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Rediff News  All News  » Business » Low-cost airlines may get more peak-time slots in metros

Low-cost airlines may get more peak-time slots in metros

January 12, 2009 10:40 IST

Low-cost carriers may soon pull a large number of corporate customers away from the full-service carriers.

The civil aviation ministry and the directorate general of civil aviation plan to award the low-cost carriers some key morning and evening peak-time slots (a fixed time for departure or arrival of a particular flight) lying unused with the full-service carriers at metro airports like Delhi and Mumbai.

DGCA officials and airline officials confirm that airlines like Jet and Kingfisher are not using around 10 per cent of their slots during the peak periods.

Slots are given to airlines for all airports collectively and on a six-month basis (summer and winter schedules). Each airline puts in its request for slots, which are then decided by the DGCA, civil aviation ministry and the airport operator.

The award of slots usually follows a historical trend wherein an airline retains the slots it had operated in the previous schedule.

Both Delhi and Mumbai handle 550 flight movements each daily, with around 140-160 prime-time departure slots and an equal number of arrival slots.

A low-cost airline executive also said that airport executives of both Mumbai and Delhi airports had unofficially informed them that there were slots in both airports that were lying unused.

Ajay Singh, director in SpiceJet, a low-cost carrier, said: "We have decided not to downsize and are adding flights. There are unused slots available in prime time, when corporate travellers go, which we have asked the government to give."

"This has become a practice of late when the airlines combine a lot of flights during the day. If an airline has around five flights in two hours, it usually combines the flights and cut them to three. Since this is a regular practice, we might give some of the slots to other deserving airlines like IndiGo and SpiceJet who have asked for them," said a civil aviation ministry official.

Industry experts say around 80 per cent of the domestic corporate travellers in the country are mostly carried by full-service airlines like Jet Airways and Kingfisher or their low-cost affiliates.

For instance, in the Bangalore-Chennai sector, the KFA-KF Red combine operates six out of the nine flights in the key prime-time slots of 6 am-9 am and 6 pm-9 pm.

Similarly, the combine operates around 7 out of around 13 flights in the key morning and evening slots in the Bangalore-Hyderabad sector.

Similarly, in the Mumbai-Delhi sector, which is the single largest revenue generating sector in the country, the Jet-JetLite combine controls almost 35-40 per cent of the prime-time slots.

"This move will add a significant amounts to the corporate traveller base of the low-cost carriers. And this in turn will enable them to raise their ticket prices and not pull them back for the leisure traveller," said Keyur Joshi, COO of travel portal Makemytrip.

While corporate travellers account for around 30 to 40 per cent of a low-cost carrier's total customer base, they account for around 60 per cent of the total customer base of a full-service carrier.

The revenue chunk from corporate travellers would be more than 75 per cent for full-service carriers since that includes business and first-class fares as well as corporate travel contracts with companies.

The award of unused or under-used slots will be a boon for the low-cost carriers especially in an airport like Mumbai which has paucity of slots.

"While getting additional slots is easier at the Delhi airport now with the opening of the third runway, it is impossible at the Mumbai airport. If we get some existing unused slots at the Mumbai airport, it would mean much higher loads for us," said a low-cost carrier executive.

The Mumbai airport did not allot any additional slot last year. Sources said that with the land constraint which the airport is facing, no airline should expect additional slots for the coming summer schedule either.

Jet Airways already has more than 80 daily departures out of Mumbai while Kingfisher has more than 60.

Giving away unused slots to more deserving carriers would also be good news for airport developers at a time when their passenger and airport charges have taken a hit due to declining air passenger traffic.

"Unused flight slots lead to lower revenue for us. We would want flight slots to be operated by an airline that can make more efficient use of them through better capacity management. We would also prefer more slots operated by regular narrow-bodied aircraft like the A320 rather than turboprops," said a spokesperson of Mumbai International Airport Ltd, the GVK-led consortium that currently operates the Mumbai airport.

Anirban Chowdhury in New Delhi