Virgin CEO Hrdlicka wants ‘flexibility’ in airport slots

“It’s adding a lot of complexity as we move through these ups and downs in renormalising as an industry,” she said.

“We’re having to make sure that we can hang on to our slots but also manage the ups and downs associated with absenteeism and higher attrition levels and weather patterns and all sorts of things, which are making a little bit more difficult to get back to normal.

“So it’s working OK, you know, we would hope for continued flexibility for a little while because we’re just not back in a normalised period yet, but the slot programs are behaving as if we are.”

Airport slots have come into focus this week, particularly at Sydney Airport, with the ACCC saying larger carriers like Qantas and Virgin are able to “exploit” the current rules around take-off slots to stop smaller carriers from competing with them at peak times – a stance Sydney Airport itself has agreed with.

A slot is a literal time slot that allows an airline to take off at a specific airport at a particular time. The rules state that if an airline holds a slot, it can keep it to itself, but only if the business uses it for 80 per cent of the time.

Those rules were hugely relaxed during COVID-19 as lockdowns and border closures caused hundreds of cancellations, but have also been criticised by both Rex and Bonza as stifling their ability to run services at the most popular times.

Rex in particular has accused Qantas of “hoarding” prime slots at Sydney Airport and leaving smaller carriers with the “crumbs” of less popular times, while Bonza CEO Tim Jordan has labelled Sydney Airport’s slot system as the “biggest singular issue” facing Australia’s domestic aviation market.

In the IATA interview, Hrdlicka also alluded to the difficulties Virgin has been experiencing with deliveries of new aircraft such as its delayed Boeing 737 MAX 8s, saying supply chain problems are a “fundamental problem” for Virgin.

“We’re depending on new aircraft coming in, it’s taking longer than we expected. There are issues with equipment and parts. And that’s changing the cycle of engine times. And there are a cascade of things which are as a result of aircraft not flying for a long period of time, and supply chain has been shut down, effectively,” she said.

“So it’s a big deal for us. We’re all just working together as best we can. Because together, we’ll get through this and recreate the delicate balance that we enjoyed pre-pandemic in the way our supply chain works across the industry.”