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I don’t think you understand the problems associated with the “just sell the slots” idea. The problem is that big airlines could buy up slots and then not use t
by qubex 7y ago
I don’t think you understand the problems associated with the “just sell the slots” idea. The problem is that big airlines could buy up slots and then not use them. They wouldn’t necessarily have an incentive to sell them, either, because the buyers could be small, regional, or low-cost companies that could leverage them to build up a small but profitable business and later take on the bigger airlines (as happened with Europe’s budget airlines, most notably EasyJet and Ryanair).
- yardstick 7y agoThe op addressed this issue with their comment about selling 1-5 year leases.
- sho 7y agoThat didn't address the issue at all. They would just buy the leases and keep the competition out that way; no difference.
- barry-cotter 7y agoThat means one of two things; the slots aren’t worth that much or they were sold for less than they were worth. If they’re almost worthless, as not using them suggests their not being used is no great loss. If they are worthwhile then either they’ll be used, someone else will buy them or the owner is setting money on fire by not using a valuable asset, in much the same way as someone who uses a vacant lot in Manhattan as a planning lot instead of building a skyscraper on it. If you want a slot to go to its most valuable use sell it to the entity that values it most, whether permanently or by auctioning it yearly.
- Talanes 7y agoIf you're an established player, keeping essential assets out of the hands of new competition has value in itself. Example: when the Vons and Kmart from my hometown got together and opened a new shopping complex together, they both retained their prior leases for years, knowing that those locations were the only real estate in town large enough to house a real competitor. The fact that neither could utilize that real estate didn't make it worthless, and in this case actually made it more valuable to them: the town couldn't support multiple large retailers simultaneously, so any competition ran the risk of putting them out of business. The same concept easily applies to airline slots, an established player that is at capacity on how many slots they can profitably use still has some incentive to keep other airlines out, because any new players will be tapping into their existing market.
- m000 7y agoThe objective is not fairness among companies. The objective is to keep the market competitive for the benefit of the consumers. If you can afford a 5 year lease on a slot you won't actively use, you're still stifling the competition. And since EU prohibits EU-governments to subsidy airlines, this paves the way for non-EU countries with deep pockets to eventually control the EU air travel market.
- germanier 7y agoAs we see here demanding utilization just increases the price of squatting. The same effect could be had without demanding burning fuel.
- barry-cotter 7y ago“Big“ airlines buying up slots and not using them is a non-problem. Most airlines go bust over thirty years because the entire industry is so awful to be in. Flying busses don’t have that much better profit margin than the kind on the roads and the customers shop almost solely on price. That’s why Delta, Pan Am etc. are in and out of Chapter 11 or actual bankruptcy. You think companies in those kinds of financial straits won’t sell assets they’re not using, like slots?
- tuesday20 7y agoI don’t understand this. Can’t we put rules in place to prevent this? How hard can it be to take the slots back from the big airlines if they are not using them?
- sfj 7y agoHence, the problem with empty planes being flown around.
- dukoid 7y agoThis is exactly why they HAVE to use them, but in the current situation it doesn't make sense.
- reaperducer 7y agoHow hard can it be to take the slots back from the big airlines if they are not using them? The airlines bought them. They're property. Just like the car dealer can't take your car back if you're not using it.
- htfu 7y agoWhat does this even mean? Of course they could if the law said so, which is what the GP is asking.
- 7y ago
- reaperducer 7y agoThe problem is that big airlines could buy up slots and then not use them. The big airlines already do that. It's why the smaller airlines are forced into the smaller, outlying airports.
- Ankaios 7y agoTo deal with no-show airlines, I'd be (darkly) amused if airports sold somewhat more slots than their gates could physically accommodate.
- anticensor 7y agoHow would you time the excess time slots?
- fatbird 7y agoFive pilots lined up. "Ok, we're offering a $300 voucher to the airline willing to give up this slot... $300... ok, United, we're bumping you, you can pick up your voucher at the information desk."
- dehrmann 7y agoAmerican Airlines pushed United out of JFK for competitive reasons. Scott Kirby, president of United, but formerly of American: > You can probably personally blame me, at least to some degree, for the fact that United pulled out. When I was at American Airlines, we were consciously trying to push United out of JFK. That was our goal. Once you give up those slots at an airport like JFK, good luck getting them back.