Dieuwer
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"Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 12:56 am

"Open Skies" sound great: Any airline can start any route between two countries, federation, or unions. For instance, between the US and Europe.
In practice, this is obviously complete nonsense as several (many?) airports in e.g. Europe are slot-controlled, and have no spare slots available whatsoever. Meaning, that there is no way that you could start "any route" from say the US to AMS or LHR. Sure, you could attempt to buy a slot, but then again there might be no sellers.
Perhaps "Open Skies" should be renegotiated which specifically excludes slot-controls? And when this is not possible, cancel the Open Skies and go to simply a bilateral? Because as it is now, "Open Skies" WITH slot controlled airports favor the entrenched airlines, leaving newcomers very little if any recourse.
 
MIflyer12
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 1:00 am

Cancelling Open Skies and using bilaterals also leaves entrenched incumbants. You propose to apply significant medicine to a very small problem. Start by listing the top 50 U.S. and European that are also slot-limited and you'll see just how small.
 
Dieuwer
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 1:08 am

MIflyer12 wrote:
Cancelling Open Skies and using bilaterals also leaves entrenched incumbants. You propose to apply significant medicine to a very small problem. Start by listing the top 50 U.S. and European that are also slot-limited and you'll see just how small.


https://www.travelweekly.com/Travel-New ... t-of-space

More than half of the world's slot-coordinated airports were in Europe as of November, with the Asia-Pacific region having the next highest share, at 20%.


Among the major world airports that are slot coordinated are transatlantic connecting hubs London Heathrow, Paris de Gaulle, Frankfurt and Amsterdam. In the U.S., only New York JFK is currently a Level 3 slot-coordinated airport.



So yes, there is a severe inbalance between the US and Europe.

Simply put, slot controls are a back-door way to undermine the open skies policy: the main airline tenant at a slot-controlled airport can happily fly to airports in the counter-signatory, while airliners domiciled in the counter-signatory CANNOT simply fly to the oversees slot-controlled airport. Case in point: BA at LHR and KL at AMS are golden, while JetBlue is being screwed.
 
klakzky123
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 2:02 am

Dieuwer wrote:
MIflyer12 wrote:
Cancelling Open Skies and using bilaterals also leaves entrenched incumbants. You propose to apply significant medicine to a very small problem. Start by listing the top 50 U.S. and European that are also slot-limited and you'll see just how small.


https://www.travelweekly.com/Travel-New ... t-of-space

More than half of the world's slot-coordinated airports were in Europe as of November, with the Asia-Pacific region having the next highest share, at 20%.


Among the major world airports that are slot coordinated are transatlantic connecting hubs London Heathrow, Paris de Gaulle, Frankfurt and Amsterdam. In the U.S., only New York JFK is currently a Level 3 slot-coordinated airport.



So yes, there is a severe inbalance between the US and Europe.

Simply put, slot controls are a back-door way to undermine the open skies policy: the main airline tenant at a slot-controlled airport can happily fly to airports in the counter-signatory, while airliners domiciled in the counter-signatory CANNOT simply fly to the oversees slot-controlled airport. Case in point: BA at LHR and KL at AMS are golden, while JetBlue is being screwed.


Slot controls predate open skies policies so I'm not sure the correlation is necessarily fair. Especially in Europe, a lot of these slot controlled airports are quite small and given the rise of joint ventures, its highly unlikely that a US carrier would fly to those cities. Also joint ventures have further minimized the impact of slot controls since airlines in a JV can share slots.

Now I do agree that this penalizes an airline like B6 but even in that case, there are only a small handful of airports that B6 would ever fly to in Europe. (LHR, LGW, AMS, CDG, etc..

And most importantly, the solution can't be to go back to the old days of bilaterals. That's even more restrictive and protectionist than today's environment. I think the US would be better off applying a 5 or 10 year review on all JVs and using JV renewals as an opportunity to revisit the competitive environment (including slot allocation). For example, the DL-AM JV resulted in DOT requiring AM to divest slots and open them up to competitors. Such a requirement could be applied elsewhere if slots at an airport were too restrictive. I'm not saying DOT should do this every time but a JV renewal would at least allow the discussion to be had.
 
sagechan
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 2:07 am

They are completely separate issues. Unless slot controles are used to prevent access to an airport that is undercapacity, it should remain outside the scope of the open skies.

The solution is medium term leasing of slots. If an airport is slot controlled 10% of slots should be available to lease by auction each year. This would allow new carriers to outbid incumbents since presumably the 1st route for a new airline is more valuable than the 50th route for another. It also would raise significant revenue for airport improvements and force airlines to maximize their Network with the direct cost associated with the lease.
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Dieuwer
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 2:09 am

Another solution would be that slots can no longer be owned by an airline, but just rented for a certain period of time. Allocation of slots could be done by some sort of “lottery”.
 
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LAX772LR
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 4:52 am

sagechan wrote:
They are completely separate issues.

But they're not always treated as such, in fact there's been some rather blatant (and arguably quite hypocritical) disparity in approach to the two.

The US' negotiations with the UK in 2002 (and to a lesser extent, 1998) to end Bermuda II, vs the the "open skies" established between the US and Japan.

In the former, talks were called off over disagreement regarding LHR access:
USA's position was that open skies was meaningless without immediate competitive access to all airlines involved (i.e. force BA to cede slots to competitors).
UK's position was that we can open the skies, but airlines will have to acquire access at market rate, at whatever time or price-point they're able to procure.

In response, every entity not named British Airways, cried fowl. UK held its ground. Talks dissolved.


...................then US goes and does the exact same thing they whined about, with Japan vis-a-vis HND.
I myself, suspect a more prosaic motive... ~Thranduil
 
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zeke
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 5:51 am

Dieuwer wrote:
Case in point: BA at LHR and KL at AMS are golden, while JetBlue is being screwed.


Slots generally can be commercially traded and purchased. B6 can purchase or lease slots just like any other airline.

There is a false underlying assertion in your comments in that these slots have been given away fir free.
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mutu
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 8:09 am

And at LHR there is a slot pool for new entrants who are given priority over incumbents

It's a small help I accept but just look at how many new carriers operate from LHR which is considered full.

Getting time friendly slots is an issue I accept but that is an issue even in non slot co trolled airports
 
FromCDGtoSYD
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 8:33 am

I mean, CDG isn't really slot controlled. Unlike LHR or AMS (and even FRA or has this been solved with the latest runway ?) there are some parts of the day where there isn't that much activity and flights can easily be added. Are these slots desirable ? That is another question but CDG definitely isn't maxed out.
 
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FlyRow
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 11:11 am

zeke wrote:
Dieuwer wrote:
Case in point: BA at LHR and KL at AMS are golden, while JetBlue is being screwed.


Slots generally can be commercially traded and purchased. B6 can purchase or lease slots just like any other airline.

There is a false underlying assertion in your comments in that these slots have been given away fir free.


Then again KLM/Delta had to give up a flight pair to a third party on the JFK-AMS route to make sure the route wasn't a monopoly. Norwegian got those slots and flies to JFK now.
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avek00
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 1:06 pm

Dieuwer wrote:
"Open Skies" sound great: Any airline can start any route between two countries, federation, or unions. For instance, between the US and Europe.
In practice, this is obviously complete nonsense as several (many?) airports in e.g. Europe are slot-controlled, and have no spare slots available whatsoever. Meaning, that there is no way that you could start "any route" from say the US to AMS or LHR. Sure, you could attempt to buy a slot, but then again there might be no sellers.
Perhaps "Open Skies" should be renegotiated which specifically excludes slot-controls? And when this is not possible, cancel the Open Skies and go to simply a bilateral? Because as it is now, "Open Skies" WITH slot controlled airports favor the entrenched airlines, leaving newcomers very little if any recourse.



The flaw in your thinking is assuming the larger world economies want truly unfettered, "free-for-all" flying across borders. They do not, for a number of reasons. Open Skies agreements are intended to work alongside airport slot controls and immunized multi-lateral alliances to enable legacy operators to build cost and revenue economies of scale, adapt to evolving market preferences, and above all else keep flying between countries financially viable.
Live life to the fullest.
 
blockski
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 1:21 pm

Dieuwer wrote:
"Open Skies" sound great: Any airline can start any route between two countries, federation, or unions. For instance, between the US and Europe.
In practice, this is obviously complete nonsense as several (many?) airports in e.g. Europe are slot-controlled, and have no spare slots available whatsoever. Meaning, that there is no way that you could start "any route" from say the US to AMS or LHR. Sure, you could attempt to buy a slot, but then again there might be no sellers.
Perhaps "Open Skies" should be renegotiated which specifically excludes slot-controls? And when this is not possible, cancel the Open Skies and go to simply a bilateral? Because as it is now, "Open Skies" WITH slot controlled airports favor the entrenched airlines, leaving newcomers very little if any recourse.


None of those proposed solutions actually solve the problem, which is the availability and ability to procure slots.

Slots, as a concept, won't ever go away. Airports have capacity limits, and when you're up against that limit, you're going to need some kind of mechanism to allocate access. At the same time, you can't reasonably expect to rip any and all control over slots away from airlines offering service - that would just create the inverse problem, where someone deemed that this slot needs to go to someone else, and therefore your route is going to lose service.

So, this is where markets are useful - the various parties can better value how important a slot is to them. The public role ought to be to structure and facilitate that market. And this is why we have the IATA slot guidelines. If you have better ideas for how to improve the slot guidelines, please share.
 
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chunhimlai
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 1:23 pm

Thats why we need to build far more runways than we expected
 
sagechan
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 1:57 pm

LAX772LR wrote:
sagechan wrote:
They are completely separate issues.

But they're not always treated as such, in fact there's been some rather blatant (and arguably quite hypocritical) disparity in approach to the two.

The US' negotiations with the UK in 2002 (and to a lesser extent, 1998) to end Bermuda II, vs the the "open skies" established between the US and Japan.

In the former, talks were called off over disagreement regarding LHR access:
USA's position was that open skies was meaningless without immediate competitive access to all airlines involved (i.e. force BA to cede slots to competitors).
UK's position was that we can open the skies, but airlines will have to acquire access at market rate, at whatever time or price-point they're able to procure.

In response, every entity not named British Airways, cried fowl. UK held its ground. Talks dissolved.


...................then US goes and does the exact same thing they whined about, with Japan vis-a-vis HND.


Fair point, though I think that's more an attempt to use the leverage of an open skies agreement negotiation to force slot divestures in a slot constrained airport, versus the two being the same. But I think we both agree that open skies doesn't equal guaranteed access to the busiest airports, which is why I say they are separate issues.
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 2:08 pm

LAX772LR wrote:
sagechan wrote:
They are completely separate issues.

But they're not always treated as such, in fact there's been some rather blatant (and arguably quite hypocritical) disparity in approach to the two.

The US' negotiations with the UK in 2002 (and to a lesser extent, 1998) to end Bermuda II, vs the the "open skies" established between the US and Japan.

In the former, talks were called off over disagreement regarding LHR access:
USA's position was that open skies was meaningless without immediate competitive access to all airlines involved (i.e. force BA to cede slots to competitors).
UK's position was that we can open the skies, but airlines will have to acquire access at market rate, at whatever time or price-point they're able to procure.

In response, every entity not named British Airways, cried fowl. UK held its ground. Talks dissolved.


...................then US goes and does the exact same thing they whined about, with Japan vis-a-vis HND.


I think CO's use of the 757 on transatlantic routes was a method of putting pressure on the British government to open up LHR. By putting 757's on routes just about every airport other than LHR from EWR, CO made it unnecessary for many people living in Britain but outside London to have to travel to LHR to catch flights to the US. Now that ATL, DFW, and IAH are not off limits for flights to LHR, and any US flagged airline can fly to LHR so long as they have the slots, UA has dropped some of the British destinations CO used to serve from EWR.
 
ltbewr
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Re: "Open Skies" in a World of Slot-Controlled Airports

Wed Aug 21, 2019 2:09 pm

Flying from other airports without slot controls in a region with a slot controlled airport or offering non-stop to a secondary city without slot controls can work too. Ryanair does that, so do a number of LCC's and large/non-legacy airlines. Not everyone wants to go to NY City or London, when Philadelphia or Manchester might work for some pax, especially if a non-stop, going through a less busy, and possibly and airport with cheaper fees and in turn lower fares.
 
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LAX772LR
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Re: "Open Skies" in a World of Slot-Controlled Airports

Thu Aug 22, 2019 3:32 am

flyingclrs727 wrote:
I think CO's use of the 757 on transatlantic routes was a method of putting pressure on the British government to open up LHR.

...orrrrr, it could have something to do with CO only having approximately 25ish widebodies in their fleet, 'round the time they first began TATL 757 services.
And a number of those widebodies were limited to Hawaii and Micronesia flights.

CO was at the time, twice bankrupt and leveraged to the hilt-- so a slate of massive new orders just wasn't tenable.
The result was to use what they had (i.e. an NYC hub + a narrowbody with TATL range) to get what they could; and they did so masterfully, even after the 762ERs, 764ERs, and 772ERs started being delivered.
I myself, suspect a more prosaic motive... ~Thranduil
 
mpdpilot
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Re: "Open Skies" in a World of Slot-Controlled Airports

Thu Aug 22, 2019 4:11 am

LAX772LR wrote:
...................then US goes and does the exact same thing they whined about, with Japan vis-a-vis HND.


Legit question, can you explain this? I don't get how the UK protecting BA is the same?
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LAX772LR
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Re: "Open Skies" in a World of Slot-Controlled Airports

Thu Aug 22, 2019 4:24 am

mpdpilot wrote:
LAX772LR wrote:
...................then US goes and does the exact same thing they whined about, with Japan vis-a-vis HND.


Legit question, can you explain this? I don't get how the UK protecting BA is the same?

Grant open skies to despite a congested desired airfield's slots being artificially limited.

And by artificial limitation, I'm not even decrying the (ridiculous) time slot limitations that were initially on US ops, but also for JL/NH being prevented from using their extant departures for routes of their choice (or even sharing them with partners), which also was not initially permitted.
I myself, suspect a more prosaic motive... ~Thranduil
 
leftcoast8
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Re: "Open Skies" in a World of Slot-Controlled Airports

Thu Aug 22, 2019 4:34 am

I was shocked when I discovered South Korea does not have Open Skies with Singapore and in fact have quite restricted bilaterals (it was a big reason SQ ended service to YVR in 2009 (3x weekly), because it was routed SIN-ICN-YVR and the Korean government refused to give SQ any more SIN-ICN slots. Scoot ended up getting the three ICN slots, and to this day TZ896/897 SIN-TPE-ICN remains a 3x weekly flight. *Not*, contrary to A.net popular belief, because Air Canada complained to Transport Canada about competition).

People give AC and Transport Canada a hard time regarding supposed protectionism and not allowing EK to fly to YVR/YYC, but that's nothing compared to the power that Korean Air and Asiana have over MOLIT (the Korean government ministry responsible for aviation bilaterals). Look at the hissy fit they threw over the government allowing Finnair to fly HEL-PUS. I wonder if it has anything to do with the fact that OZ/KE are owned by chaebols (the Hanjin chaebol owns KE and Kumho Asiana Group owns OZ). Those family-run monstrosities known as chaebols are holding South Korean society and politics, and forgive my language, by the cojones. Apparently, South Korea has very few Open Skies agreements with other Asian countries, and Hong Kong may also have restrictive bilaterals for HKG-Asia (but I can't attest to the latter)
 
mpdpilot
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Re: "Open Skies" in a World of Slot-Controlled Airports

Thu Aug 22, 2019 4:42 am

LAX772LR wrote:
mpdpilot wrote:
LAX772LR wrote:
...................then US goes and does the exact same thing they whined about, with Japan vis-a-vis HND.


Legit question, can you explain this? I don't get how the UK protecting BA is the same?

Grant open skies to despite a congested desired airfield's slots being artificially limited.

And by artificial limitation, I'm not even decrying the (ridiculous) time slot limitations that were initially on US ops, but also for JL/NH being prevented from using their extant departures for routes of their choice (or even sharing them with partners), which also was not initially permitted.


OH I see so the US played hardball with the UK over LHR and rolled over for Japan at HND?

I was just reading about HND and NRT when NRT opened. If Japan had built our HND like it is today, back then, they wouldn't have needed to build NRT at all. Japan could have avoided the unpleasantness with opening NRT and had one global airport. Certainly Tokyo could handle two airports but NRT could have been a smaller cargo/LCC airport and we could have forgone all these HND international slot issues.

Speaking of other constrained airports, Hong Kongs Kai Tak surely had slots before Chep Lok opened right? It is impressive that such an influential city had such a constrained airport for so long.
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ro1960
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Re: "Open Skies" in a World of Slot-Controlled Airports

Thu Aug 22, 2019 6:04 am

FromCDGtoSYD wrote:
I mean, CDG isn't really slot controlled. Unlike LHR or AMS (and even FRA or has this been solved with the latest runway ?) there are some parts of the day where there isn't that much activity and flights can easily be added. Are these slots desirable ? That is another question but CDG definitely isn't maxed out.


The fact that there are down times during some parts of the day has nothing to do with the airport being slot restricted or not. There’s no such thing as “not really slot controlled”. Either it is or it is not.

As per data from IATA, CDG, like most european major airports, is Level 3:
https://www.iata.org/policy/slots/Documents/wsg-annex-11.6.xlsx
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PatrickZ80
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Re: "Open Skies" in a World of Slot-Controlled Airports

Thu Aug 22, 2019 6:18 am

Dieuwer wrote:
Perhaps "Open Skies" should be renegotiated which specifically excludes slot-controls? And when this is not possible, cancel the Open Skies and go to simply a bilateral? Because as it is now, "Open Skies" WITH slot controlled airports favor the entrenched airlines, leaving newcomers very little if any recourse.


This is nonsense of course. Airports just have a maximum capacity, regardless of what airlines make use of that capacity. At a certain moment an airport is full and newcomers are out of luck. Slots are needed for both international and domestic flights, so it has nothing to do with open skies versus bilaterals. In theory, you could have a slot controlled airport where domestic flights take up all of the slots, essentially blocking access for international flights. And for domestic flights, no open skies or bilaterals are needed.

Having airports slot controlled encourages newcoming airlines to be creative and look for alternative airports where there is capacity for them. That's why a lot of airlines that are starting flights to London end up at Gatwick, because there is no room for them at Heathrow. Even in a perfect world, you can't always get what you want. You can't always get slots at the world's most desired airports, those airports can't handle that much traffic.
 
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qf2220
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Re: "Open Skies" in a World of Slot-Controlled Airports

Thu Aug 22, 2019 7:01 am

LAX772LR wrote:
sagechan wrote:
They are completely separate issues.

But they're not always treated as such, in fact there's been some rather blatant (and arguably quite hypocritical) disparity in approach to the two.

The US' negotiations with the UK in 2002 (and to a lesser extent, 1998) to end Bermuda II, vs the the "open skies" established between the US and Japan.

In the former, talks were called off over disagreement regarding LHR access:
USA's position was that open skies was meaningless without immediate competitive access to all airlines involved (i.e. force BA to cede slots to competitors).
UK's position was that we can open the skies, but airlines will have to acquire access at market rate, at whatever time or price-point they're able to procure.

In response, every entity not named British Airways, cried fowl. UK held its ground. Talks dissolved.


...................then US goes and does the exact same thing they whined about, with Japan vis-a-vis HND.


I think that shows that they should be treated as separate issues - and that perhaps linking the slot issue into an open skies discussion was maybe a way to tank the open skies discussion. Or perhaps the US was trying it on with the UK to try and get some discount slots for its carriers....

IMV, they are connected insofar as they are both constraints on airline operations but one reflects a physical reality (slots) whereas the other reflects a protectionist abstraction (route rights).

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