Slot Management

IUBH Bad Honnef

17.12..2020
Jörg Bauer
Airport Capacity and Strategic Slot Management

lufthansagroup.com
Agenda

Airport Capacity – A mostly European Crisis

Slot Coordination – A brief Introduction

Slot Management – The Airline Process

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A typical Day in the World of Aviation:
It is getting crowded in the Air and even more so on the Ground!

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A typical Day during COVID-19 Pandemic:
Unprecedented, massive traffic reduction by 90% within three weeks.

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In common language, two very different kinds of slots are mixed-up

Airport Slot ATC Slot

Slot Coordinator Responsibility Eurocontrol (Networkmanager)

Permission to use Airport Infrastructure in Time for departure taking into account arrival,
specific Time Window for Arrival or Departure Definition departure and enroute situation, affected by
for a single date or series. weather, capacity and traffic conditions

Allocation up to 5 month in advance for approx. Allocated on day of ops for a single date and
200 congested airports worldwide Allocation updated instantly
Advance Planning Tool Tactical Tool on Day of Operation

No direct link between Airport and ATC Slot Relationship ATC Slots overrule Airport Slots

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Not every Airport has Airport Slots
Airport Level 1: Level 2: Level 3:
Classification Non-coordinated airports Schedule facilitated airports Slot coordinated airports
Airport is congested, capacity
Sufficient capacity to meet Traffic (almost) reaches capacity
Capacity traffic demand (no bottlenecks) limits at some busy hours of day
fully utilized. Excess demand
can‘t be served
Flight plans are transmitted to
Flight plans communicated to Slot clearance from Slot
Handling and Schedule Facilitator, who can
Handling Agents, no clearance Coordinator mandatory and
Clearance necessary
recommend schedule changes.
strict adherence required
Collaboration recommended

Examples KSF (Kassel), HHN (Hahn), BOS CGN, LUX, BUD, DRS, LEJ, ATH FRA, MUC, DUS, LHR, CDG, SIN

Preconditions for introduction of slot coordination FRA

• Capacity analysis (Regular review of critical values for runway, terminal, delays)
• Evidence of capacity overload, i.e. demand exceeds capacity observable and enduring
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Airport Capacity is not a fixed Number of Movements/ Hour but a fine
Balance between maximum Utilization and minimal Irregularity Cost
Correlation between capacity utilization
and delay in LHR *
20
18  The cost of an overselling airport
infrastructure has to be paid by airlines
16
and consumers (passenger rights
14 compensation and lost time of life)!
Average delay

12
10  Airports are not participating in these
8 irregularity costs. Therefore an average
6 capacity utilization of 100% is easy for
4
them to demand!
2
0
-0,1 0,4 0,9 1,4
Demand/capacity ratio * Source: Airport Heathrow 2011
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Overview of global Airport Capacity:
Congestion mainly a European problem due to limited Airport Expansion

204 Level 3 Airports globally,

thereof 104 in Europe!

= Level 1
Adequate airport infrastructure
= Level 2
Airports with potential for congestion
= Level 3
Airports where conditions make it
impossible to meet demand
Source: IATA WSG Annex 11.6
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Agenda

Airport Capacity – A mostly European Crisis

Slot Coordination – A brief Introduction

Slot Management – The Airline Process

Airport Casino @ FRA

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Slot Definition
Slot shall mean the permission given by a coordinator to use the full range of airport infrastructure necessary
to operate an air service at a coordinated airport on a specific time and date for the purpose of landing or
take-off as allocated by a coordinator in accordance (Council Regulation (EEC) 95/93).
Slot: Arrival Monday at 10.00 on the 31.3.2019
(Only of interest for ad-hoc operations)
Slot series: Arrival every Monday at 10.00 through the summer season (30 slots)
Mon
Scheduled Service: Daily arrival at 10.00 through the summer season (210 slots)

31.3.2019 30 weeks*7 days of week = 210 slots 26.10.2019

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Slot Definition
Slot shall mean the permission given by a coordinator to use the full range of airport infrastructure necessary
to operate an air service at a coordinated airport on a specific time and date for the purpose of landing or
take-off as allocated by a coordinator in accordance (Council Regulation (EEC) 95/93).
Slot: Arrival Monday at 10.00 on the 31.3.2019
(Only of interest for ad-hoc operations)
Slot series: Arrival every Monday at 10.00 through the summer season (30 slots)
Mon
Scheduled Service: Daily arrival at 10.00 and departure 10.45 through the summer season (420 slots)

Arrival Departure

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Legal Framework: Global Guidelines and National/ Local Law
IATA Worldwide Slot Guidelines (WSG) provide definitions of:
• slots, slot series, criteria for the slot allocation process
• rules, rights and duties of the stakeholders involved
• not international law but global standard for local law to ensure compatibility

National Laws (e.g. EU Slot Regulation (EEC) No 95/93):

• common rules for the allocation of slots at Community airports,
• immediately enforceable as law in all Member States simultaneously

Local Rules:
• airport and/or country specific;
• e.g. adhoc flights, night flights, procedures

!
Challenge: Differing interpretation of rules
• by Coordinators and/or Member States (and hence: different practices)
• e.g. historic precedence, slot swaps, ad-hocs

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Who does Slot Coordination?
• Slot coordination started in the 70s in Europe when airports started to become
congested within airline scheduling departments (BA for LHR, AF for CDG etc.).

• Perceived or real discrimination and lack of transparency led to establishment of

independent slot coordinators through EU regulation in line with IATA WSG.

• In the EU, Member States appoint slot coordinators (natural or legal persons) for
their respective countries, who are responsible for:
• Neutral and transparent slot allocation according to prior defined priorities
• Procedure of slot monitoring (“use-it-or-lose-it” rule, slot performance, deadlines)
• In case of slot misuse imposition of sanctions like slot withdrawal, lower priority or
monetary penalties
• The same coordinator may be appointed for more than one airport

• In parallel and based on IATA WSG, independent coordinators were founded in

many non-European countries all over the globe.

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Primary Slot Allocation by Coordinators

Objectives of Slot Allocation

• Fair, non-discriminatory and transparent
• Efficient use of scarce airport capacity

Priorities for Slot Allocation (Example: EU Reg. 95/93)

Priority
• Grandfather rights („Historics“, “use-it-or-lose-it”): Prior used slot series to be re-allocated
for the next equivalent scheduling period if at least 80% of the slot were actually used
• Adjusted grandfather rights („retimed Historics“)
• Slot pool of remaining additional slots, unused slots, returned slots or have otherwise become
available („80/20“- rule) and are allocated according to the following priorities:
 New Entrant (50%): <5 slots/day planning a service which is operated by max. 2 other airlines
 All the year („Yearrounds“) extension of seasonal to full-year service
 Remaining slots: Daily services have higher prio versus flights on single weekdays, full season
services versus part-season services

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Slot Mobility – Secondary Slot Allocation among Airlines
Slots may be:
DEP 08:15
FRA
 Transferred within Airline (route, type of service, aircraft type do not matter)
LH 3250 LH 400
To CDG To JFK
A320 A380

DEP 18:15
BKK
 Exchanged between Airlines: Must be 1:1, often to solve each carrier‘s slot problem
LH 772 TG 2235
BKK
DEP 18:30

 Transferred between Airlines: Limited to the following cases: DEP 15:15

VIE
 Between Parent and Subsidiary* companies, and between subsidiaries of the same parent
LH 3250 OS 337
 As part of the Acquisition of Control over the capital of an air carrier ARR 11:30
 As part of total or partial Take-Over when the slots are directly related to the part taken over DUS
AB 1600 LH 4310
* Slot transfers possible within LH Group (LH, LX, OS, EW, SN, EN, LCAG)
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Summary: Today‘s Slot Regime offers Flexibility to adapt to Market
Changes as well as Reliability for long-term Planning and Investment

 Administrative process through independent coordinators

 Planning reliability through grandfather rights

 Flexibility through the possibility of re-timings, slot

exchanges

 Compatibility with worldwide rules for global transport

system

 Balanced approach taking into account the interests of all

stakeholders (traveling public, airports, airlines,...)

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Agenda

Airport Capacity – A mostly European Crisis

Slot Coordination – A brief Introduction

Slot Management – The Airline Process

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Over 80% of LH Flights slot constraint at Departure or Arrival (or both)!
Therefore, Slot Managent critical Airline Function for Lufthansa Group

Share of Coordination Level of Airline Network Number of Airports per Coordination Level
percentage, based on frequencies/week absolute, based on frequencies/week

Lufthansa 81% American Airlines

Emirates 81% United
British Airways 80% Ryanair
Easyjet 70% Easyjet

Air China 70% Lufthansa

Air France 69% Air China

Ryanair 59% Air France

United British Airways

= Level 1
American Airlines Emirates
= Level 2
0% 20% 40% 60% 80% 100%
= Level 3
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The goal of Slot Management is to optimize and develop the Slot Portfolio
in order to ensure Implementation of a demand oriented Schedule
Slot Strategy & Politics
S • Participation in WSG rule making and coordination committees
L • Representation of LH interests directly and via industry associations
O • Strategic Projects (incl. M&A projects, slot valuation, etc.)
T Goals:
M Slot Handling Optimal use of current
• Evaluation of scheduling scenarios 1. Slot Portfolio
A • Optimization of bank structures FRA, MUC, ZRH, VIE Continuous improvement
N • Coordination of time changes with flight- and market planning 2. of Slot Portfolio
A • Communication with airport coordinators regarding changes
Identification of
3.
G Slot Exchange valuable growth potential
E • Coordination of slot exchanges with partners and other airlines Increasing value of these
4. off-balance sheet assets
M
E Slot Monitoring
• Securing grandfather rights by continuous monitoring of slot usage
N
• Determination of potential cancellation volume for seasonalization
T • Monitoring of slot opportunities
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Slot Management is intimately involved in the Flight Planning Cycle
within the Network Planning Department

Slot Management Activity

1. Providing Slot Portfolio for schedule
optimization
2. Checking SHL from coordinators for (80/20),
claiming „beyond airlines control“
3. Matching new Schedule with Historics, retimed
Historics. Creating New/ New Entrant requests
4. Receiving SAL. Generating list of „slot
problems“ (mismatches between req/ alloc
5. Meeting with other Airlines and coordinators to
solve „slot problems“ (swaps, ring-swaps etc.)
6. Return of Slots w/o intention to use, swap or
use in joint operation
7. Initialize Baseline in SlotMonitoring Tool

8. Continuous processing of schedule changes/

adaptions (commercial, operational, etc.)

9. SlotMonitoring done by Operational Control

Center

SHL = Slot Historics List

SAL Slot Allocation List
SRD = Slot Return Date
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Slot Management is driven by Processes and IT Tools

Flight Scheduling (e.g. NetlineSched) Slot Coordinator (e.g. e-Airportslots.aero)

Schedule Scenarios Adjust to Offer Slot Allocation
TIM Slot Requests
„Slot Problem“ K(onfirmed) CR
EQT Canx due to NoSlot O(ffer)
NEW CL
Slot Handling Slot Monitoring N
D

Operational Slot Management (e.g. NetlineSlot)

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The Slot Portfolio of an Airline varies with the Function of the Airport for
the whole Network – Expect to see different Slot Shares
FRA MUC ZRH VIE

57,3 48,1
61,3 52,7
% %
% %
9,4 15,0
% % 11,7
%

Hubs Decentral Bases

LHR CDG AMS MAD BKK DXB

7,7 4,2 3,1 2,6 0,7 0,5

% % % % % %

LH Group Star Alliance Outstations

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Hub-and-Spoke 101: Economies of Scope and Scale

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ARR
DEP

Airline Slot Management

0

-20

-80
-60
-40
20
40
60
80

0
30
100
130
200
230
300
330
400
430 I
500
530
600
630
II

700
730
800
830
900
930
1000
1030
III

1100
1130
1200
1230
1300
IV

1330
1400
1430
V

1500
1530
Connecting Bank Structure FRA Summer 2019

1600
1630
FRA S19 (VT1) - 60min ARR/DEP

1700
1730
1800
1830
VI

1900
1930
2000
2030
2100
2130
2200
2230
2300
2330
What the Competition is doing at their Hubs…

AF in CDG BA in LHR

 CDG has seen constant capacity increases  LHR is most congested airport, no capacity increases
 Enabled Air France to built perfect bank system  BA unable to built banc structure due to OAL Historics
 Maximizes connecting opportunities for customers  But LON huge catchment, no transfer pax needed!

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COVID-19 Pandemic:
Shutting down Hub FRA within 3 weeks – Re-Start will take much longer

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Pre-COVID-19 Trends with Impact on Slot Management
• Transparent procedures and cost in Europe. Different situation elsewhere.

• Some of todays top airlines were not in the list some ten years ago. Slots
are no obstacle to competition and market entry.

• Rising monopoly fees (airport, ATC and taxes), fuel cost and diminishing
yields lead to distressed airlines, market exits and consolidation.

• Growth and job creation elsewhere (BOGU carrier) due to lacking support
of airline industry in Europe.

• Expensive infrastructure in Europe versus state driven projects at Europe‘s

borders. Governments order, airlines pay.
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Vielen Dank für
Ihre Aufmerksamkeit

lufthansagroup.com
Demand is dependent on airport, season, day of the week and time of day

Season Day of Week Time of Day

MAD: MUC: CDG:
Unused capacity and different levels of Demand Monday-Friday is 85%, on week- Consistent capacity utilization, lack of
demand during the season, lack of ends 10 % lower demand during afternoon
demand during summer and week-ends
1615

1565

110
1515

1400
100
1465

1200
90
1415

1000
1365
800 80

1315
600 70
1265 400 60
200
50
1215

1165
0
Mo Di Mi Do Fr Sa So 40
1115
6 8 10 12 14 16 18 20 LT

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Slot Usage in more detail:
Unused slots are primarily due to lack of demand (season, holidays, etc.)
FRA Airport DUS Airport
Summer Season

95%
Avg
90%

80% 80%

Winter Season

90% Avg 85%

80% 80%

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