MIAMI – The CEOs of Ryanair Group (FR) and Wizz Air (W6) have called on regulators to reinstate the 80/20 airport slot rule or risk stifling the recovery.
A report today on routesonline.com discusses FR’s Michael O’Leary and W6’s József Váradi speaking at the 30th ACI Europe Annual Assembly & Congress. Both CEOs are calling on European regulators to reinstate the “use-it-or-lose-it” rule, which Europe relaxed in March as COVID-19 travel restrictions and flight groundings began.
Rules dictate that airlines must lose a slot if they do not use it 80% of the time. However, regulators suspended the rule for the summer 2020 season and extended the suspension in September for winter 2020/21. The European Commission said the extension would help the industry to recover from the pandemic.
Reasons For and Against the Waiver
Several airlines and industry bodies have been in favor of the slot waiver as it allows carriers to adjust capacity to fit passenger demand. However, O’Leary claimed that a further suspension of the 80/20 rule into summer 2021 would be bad for airports and passengers. It would also prolong the time it would take for the sector to recover.
“There’s no justification for a slot waiver for summer ‘21 and yet regulators will rubber-stamp it.” O’Leary said. “Giving KLM, Air France, Lufthansa, and the others slot waivers means we will have a very slow recovery through summer ’21. Even if we have a vaccine. There’s no incentive for those carriers to put up their capacity.”
O’Leary claimed Ryanair would “respond quickly and respond with price” once travel restrictions ease and demand begins to return. But he said the Irish ULCC can only add capacity at airports that are not slot-constrained.
“Airports should be very concerned—and they should be mobilizing governments around Europe against these automatic extensions. The airports and the consumers are the ones who are going to get hit.” O’Leary said.
ULCCs Can’t Expand
“We opposed the extension, but we lost. The next issue is whether the extension will continue into the winter of ’21 and the summer of ’22. Airports need to start wising up to the fact that they’re going to get scalped.”
Wizz Air CEO József Váradi also reiterated calls to scrap the slots waiver. He has previously argued that protected slots are blocking the Hungarian ULCC from expanding at airports like London Gatwick (LGW). Váradi said the waiver was not in the public interest, serving only airlines that “have been monopolizing access to markets.”
“Many airports are basically empty at the moment, but the rules prevent new entrants from accessing them,” Váradi said. “It doesn’t make any sense. I think accessibility to airports must be opened up unconditionally.”
Wizz opened a new base at LGW in October but claimed that a lack of available slots thwarted its efforts to further expand. The airline has accused rivals of “slot-blocking,” alleging that some carriers at LGW are seeking to retain slots “that they have no intention of operating in the near future.”
Featured image: Ryanair Boeing 737-8AS reg. EI-DHS taxing for take off at Naples International Airport (NAP). Photo: Marco Macca – @aviator_ita