Grandfather rights refers to the situation where an airline's historical dominance at an airport has become institutionalised in the rules governing that airport.
The classic example is the contentious issue of 'slots': these are the slices of time allocated to each airline for its planes to use the runways for take-off or landing operations. These slots were originally allocated to airlines through administrative processes. As international air travel has expended over the years, these slots have become increasingly seen as key assets for airlines in their control of their home airports. This has resulted in airlines buying these slots from each other.
There are two criticisms of this practice. First is that the airlines don't own these slots, so the airport operator should manage the allocation these slots, perhaps by open auction. The second is that airlines are accused of being selective in who they allow to buy slots from them, to prevent potential rivals gaining access to useful slots.
Forcing airlines to relinquish slots (especially those at convenient times of day) has recently become a condition of merger and alliance activities. When British Airways sought a closer relationship with American Airlines in 2002, the regulators' requirement that they give up 224 slots at Heathrow proved too high a price for the airlines.
