Potential Europe-Asia trade war looms over unused airport slots

As regional air traffic in the West begins to increase significantly after the ravages of the pandemic on commercial airlines, the EU looks set to instigate tougher rules regarding the use, or lack of use, of existing airport slots.

During the worst of the pandemic, ‘use it or lose it’ rules in relation to airport slots held by carriers were relaxed. However, with the EU announcing back in July the intention to force airlines to use a minimum of 50% of their slots or lose them to competing carriers, which will come into effect in six weeks’ time, Asian carriers, particularly those in Singapore, Hong Kong and South Korea have expressed concerns as recovery of the industry is slower there, principally because much of the commercial airline traffic is long haul. For example, Asian airlines operated at just 14% of the pre-pandemic 2019 level in the month of July.

Many Western carriers are at a great advantage as local and regional airline traffic has bounced back and in Europe International travel is now at 46% of 2019 levels and 48% in the U.S. In the event that Asian carriers are forced to operate at 50% of pre-pandemic levels to retain prized and valuable airport slots in the West, it has been made clear there will be a reciprocal ‘tit-for-tat’ expectation at Asian airports. Ultimately, this could well lead to political fights over important global trade transport links and result in numerous European aircraft flying with empty seats simply to retain airport slots.

While there has been a global relaxation of airport slot usage, the EU has chosen to go against industry recommendations for the forthcoming winter season, primarily as a result of lobbying from regional low-cost carriers such as Ryanair, as well as privatized European airports who are keen to start generating reasonable returns once again. The U.S. however has chosen not to go down the same route and has already announced a more lenient set of rules for the winter with regard to airport slots.