FAA Proposes Extending Slot Waivers Through March 2022

The Federal Aviation Administration (FAA) has proposed extending slot waivers due to the ongoing crisis through March 26th, 2022. The existing slot waivers are set to expire on October 30th, 2021. If not extended, it would reinstate requirements for airlines to use their slots a majority of the time to be able to keep them. In addition, there is some relief at airports where the FAA does not impose slot controls. This would also be extended into 2022. Here’s what this could mean for air travel.

FAA proposes slot waiver extension

The Federal Aviation Administration (FAA) has proposed to extend slot waivers through March 26th, 2022, at three US airports: John F. Kennedy International Airport (JFK) and LaGuardia Airport (LGA) in New York and Ronald Reagan Washington National Airport (DCA) serving Washington D.C.

There is also relief in place for designated International Air Transport Association (IATA) Level 2 airports in the US. This includes Chicago O’Hare International Airport (ORD), Newark Liberty International Airport (EWR), Los Angeles International Airport (LAX), and San Francisco International Airport (SFO). There are no specific slots for airlines at these airports, but instead approved maximum operations in a given period of time and required schedule coordination between airlines and the airport to minimize delays. Newark, in particular, has proven to be contentious in this regard.

There are some restrictions, however. The broad waivers are available for international operations, given that international long-haul travel has been choppy to return. However, when it comes to US airlines, the agency intends to make relief available for winter operations that would have flown in Winter 2021/2022 but are not because of the pandemic. Essentially, the waivers for domestic carriers would cover a scale comparable to pre-crisis levels of international service. With domestic travel rebounding strong and a robust vaccination campaign continuing, the FAA no longer believes an extension of domestic slot waivers is warranted.

The slot waivers

DCA, JFK, and LGA are all governed by “use it or lose it” slot rules. Any slot at each airport must be used at least 80% of the time at JFK and LGA, or else an airline risks losing that slot. Slots not used at least 80% of the time over a two-month period will be recalled at DCA. At both airports, the FAA reserves the right to change those requirements in the case of extenuating circumstances, like the current crisis.

The slot waivers first went into effect on March 16th, 2020, when the world started to shut down. Since then, the FAA has extended the waivers in accordance with the ongoing situation. Without the winter extension, slot relief is set to expire in October. The global health crisis has continued to unfold and wreak havoc on airlines, given the massive number of travel restrictions.

While vaccinations have been ongoing, not every country has rolled them out at the same pace. In addition, significant international travel restrictions are still in effect, barring travel for most Americans to major destinations, including China. Even where long-haul travel has reopened, some restrictions, such as testing mandates, quarantines, and vaccination requirements, have limited the number of travelers getting onboard aircraft and flying over an ocean.

Nine petitions were presented to the FAA for extending slot relief through the winter 2021/2022 season. This included IATA, Avianca Airlines, All Nippon Airways (ANA), Lufthansa Group, and Airlines for America (A4A). Three petitioners, including JetBlue, Southwest, and Airports Council International-North America (ACI-NA), have opposed further slot relief.

The FAA has attempted to draw a compromise between the two petitions by granting relief for international operations but requiring domestically-used slots to come back as domestic travel has come roaring back.

What impact will this have on air travel?

Expect foreign carriers to continue operating limited flight schedules to these significant airports with suppressed travel demand. Aside from Thanksgiving and Christmas holiday seasons, the end of the third quarter and fourth quarter are otherwise quiet months for travel structurally with schools back in session, which is a headwind coupled with the pandemic and related travel restrictions. Without the return of long-haul business travel, this further limits the potential for foreign airlines to bring their flights back.

There is some evidence that US airlines are getting ready to ramp up their domestic operations to preserve their slots. For example, before the relief was announced, United Airlines had indicated it planned a significant Newark ramp-up to its pre-crisis levels of over 400 departures a day, including to international destinations.

Another example includes a route suspended during the crisis, but that is coming back from November. American Airlines, for example, has scheduled the return of up to six daily flights between Baltimore/Washington International Thurgood Marshall Airport (BWI) and JFK. This route is not currently in operation but represents schedules that airlines are putting forth to protect their slots.

While airlines do have to utilize their domestic slots, they can shift them around. For example, in the future, American can utilize some of their slots currently in use flying to Baltimore and repurpose them to launch new routes or beef up others. However, it cannot do so if it loses the slots, hence why it will operate a decent number of daily flights on this route that it does not currently fly.

The slot waivers could push airlines to consider new domestic routes from these airports. Given that most airlines are moving away from all-economy 50-seater operations that previously flew some of these routes, like from Baltimore to New York, this and the lack of slot waivers could be the impetus needed to launch new domestic routes from New York and DC airports.

However, some of the structural factors dragging down the return of international long-haul operations are also playing out domestically. For example, business travel is still relatively down in the United States, though it is performing better domestically than internationally. Typically, in the fall, this leads to a reorientation away from some of the more seasonal leisure routes toward more flying that supports business travelers. This year, things are not quite back to pre-crisis levels, but they are also not bad enough to warrant a complete network reorientation to lower yield leisure markets.

Do you think the FAA is making the right step by proposing slot waiver extensions through the winter 2021/2022 season? Let us know in the comments!

Source: https://simpleflying.com/faa-slot-waiver-extension/