certain. That’s one of the chief reasons ACI-NA exists.

Then in a post-war world with a growing economy, air travel was increasingly accessible to the masses. As we entered the golden age of travel, airports faced many of the same challenges we see today, including burdensome government regulation, infrastructure and investment needs, and airline decision making.

Realizing that there was power in the collective, nineteen founding members convened in New York in 1948 to establish a body that would bring airports together in addressing the challenges and issues of an evolving aviation industry.  From there, our journey took off as the Airport Operators Council.

Looking back, this industry has overcome significant hardships and setbacks. From economic ebbs and flows to airline industry deregulation and airline consolidation to the September 11, 2001 attacks, this industry has always had to be nimble and responsive to the challenge of the day.

Your association has had to be nimble too. In the past seventy years, our name has changed from Airport Operators Council to Airport Operators Council International, and now to Airports Council International-North America in an effort to make room for our ever growing U.S. and Canadian membership and global connections.

While the issues of the past may sound familiar today, so much has changed. Today, airports operate more as businesses than they ever have before.  They are becoming cities unto themselves.

The current landscape presents many unique challenges that require solutions. Today’s airports are not your father or grandfather’s airport. We are seeing a change in the way technology affects air transportation across the world.

Meeting the demands of passenger and cargo growth has never been more important. Our airports must have the ability to modernize as they seek to accommodate rapid growth in passenger and cargo traffic. In the United States alone, airports need nearly $100 billion in infrastructure upgrades and maintenance in order to remain competitive with airports across the globe.

Solving today’s challenges are essential in order to lay the foundation for the future. As such, airports around the world are actively working to enhance competition, create efficiencies through technology, and improve the passenger experience.

There used to be more than thirty airlines that no longer exist because of airline consolidation. The future of the airport industry is at stake without an economic climate that fosters airline competition and choice.

Competition has many benefits in our industry, which can be enhanced through more air service routes and more airline choices. In order to ensure communities in North America remain connected to the global marketplace, we are actively working to make certain our industry – airports and airlines – are as competitive as they can be. Our work in this important area will only grow in the years ahead.

Technology will also be a large part of an overall improved and seamless passenger experience. Today, easiness is synonymous with technology. What new technologies can we use to our benefit? Biometrics is speeding up the boarding process for certain flights, and in a just a few years, all flights may be boarded with the scan of a face.

It’s clear that we must focus on enhancing the passenger experience for a successful future. But these challenges are too big for anyone to handle alone. And that’s where your association comes in.

Members always tell me the real value of ACI-NA comes through our ability to advance airport priorities in Washington and Ottawa, provide essential industry intelligence by keeping the pulse of the issues impacting airport operations, and foster industry collaboration by creating a forum to develop and exchange best practices.  The rich history of advocating for policies and services that strengthen airports will continue as we reflect on our accomplishments and look beyond the horizon.

ACI-NA is only as strong as its members and their active engagement. Our team is proud of the members we serve because of the profound and positive impact they have on local communities across North America. Thank you for your leadership.

Today, as we celebrate our seventieth year with a strong membership and transnational – even global with the establishment of ACI World in 1992 – reach, we recognize that there are obstacles still to overcome. We’re not done yet. We’re just getting started.

Here’s to the next seventy years.

Meet the Member: Rep. Jeff Denham

ACI-NA President and CEO Kevin M. Burke recently caught up with Rep. Jeff Denham, a member of the House Transportation and Infrastructure Committee, to talk about prospects for an infrastructure bill in Congress.

ACI-NA Celebrates 2018 Infrastructure Week at TPA

Infrastructure Week, a week-long celebration of the vast network that supports – and moves – the U.S. economy, is taking place this week. ACI-NA’s Airport Infrastructure Needs Study details that U.S. airports have nearly $100 billion in infrastructure needs through 2021 to accommodate growth in passenger and cargo activity, rehabilitate existing facilities and support aircraft innovation.

For Infrastructure Week 2018, Tampa International Airport hosted ACI-NA and Building America’s Future (BAF) along with members of the Tampa Congressional delegation for an event focused on the need for airport infrastructure investment. This video highlights the lawmakers and industry leaders who called for robust infrastructure investment during the event.