Who Really Decides When Aeroplanes Fly?

Look at a flight tracker for London Heathrow on any given morning, and you'll notice something odd if you stare long enough. The same handful of airlines occupy the same prized early-morning departure times, year after year, decade after decade. British Airways has flown out of roughly the same slots for so long that industry analysts talk about them the way estate agents talk about a house that's never changed hands.

New entrants, however well-funded, however popular the route, tend to be pushed to the edges of the day. Late morning. Early afternoon. The kind of departure time that turns a business trip into an overnight one.

These airlines simply pay more for the privilege, or so the story goes. Bigger budget, better slot. Simple enough. Except for one thing.

Nobody owns a landing slot

Not the airline using it, not the airport it belongs to, and not even the government that regulates it. A slot is permission to use a runway for roughly ninety seconds at a specific time, and at congested airports, that permission isn't legally defined as property. No deed exists. No title changes hands in the legal sense.

And yet in 2016, Air France-KLM reportedly sold a single Heathrow slot pair to Oman Air for $75 million, still the highest publicly reported slot trade on record. The year before, Scandinavian Airlines sold a pair to American Airlines for $60 million. Virgin Atlantic once used its Heathrow slots as collateral on a £220 million bond to help pay for new aircraft, the kind of thing you can only do with an asset a bank is willing to recognise, even when the law technically doesn't.

Something that isn't property is being bought, sold, and mortgaged like property, and nobody involved in those deals is pretending otherwise.

How a decision from 1978 still runs the departures board

The system airlines operate under today traces back to the aftermath of the Airline Deregulation Act of 1978, when the US government stopped setting airline routes and fares, so airports suddenly had to figure out, on their own, who got to land where and when.

The Civil Aeronautics Board brought in a trio of Caltech economists, David Grether, Mark Isaac, and Charles Plott, to study how the existing scheduling committees were making these decisions. What they found was rooms full of airline representatives voting, by unanimous consent, on divvying up a limited number of landing times among themselves. The people competing for the resource were the same people deciding who got it.

The use-it-or-lose-it rule

That committee-based approach never fully went away. What replaced it, in various forms around the world, is a rule known as grandfather rights. If an airline used a slot during the last equivalent season, generally at least 80% of the time, it keeps the right to use that same slot again. Miss the threshold, and the slot goes back into the pool. Hit it, and the slot is effectively yours indefinitely, passed down inside the airline's schedule the way a family passes down a precious heirloom.

Because the use-it-or-lose-it rule guarantees that an airline can keep a slot indefinitely if it operates reliably, the permanence of the privilege turns into a de facto asset.

Heathrow shows what that pressure looks like at full scale. The airport is capped at roughly 10,500 takeoffs and landings a week, and recent industry analysis puts supply at only around 90% of recorded demand, before even counting airlines that don't bother applying because they already know the answer.

Supply covering 90% of demand sounds close. It isn't, at this volume. Across Heathrow's roughly 10,500 weekly movements, that gap adds up to tens of thousands of unmet slot requests a year, which is why so few slots ever get handed back to the pool voluntarily, and why the rare ones that do change hands sell for tens of millions.

Next time you're comparing flights to a major hub and notice the same two or three airlines dominate every convenient departure time, that's inherited scheduling: a predecessor airline used that exact time slot enough seasons in a row, sometime in the 1980s or 1990s, that it became theirs in every sense except the legal one.

Economists have been saying this is a bad idea for decades

Economists have argued since the earliest slot-auction proposals of the late 1970s and early 1980s that grandfather rights are an inefficient way to allocate something this scarce. Auctions, the reasoning goes, would let the airlines that value a slot most highly pay for it directly and let the market sort out who deserves the 7 a.m. departure.

Transport economist Gernot Sieg modelled this formally in a widely cited 2010 paper and found that airports themselves generally prefer the current use-it-or-lose-it system over full property rights, because it keeps airlines flying even when demand softens.

That's one of the reasons why grandfather rights have survived so long, beyond plain inertia: airports get a guarantee of activity. Incumbent airlines get to keep what they already hold without bidding against anyone for it. The one group with a strong incentive to introduce an auction (new entrants and smaller carriers who could use the competition) has the least influence over whether the rule ever changes.

The clearest sign that slots function as an asset, whatever the law says, is that banks will lend against them. A bank does not put £220 million behind something it can't eventually seize and sell if a loan goes unpaid. Somewhere between the regulator's position that a slot is not property and the finance industry's willingness to treat it exactly like property, everyone settled on a workaround that keeps both sides technically correct.

Why airlines sometimes fly planes nobody booked

Under grandfather rights, keeping a decades-old departure time can be worth more to an airline than the empty seats cost to fly.

Airlines don't set out to fly empty aeroplanes, of course, but scarce things have a habit of creating strange incentives. A seven o'clock departure is valuable enough that people have spent decades building entire systems around protecting it.

During the pandemic, when passenger numbers collapsed almost overnight, regulators temporarily relaxed slot usage rules because, without the waivers, airlines had a powerful incentive to keep flying aircraft that nobody particularly needed.

Lufthansa's chief executive, Carsten Spohr, said the airline would have to fly roughly 18,000 extra, largely empty flights over a single winter, specifically to stay above the usage threshold and keep its slots. Greenpeace separately counted more than 10,000 of these near-empty ghost flights crossing European airspace that same winter. When journalists asked the European Commission about it directly, the response was that it had seen no evidence that any of this was happening.

The threshold has since climbed back to its full 80 percent, and the most recent update to the global slot rulebook, published by IATA in 2025, revised parts of the usage requirements again. The trade-off that produced ghost flights during a pandemic is still sitting inside the system, waiting for the next shock that makes it worth testing again.

It's tempting to read ghost flights as a story about airlines not caring. The more likely reasoning is that a regulator works from aggregate booking data, not cabin headcounts, and therefore can't police something that is not structurally obvious.

A resource doesn't need a title deed to behave like an asset

It just needs enough people (airlines, banks, regulators, buyers, sellers) to agree to treat it that way, consistently, for long enough that the absence of a formal property right stops mattering in practice. Because an asset is defined by its ability to generate economic value, utility, or cash flow, legal ownership documents, such as a title deed, are simply administrative tools to prove ownership, not prerequisites for economic behaviour.

This phenomenon appears everywhere scarcity meets bureaucracy, such as taxi medallions in cities that still issue them and commercial fishing quotas that have been passed down within family operations for generations. Some broadcast spectrum licences trace their current holder back to an allocation decision made before the internet existed.

In each case, the government insists it still holds ultimate authority over the resource, and in each case, the market has built a lending and trading system on top of an asset that, on paper, isn't supposed to be one.

The next time you're waiting at an airport, looking up at the departures board, consider that what you're seeing is regulation, economics, and history, all occupying the same screen. Airports are full of invisible systems hiding in plain sight. This happens to be one of the more expensive ones.

THE BIG IDEA

A landing slot has never been property in any legal sense, and it has never needed to be. All it took was enough banks, airlines, and regulators agreeing to act as though it were for long enough that reversing course became more disruptive than keeping the arrangement going. The 80 percent rule didn't just decide who flies when, but who gets to own something the law says nobody can own.

Pay close attention the next time you're in an airport

When you see a flight search that shows the same two or three airlines holding the best departure times out of a particular airport, look up when that airline first started flying the route. There's a decent chance the answer is decades ago, and the schedule has barely moved since.