CSCMP's Supply Chain Quarterly
March 31, 2020
Forward Thinking

IATA welcomes EC efforts to suspend "use it or lose it" rule for airport slots

But association says suspension until June is not enough; urges leaders to extend the change through October to give airlines maximum flexibility in dealing with the effects of the coronavirus.

The International Air Transport Association (IATA) said Friday that it welcomed efforts by the European Commission (EC) to suspend the "use it or lose it" rule for airport slots through June, but said the move is not enough to help airlines recover from a drastic decline in traffic due to the coronavirus pandemic in the long term.

The "use it or lose it" rule requires airlines to operate a majority of their scheduled flights in order to avoid forfeiting their airport landing slots. IATA and others say relaxing the rule gives airlines more flexibility to plan schedules, redeploy aircraft, and develop strategies for the recovery phase of the coronavirus pandemic, which has decimated the airline industry. Airlines had asked for the rule to be extended until October to cover the entire season.

"The suspension of the slot use rules until June will allow airlines to begin putting in place measures to cope with the unprecedented fall in traffic, but it is a shorter period than airlines had requested," IATA wrote in its Friday statement. "Airlines need the suspension to be extended to cover the whole season (to October), as other regulators worldwide have already agreed. The EC will therefore need to review the extension request by April 15."

IATA says a suspension of the rule until October will allow airlines to: 

  • Plan schedules and redeploy aircraft and crew to where demand is highest.
  • Improve economic and environmental sustainability by ensuring that flights for which there is no demand can be cancelled.
  •  Enable more flexibility to plan for the recovery phase and re-introduce capacity where and when needed.
  • Ensure that the industry can return to normal as quickly as possible once the crisis is over.

"Airlines are in crisis. The collapse in demand is unprecedented. And airlines are struggling to match capacity to the fast-changing situation," Rafael Schvartzman, IATA's regional vice president for Europe, said in a statement Friday. "The Commission's decision to suspend slot use rules until June means that airlines can make these critical decisions immediately—without worrying about the impact on future availability of slots. This is much needed and most welcome. However, given all the uncertainties, it is disappointing that the decision does not cover the full season."

In early March, IATA estimated that airline revenues could fall by nearly 20% if the COVID-19 outbreak is not contained. The estimate was made before the U.S. announcement restricting inbound travelers to the United States from the Schengen area in Europe.

"Airlines are implementing emergency measures under severe cash flow conditions. Along with relaxing slot rules, governments must also consider other forms of emergency relief," Schvartzman also said in Friday's statement.   

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