[Anirudh Iyer and Arnav Kaushik are 3rd-year B.A.LL.B(Hons) students at RMLNLU, Lucknow]
In the aftermath of IndiGo’s large-scale flight cancellations in December 2025, the Directorate General of Civil Aviation (DGCA) mandated the surrender of 10 per cent routes from the winter schedule of India’s largest airline. To reassign these empty slots, the Ministry of Civil Aviation formed a Coordination Committee that would work with other airlines on the reallocation process.
While these actions were aimed at increasing capacity at congested airports, the lack of interest from other airlines in claiming the vacated slots highlighted deeper issues in the system. Industry experts noted that the surrendered slots were primarily limited to unremunerative overnight, late-night, or early morning flights (known as red-eye flights) or isolated frequencies on routes where IndiGo otherwise retained dominant capacity, rendering them operationally and economically insignificant for competing carriers.
The aim of this post is not to criticise IndiGo’s selective compliance, but rather to address a broader structural problem: understanding India’s difficulties with slot allocation by examining the international slot allocation framework within which it operates.
Understanding Slot Allocation
On 1 August 2025, the fourth edition of the Worldwide Airport Slot Guidelines (WASG) came into effect. The WASG, a joint publication of Airports Council International (ACI), the International Air Transport Association (IATA), and the Worldwide Airport Coordinators Group (WWACG), is widely regarded as the global benchmark for airport coordination. To support the said coordination, the guidelines classify airports into three levels. Level 1 airports have sufficient infrastructure to meet demand at all times. Level 2 airports may experience intermittent congestion and, therefore, require a facilitator. Level 3 airports face demand that exceeds their capacity due to internal or external factors, and consequently, an independent slot coordinator is appointed to allocate slots to airlines and other aircraft operators.
Clause 1.6.1 of the WASG defines an airport slot (or “slot”) as a permission granted by a coordinator for a planned operation to use the full range of airport infrastructure necessary to arrive or depart at a Level 3 airport on a specified date and time. Slot allocation is governed by a set of principles, of which two are most commonly applied: the historic precedent (commonly known as grandfather rights) and the use-it-or-lose-it rule.
Grandfather Rights
Grandfather rights are the single greatest barrier to new entrants seeking to start or expand services at Level 3 airports. Under these rights, slots awarded to an airline in one season are reassigned to the same operator for the subsequent season, provided the operator satisfies prescribed utilisation thresholds. Since this mechanism governs the allocation of the vast majority of slots, especially during peak periods, it effectively allows incumbent carriers to retain slots indefinitely.
Use-It-Or-Lose-It Rule
This rule requires an operator to have utilised a slot for at least 80% of the previous season to retain it for the next equivalent season; if an operator fails to meet that threshold, the slot is returned to the pool for reallocation. Only after these historic slots are reassigned are 50% of the remaining slots made available to new airlines, in accordance with the ‘new entrant rule’.
Closely modelled on the WASG, the Ministry of Civil Aviation (MoCA) Guidelines for Slot Allocation, 2013 are India’s answer to airport coordination. The Guidelines adopt the same congestion-based classification of airports and rely heavily on the principle of historic precedence, subject to the “use-it-or-lose-it” requirement of minimum slot utilisation. Take the example of Go First in 2024, where sustained non-operation for over a year resulted in the loss of historic precedence and the redistribution of its domestic slots to other airlines in accordance with the 80 per cent slot adherence norm. The Coordination Committee set up in the IndiGo case also finds its inception in these guidelines.
New Entrants, Old Barriers?
Under the current slot allocation regime, a new airline can obtain slots in two limited ways: first, through the creation of additional slots when a new runway opens, or airport capacity is increased; and second, through the voluntary return of historic slots by incumbent carriers or the withdrawal of those slots by the coordinator on failure to satisfy the use-it-or-lose-it threshold. In practice, however, withdrawn slots account for less than two per cent of the pool at many of the most congested hub airports. At the same time, expanding infrastructure is often impractical due to funding constraints, limited land availability, and environmental considerations. For these reasons, allocating slots at congested airports in a neutral, transparent, and non-discriminatory manner assumes heightened importance to ensure optimal use of airport capacity.
In addition, these formidable barriers to new entrants are compounded by incumbent airlines’ tactics that exploit slot allocation rules. Such practices include operating smaller aircraft to distribute capacity across slots, imposing higher passenger fares and cargo rates due to reduced market contestability, and strategically hoarding dormant historic slots at congested airports through leasing arrangements known as slot “babysitting”. For instance, to meet the 80% utilisation threshold for its valuable Heathrow slots, Etihad entered into a babysitting agreement with Air Serbia in 2019. Under the said arrangement, Air Serbia operated “ghost flights” on Etihad’s Heathrow slots to ensure utilisation, following the collapse of Jet Airways in early 2019.
Cries of the Underdeveloped
The concerns arising from the current slot allocation framework have resonated beyond national borders. Notably, at the 42nd Session of the International Civil Aviation Organisation (ICAO), India urged amendments to the global slot regime, citing discriminatory practices that impede carriers from developing countries and limit fair access to slots at congested European airports. Further to that, India also submitted a working paper criticising the grandfather rights system as inconsistent with the principle of “equal opportunity” under Article 44(f) of the Chicago Convention.
India noted that 92% of the slots allocated at Heathrow airport are based on grandfather rights, resulting in a fundamentally anti-competitive outcome. This situation is further aggravated by the concentration of slots among incumbent carriers, with British Airways holding 50% of those slots, while airlines from Asia and the Middle East hold only a meagre share. As a consequence, Indian carriers are largely restricted to secondary airports in London, whereas UK carriers such as British Airways retain premium Heathrow slots, thereby creating an unequal playing field.
Secondary Trading: A Possible Mitigator or Aggravator?
The difficulty of obtaining slots at Level 3 airports through primary allocation drives new entrants to seek alternative routes, such as secondary trading, i.e., the movement of slots between airlines without returning them to the pool. The WASG contemplate slot mobility and recognise several forms of secondary trading, including slot transfer, swapping and shared operations. However, the lack of clear policies and regulations impedes the systematic movement of slots between carriers and creates further obstacles for new entrants, such as market concentration.
Strikingly, the WASG do not explicitly permit or prohibit compensated slot trading and instead provides that such transactions may occur only where they are “not prohibited by the laws of the relevant country”. This ambiguity regarding the legality of secondary trading has resulted in varying interpretations across jurisdictions. For instance, the UK High Court effectively sanctioned secondary trading by approving a slot transfer between British Airways and KLM; on the other hand, the MoCA Guidelines for Slot Allocation remain completely silent on its legitimacy in India. With no global formal oversight, secondary trading has reduced transparency in the allocation system.
The IATA and the other joint publishers should establish a clear legislative framework for secondary slot trading within the WASG, providing transparent and fair rules for all parties. Secondly, a compulsory public register should be maintained for each Level 3 airport to record slot holdings and related information. In addition, mandatory trading platforms should be established to facilitate the secondary trading under the supervision of the coordinators. Thirdly, independent regulatory bodies should be set up to oversee the trade of slots, operating in collaboration with relevant antitrust authorities. Accordingly, a threshold for secondary trade should be introduced so that transactions above that level trigger an antitrust review to prevent any single airline from accumulating market power.
Way Forward
Secondary trading cannot, by itself, resolve the imbalance. Market-based transfers would only shift capacity among established players; the reassessment of grandfather rights remains crucial. Raising the current utilisation threshold from 80% to 90% or higher, or making renewal dependent on stricter performance metrics, could create a better balance. Likewise, implementing charge-based deterrents could discourage strategic underutilisation or hoarding of slots, associating financial incentives with effective use. Lastly, requiring the regular surrender of a specific percentage of historic slots would slowly replenish the common pool and reduce perpetual entitlement. At a local level, slots should be further categorised by value and impact to avoid another Indigo debacle, where a dominant carrier surrenders only low-demand slots. Implementing these reforms would gradually lead to a shift towards greater fairness and activity.
India’s difficulties are but the result of the structural limitations of a coordination framework that privileges historic entitlement while simultaneously invoking principles of equal opportunity. Unless a balance is achieved between operational fluidity and competitive access at an international level, slot allocation disputes are unlikely to be one-offs.
– Anirudh Iyer & Arnav Kaushik