With the future of Alitalia hanging by a thread, rival airlines are eyeing its sought-after take-off and landing rights.
The allocation of slots, the lifeblood of many airlines, has evolved into a multi-million dollar business with soaring prices. It is a largely secretive system bound by rules for which even airlines are unable to agree a common interpretation.
Here are some details:
-- What is a slot?
The right to land or take off on a specific day and time and to use airport infrastructure needed to operate flights.
-- Which airports operate a slot system?
Airports designated as "coordinated" airports: in practice the most congested. 140 airports worldwide ration flights.
-- Exemptions to the slot system
State flights, emergency landings, humanitarian flights.
-- Who allocates the slots?
Under European Union rules, each country appoints an independent coordinator. It must be impartial, though critics sometimes complain that local airlines get preference.
-- How often are the slots re-allocated?
Under the existing scheme, slots are allocated free of charge from a pool of available slots twice a year; in October for the summer schedule and in May for the winter schedule.
-- How are the slots distributed?
* The airline user must have a valid operating license. Italy has threatened to withdraw Alitalia's permit next week.
* The system works first and foremost on historical precedence or the GRANDFATHER RULE: this year's slots can be kept next year. Slots can be fine-tuned without losing them.
Critics say such historical rights are unhealthy because they deprive new entrants of capacity and remove the incentive for established operators to release unwanted slots.
Most airlines respond that the system creates stability and allows newcomers to become "grandfathered" in just two seasons.
* Slots which are used less than 80 percent of the time must be returned to the available "slot pool" (USE-IT-OR-LOSE-IT).
Critics say this encourages a process of hoarding known as "slot-sitting," for example by operating small planes at a loss.
* In the European Union, up to 50 percent of newly created slots are reserved for new entrants.
-- What happens when no slots are available?
Airlines can exchange slots at a twice-yearly schedules conference, an air transport market at which more than 900 airlines try to maximize the efficiency of their portfolios.
In Britain, airlines can also buy or sell slots on an ad hoc basis in a secondary "grey market". Slot trading was first developed for the domestic market in the United States.
The value of slots varies according to time of day and other constraints and has been rising due to deregulation.
After last year's Open Skies pact freeing up transatlantic travel, Continental paid a record USD$209 million for four pairs of slots at London Heathrow. Compare with GBP20 million pounds (then worth some USD$38 million) paid for 2 pairs by Qantas in 2004.
Alitalia currently has 68 pairs of summer slots at London Heathrow, equivalent to an average of 10 daily services.
Volume is thin, however, with barely one percent of scarce Heathrow slots being traded annually, according to a study by SEO Economic Research, which is linked to Amsterdam University.
Experts suspect trading happens elsewhere in Europe too, but a legal blur has discouraged airlines from acknowledging this.
-- Towards European trading?
To clear up legal doubts preventing trading, the European Commission ruled this year that secondary slot trading was legal and could be used across the trade bloc to boost competition.
Airports say trading does not go far enough and want slots to be auctioned, eyeing revenue. Governments are split on the issue, says an official EU study by consultants Mott MacDonald.
For the airlines, lobby group IATA argues pricing mechanisms are ineffective and would mess up the global traffic system.
