Airlines seek centralised slot norms

As India's major airports choke under increasing air traffic congestion with additional slots hard to come by, airlines want the government to create centralised slot guidelines for the country. The new system will help in optimising the use of scarce airport capacity by allowing airlines and airports to plan their whole network and schedule and provide choice and connectivity to the passengers.

Further, it is likely to bring in transparency, flexibility, certainty, consistency and sustainability into the slots allotment, which is often mired by allegations of airlines unnecessarily 'blocking' slots to avoid it getting allotted to rival carriers in future. Further, there have also been allegations of airports being partial in allotting slots to dominant airlines at the cost of new entrants and weaker players. The guidelines are already in place in some of the leading countries like Germany, France and the UK.

By having a centrally regulated system in place at all airports across the country, the guidelines will allow airlines to plan their whole network and schedule and provide choice and connectivity to the passengers. Alexandre de Juniac, director general and CEO, IATA, said that the guidelines mean "one slot co-ordinator for one country".

A presentation is said to have been made by the carrier representatives and airline lobby body IATA to the Ministry of Civil Aviation. The sources said that the ministry officials are considering the proposal before taking any decision over bringing any regulation in this regard.

The development comes as the government, airlines, airports, flier bodies and other stakeholders debate over ways to make slot allocations more efficient. Solutions ranging from putting a cap on a maximum number of take-off and landing an airline can have at a congested airport to imposing higher charges for peak hour slots are aggressively being discussed, though it may turn to be controversial and likely to be contested by airlines which stand to lose.

India, which is amongst the fastest growing aviation market in the world, has been witnessing about 20% annual growth in the domestic sector. However, the infrastructure growth has not been able to match the booming growth, which has resulted in severe congestion at all major airports, especially at Mumbai and Delhi. The constraints of slots are said to have slowed down the growth of Mumbai, which is a single runway airport. Mumbai's second airport in the satellite city of Navi Mumbai, which has been in the construction plans since over past two decades, is still a few years away from being operational.

A report prepared by aviation consultancy firm in February last year revealed that very few or no slots are available for the carriers during the peak hours of morning and evening. Based on CAPA's econometric forecasts for Indian passengers traffic, the airport system is expected to exceed its maximum structural capacity by FY2022, based on data available as of June 2017. This level could be breached earlier if the new projects are delayed.

According to analysts, the situation becomes even more worrisome as Indian airlines are expected to induct close to 350-400 aircraft over the next five years. The three largest LCCs will account for close to 275 of these aircraft. These airlines are already facing challenges in securing overnight parking bays. This will become increasingly difficult with so many aircraft scheduled for induction over the next five years. "These aircraft will also have to fly somewhere. As metro airports become saturated, airlines will have to deploy more capacity to tier 2 cities over the next three years due to slot constraints" the forecast by CAPA added.

As per the estimate prepared by CAPA, India will need to construct an additional 500-600 million of capacity by 2030. This will require $36-45 billion of investment, including $12-15 billion of equity capital. The 55 new airports that are estimated to be required by 2030 will need 150,000 to 200,000 acres of land to be allotted for their development.

Experts claim that a national airports commission should be established, with the mandate for developing long-term national airports master plan with a 20-30 year horizon, taking into account Central and state economic plans and multi-modal transport

$45 b – of investment required to increase additional capacity at airports