Tuesday, 4 August 2020

Wizz Air warns of slot fraud at London Gatwick and calls for an end to waiver of use-it-or-lose-it rules

The budget airline Wizz Air has condemned what it calls Slot Fraud at London Gatwick Airport. The airline that hates anyone who has ever travelled business class and believes moving more people is more environmentally sustainable claims that £1.5 billion worth of slot pairs at Gatwick are being blocked for shrinking 'tax-payer funded' airlines.

 In its latest attack, the carrier says, 'at Gatwick Airport, incumbent airlines have publicly stated that they believe that it could take years until their levels of demand return to normal and that they will scale back their operations at, or withdraw from, the airport entirely. Yet they seek to retain slots that they have no intention of operating in the near future but object to the entry of new airlines – this is nothing more than anti-competitive slot-blocking.  A significant proportion of the slots at Gatwick Airport, which in total are worth some  £1.5 billion ** are currently being blocked by airlines which have received tax-payer loans, but continue to contract.'  

The airline is advising that slot-blocking will hit local communities hard, with around 750 jobs being directly or indirectly supported by every million passengers at an airport.  With an estimated 18% of the local Crawley workforce being employed in aviation or aviation support, failure to operate airport capacity will mean fewer local jobs, leaving the UK government and taxpayer to fund unemployment benefit and other special financial assistance.'  

József Váradi, CEO of Wizz Air Group said: “I call on the European Commission to end the 80-20 slot waiver regulation for all airlines in Europe as of 25 October 2020 and support the recovery of the aviation sector, associated industries and national economies by allowing genuine market conditions to prevail. 

The calls to prolong the slot waiver until March 2021 are against free competition and protect incumbent airlines with weak business models while airlines like Wizz Air are ready to take up new market opportunities and provide even more low fare opportunities for their passengers and essential connectivity for countries.  Even more so than the irrational amounts of state aid given to airlines who have manged themselves into a financial position with no resilience, slot blocking is a fraud against the tax payer as well as the travelling public.”

The irony is that Wizz Air is in such a strong position at the moment, thanks in part to an almost interest-free loan from the UK government of £300 million, so attacking other airlines that have taken government funding, which Wizz also has, might smell a little like hypocrisy to some. 

** Pre-COVID 19 valuation

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