Slot rules review for new airports urged

September 25, 2018

Government is urged to decide whether to maintain the current system of allocating airport slots or come up with a new one that takes into account the projected competitive environment.

In a public forum of Philippine Competition Commission (PCC) Monday, the anti-trust body’s consultant Gilberto Llanto said if the slot allocation model used at the Ninoy Aquino International Airport (NAIA) is imposed on new airports, existing airlines will have an edge over the new entrants.

The review of slot allocation guidelines is part of recommendations of the study on the competitiveness landscape of domestic air transport industry done by Llanto, the former president of the government think-tank Philippine Institute for Development Studies.

NAIA’s slot allocation system follows the International Air Transport Association’s (IATA) standard.

IATA defines airport slot as a permission given by a coordinator for a planned operation to use the full range of airport infrastructure necessary to arrive or depart at Level 3 airport on a specific date and time. Level 3 airports are those that have high volume demand that exceeds the capacity.

A historic or “grandfather rights” is also applied in this system, where the slot is granted to those with series of slots that was operated at least 80 percent of the time during the period allocated in the previous equivalent season, according to IATA. “Is slot banking or hoarding being practiced in NAIA? The answer is no. But some people told us there are ways to get around it,” Llanto said.

But for the upcoming airports, he urged the government to look into the potential anti-competitive effects of this scheme. “The question is, do we support the continuation of grandfather rights, historic rights for the basis of slot allocation?” Llanto said.