Australian airlines including Qantas and Virgin have been accused of slot hoarding. Here's how it impacts you – ABC News

Australian airlines including Qantas and Virgin have been accused of slot hoarding. Here's how it impacts you
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In August, the Australian Competition & Consumer Commission (ACCC) alleged that Qantas had intentionally cancelled 15,000 flights for its own financial gain.
The accusation, which the ACCC confirmed it would be taking to the Federal Court, was that Qantas had cancelled the flights between May and June 2022 "for reasons that were within its control".
It's not the first time that airlines have been accused of misusing airport slots or "slot hoarding".
Slot hoarding is a tactic used by major airlines to intentionally book and then cancel flights to prevent competition at airports.
Rear Vision puts contemporary events in their historical context, answering the question: "How did it come to this?"
Days before ACCC's accusation, Robert Wood, Sydney Airport Corporation's executive general manager aviation, told the Standing Committee on Economics that he believed major airlines were tactically cancelling flights.
And in July, outgoing Sydney Airport CEO Geoff Culbert said major airlines were intentionally flying less through major domestic routes, and should relinquish their airport time slots.
Earlier this month, he made a plea to the federal government to do more to prevent airlines from slot misuse.
These recent accusations have brought the issue of slot hoarding to the fore, but it remains unclear how the complex problem can be solved.
An airport slot is an allocated time that an airline can land or take off at a specific airport.
The slot concept, introduced in the 1970s by the International Air Traffic Association (IATA), is designed to help airports control airline traffic year-round, by allocating companies a specific number of slots per day.
Only Level 3 airports — or those with the highest amount of demand — require this system of management. That's about 200 of the world's busiest airports, including New York's JFK, London's Heathrow and Sydney's Kingsford Smith.
But there can be high demand for Level 3 airport slots, particularly at peak times.
According to IATA, around half of all airline passengers depart from a Level 3 airport.
The Financial Times reported that in 2016 Oman Airways bought Kenya Airlines' Heathrow slot for US$75 million ($117 million). In 2020, Air New Zealand's Heathrow slot sold for NZ$42 million ($38.77 million).
Brett Snyder, creator of airline website Cranky Flier, tells ABC RN's Rear Vision the slot system has so much influence because the airports with the highest demand "are the ones that are slot controlled".
"If [an airline] can't get into Heathrow, then that significantly hurts the ability for [them] to generate demand," Mr Snyder says.
A clause in the airport slot system known as "grandfather rights" allows airlines to keep their number of slots for the following six months if they've operated at 80 per cent of their schedule.
It's for this reason that British Airways, for example, owns more than 50 per cent of the slots at Heathrow airport.
Grandfather rights are intended to maintain stability. But Amedeo Odoni, an emeritus professor at MIT who researches airports and air traffic control, says this clause can unintentionally favour older airlines, and that's a problem.
"In a very competitive environment, this becomes an anti-competitive device," Dr Odoni says.
He says an airline with only six slots at peak times scheduled per day at a Level 3 airport can't compete financially with an airline that has hundreds of slots.
"Therefore, [airport slots] essentially protect the dominant carriers from competition from the smaller carriers. This is the central issue with [the slot system] right now worldwide."
This combination of slot value and slot distribution has led to slot hoarding, with airlines tactically blocking other airlines from taking unallocated slots.
This can be done by an airline intentionally scheduling flights beyond their capacity, and then cancelling the excess flights, which blocks out competition from high-traffic airports.
"The idea of slot hoarding is you schedule more than you expect you'll fly; you may even schedule more than you know the market demand to be," says Ian Douglas, a senior lecturer in aviation at the UNSW.
"You might even schedule more than your fleet is capable of doing."
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Currently, IATA's system to address slot hoarding is the "80:20 rule", where an airline must operate at least 80 per cent of their current flights, otherwise they risk a slot reduction in the following six-month season schedule.
Dr Douglas says this measure provides some required flexibility for cancellations, but it's not preventing slot hoarding.
"The idea of slot hoarding is that you put out a schedule that you really know you're never going to fly, and you might not even have all the resources to fly, but you publish it and you maintain these historical slots that you've had maybe for 10, 15 years," Dr Douglas says.
"And then you selectively cancel certain flights during the season, being very careful not to ever cancel more than 20 per cent of them."
The ACCC's August allegation claimed that between May and July 2022, more than 15,000 Qantas and QantasLink flights were cancelled, representing around 22 per cent of their scheduled flights for that period.
Qantas has previously stated that bad weather and air traffic control staffing shortages were the main reasons for flight cancellations.
It's not clear how best to address the problems of slot hoarding.
"One of the suggestions is always [to] have [the system] be bid-based where [airlines] have to pay for your slots," Mr Snyder says.
"But of course, if that happens, the more they're paying, then that's going to end up in higher fares."
A 2021 independent review into Sydney Airport called for the federal government to allocate additional resourcing to "scrutiny of cancellations data for selected domestic slots".
A Sydney Airport submission to this review recommended updating operating regulations beyond the slot system, including increasing runway movements to more than 80 per hour to help manage demand.
But these measures have not yet been adopted.
In September, federal transport minister Catherine King said the government is currently considering the 2021 recommendations and that announcements around slot misuse will be introduced "in due course".
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