Wdleiser From United States, joined Apr 2004, 904 posts, RR: 5 Posted (3 years 8 months 1 week 6 days 13 hours ago) and read 1394 times:
Hey all A.netters.
Today in English class we are beginning a research project. I chose to argue about the Bermuda II treaty, I need both pros and cons about it being kept and it being abolished.
I also need information about what each side wants in return for the treaty to be abolished.
Any thoughtful information and informative posts are welcomed. Both sides are welcomed too, whether you are for keeping it or against keeping the treaty.
BCAL From United Kingdom, joined Jun 2004, 3378 posts, RR: 29 Reply 1, posted (3 years 8 months 1 week 6 days 11 hours ago) and read 1345 times:
A Google search will bring up in seconds thousands of papers that will give you some information in partcular this link should give you some pros and cons.
MOL on SRB's latest attack at BA: "It's like a little Chihuahua barking at a dying Labrador. Nobody cares."
Its anticompetitive
It restricts consumer choice
It leads to higher airfare prices out of LHR
It creates a monopoly for for BA/VS/UA/AA
My thoughts exactly. I wonder though, why the hell didn't the EU speak out against Bermuda II? The EU is all for competition and all that Bermuda II does is the total opposite.
Quoting Humberside (Reply 3): Hopefully a resolution will be found and Bermuda 2 scrapped. But it will take time
Indeed it will take time. What LHR needs is a more flexible runway handling and maybe a third runway to increase the capacity for more landings and departures, but I guess this will happen after T5 is open at the earliest.
Zu fettigem Käse und kalorienreicher Kunstmarmelade, nehme ich einen Doppelkorn.
VV701 From United Kingdom, joined Aug 2005, 3792 posts, RR: 20 Reply 5, posted (3 years 8 months 1 week 6 days 5 hours ago) and read 1252 times:
Quoting Humberside (Reply 3): The US wants slots at LHR for the likes of CO/DL etc if Bermuda 2 is abolished. As BAA is privately owned, the UK government cant provide this
BAA might operate LHR but has nothing to do with slot allocation at the airport. This is controlled by an organisation sponsored by the LHR user airlines that operates under EU guidelines. This results in airlines not currently using but wishing to use LHR being favoured in the allocation of new or surrendered slots
Quoting LTU932 (Reply 4): My thoughts exactly. I wonder though, why the hell didn't the EU speak out against Bermuda II? The EU is all for competition and all that Bermuda II does is the total opposite.
The negotiations on a UK-US Open Skies Agreement are between the US Government and the EU Commission. As in all other civil aviation matters, Open Skies is only a matter for the UK government to approve any final agreement. It is most unlikely that the EU would 'speak out' against something they have been responsible for for several years.
To put things into context it must be remembered that:
Only the UK amongst EU members has two airlines operating to the USA. Every other European country has but one or none (meaning lower competition.) Further the UK has a third airline anxious to complete in the trans-Atlantic market (meaning potentially even more competition.)
London is served by AA, CO, DL, NW, UA and US. No other European city is served by so many US airlines. However not all these airlines serve LHR. Where this is the case Bermuda 2 is designed to protect the US airline from 'unfair' competition from BA by forbidding any British airline serving their home base direct from LHR. Hence, for example, both BA and DL serve ATL from LGW. It also explains why both BA and AA serve DFW from LGW because it was PA and TW and not AA and UA that were the nominated US airlines at the time of Bermuda 2 (1977). At that time BA was the only nominated UK airline (competing against PA and TW) as VS was then only a twinkle in SRB's eye!
While no UK aircraft may be wet leased by a US airline (resulting in the fairly farcical arangement by which BA and AF Concordes had to be reregistered on arrival at IAD befoire they were flown by Braniff crews monitored by BA crews (to meet insurance regulations) with the BA legal documentation stored in the aircrafts' toilets during the IAD-DFW-IAD rotation. This, of course, is to proteect US jobs from foreign competition. However BA has wet leased Atlas Air aircraft on the US register.
While no foreign ownership of US airlines can exceed 25 per cent, all three British majors are more than 25 per cent foreign owned with SV owning 49 pewr cent of VS and LH anf SK having substantial stakes in BD while the British government changed a law created at the time of BA's privatisation limiting foreign ownership to 40 per cent as, within two or three years of privatisation US institutions and private investors bought well over 40 per cent of their shares.
In other words BA is often painted as being anticompetitive but actually operates in an arguably more competitive environment than any other European or US airline. Indeed it holds a lower proportion of slots at its home base of LHR than those held by any other major airline in the world at its home base.
GoCOgo From United States, joined Jan 2005, 695 posts, RR: 2 Reply 7, posted (3 years 8 months 1 week 6 days 4 hours ago) and read 1218 times:
Quoting VV701 (Reply 5): Bermuda 2 is designed to protect the US airline from 'unfair' competition from BA by forbidding any British airline serving their home base direct from LHR. Hence, for example, both BA and DL serve ATL from LGW.
Well, at least the historic bases. CO has to deal with LHR service at EWR, from both BA and VS. That fact shows BII is unfair, at least to CO.
Quoting VV701 (Reply 5): In other words BA is often painted as being anticompetitive but actually operates in an arguably more competitive environment than any other European or US airline. Indeed it holds a lower proportion of slots at its home base of LHR than those held by any other major airline in the world at its home base.
Key word "arguably." I would say the 6 legacies here in the US offer more competition than 2 (if you count VS, which is significantly smaller than BA at LHR, or, heck, in general) in the UK. That one statistic is only one of many that demonstrate competition. Which, by the way, is debatable. If you consider markets served, not just one airport (i.e. toss in LGW, etc.), CO might have a lower percentage in the NYC market (EWR, JFK, LGA, HPN) than BA does in the London market (LHR, LGW, LTN, STN). (although I haven't done the math, so I could be wrong)
"Why you fly is your business, how you fly is ours"
Atmx2000 From United States, joined Oct 2004, 4576 posts, RR: 41 Reply 8, posted (3 years 8 months 1 week 6 days 3 hours ago) and read 1191 times:
Quoting VV701 (Reply 5): Where this is the case Bermuda 2 is designed to protect the US airline from 'unfair' competition from BA by forbidding any British airline serving their home base direct from LHR.
Was designed. As I have repeatedly said in the past this is no longer the case...
Quoting GoCOgo (Reply 7): Well, at least the historic bases. CO has to deal with LHR service at EWR, from both BA and VS. That fact shows BII is unfair, at least to CO.
Not just CO at EWR, but NW at DTW and US at PHL and PHX. And of course DL has to deal with UK (and US carriers) at JFK, though JFK can't be called a home base for anyone but JetBlue. BII has led to a whole lot of assymetrical competition.
Quoting VV701 (Reply 5): Indeed it holds a lower proportion of slots at its home base of LHR than those held by any other major airline in the world at its home base.
I think we already came to the conclusion that this was not true in a prior thread, as Japanese carriers have fewer slots at NRT. Moreover, LHR, like NRT, is an airport dominated by international and intercontinental flights by UK and foreign carriers. If British airlines expect to be allowed to fly to airports outside the UK, they should expect that foreign carriers will have want similar access to UK's most important gateway.
Quoting VV701 (Reply 5): Only the UK amongst EU members has two airlines operating to the USA. Every other European country has but one or none (meaning lower competition.) Further the UK has a third airline anxious to complete in the trans-Atlantic market (meaning potentially even more competition.)
On the otherhand the US is a country 5 times the size of the UK, and should have about that many more major carriers flying routes between the US and UK.
[Edited 2006-03-01 06:19:31]
ConcordeBoy is a twin supremacist!! He supports quadicide!!
Lutfi From China, joined Sep 2000, 602 posts, RR: 1 Reply 9, posted (3 years 8 months 1 week 6 days 2 hours ago) and read 1176 times:
I say scrap it.
The US airlines couldn't afford to buy slots at LHR at present - so don't think it would make much difference. In the long run - yes, CO/NW etc could buy (say) AF/KL slots for inter-EU flights and use for transatlantic.
Atmx2000 - foreign carriers are allowed to land in LHR. It is only USA that has got this restriction on just 2 designated airlines. And as (so far) the US government hasn't offered enough in return for the UK govt to change. E.g "FLy America", ownership limits.
Note that the proposed EU/USA treaty would really stiff the US carriers if it goes thru. If any EU airline can fly from any EU point - do you think (say) that KLM would give/ sell slots at LHR to NW? Uh uh brother. KLM would just convert LHR-AMS slots to LHR-USA or LHR-Asia, and fly on their own metal. They might be gracious enough to offer a codeshare...
I think the US airlines shut out of LHR realise this, which is why they haven't been pushing that hard. E.g., if B2 goes to be replaced by US/EU open skies, yes, competition ex LHR transatlantic will increase, but the non-LHR US carriers won't get much (their EU partners will take up the rights instead, as they have the slots) and this will reduce profits of the 2 US airlines that do fly to LHR.
Atmx2000 From United States, joined Oct 2004, 4576 posts, RR: 41 Reply 10, posted (3 years 8 months 1 week 6 days 2 hours ago) and read 1166 times:
Quoting Lutfi (Reply 9): Note that the proposed EU/USA treaty would really stiff the US carriers if it goes thru. If any EU airline can fly from any EU point - do you think (say) that KLM would give/ sell slots at LHR to NW? Uh uh brother. KLM would just convert LHR-AMS slots to LHR-USA or LHR-Asia, and fly on their own metal. They might be gracious enough to offer a codeshare...
Quoting Lutfi (Reply 9): I think the US airlines shut out of LHR realise this, which is why they haven't been pushing that hard. E.g., if B2 goes to be replaced by US/EU open skies, yes, competition ex LHR transatlantic will increase, but the non-LHR US carriers won't get much (their EU partners will take up the rights instead, as they have the slots) and this will reduce profits of the 2 US airlines that do fly to LHR.
It will hurt BA far more, as they depend on traffic to North America for a great deal of their profits.
Also do these other carriers have the metal and personnel to take advantage of it right away? Sending the aircraft that flew AMS-LHR to the US is probably a waste of a slot. On the other hand sending the US carriers' aircraft flying to LGW instead to LHR might be a good idea. And I've read here that AF has indicated they have no intention on flying LHR-US routes.
And Bermuda II isn't keeping non-UK carriers from the EU from flying to Asia.
Anyway, I think the US should indicate its intention to renounce the Bermuda II agreement and then take away rights from UK carriers if a suitable resolution to the situation isn't found. The UK indicated it would renounce the original post-WWII Bermuda agreement in the 70s when US marketshare on US-UK routes was dominant, which led to the negotiations that created the current agreement. That agreement coupled with changes in the US market has created the current competitive environment, and its effects must be undone.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
Lutfi From China, joined Sep 2000, 602 posts, RR: 1 Reply 11, posted (3 years 8 months 1 week 6 days 1 hour ago) and read 1150 times:
ATMX2000
BA, yes they would hurt, but still survive. Would UA and AA...?
AMS-LHR is a waste of a slot (as people can now take train) Using that slot for LHR-USA would be better, we all agree. Q is - would KLM sell it to NW (if they can afford it) or keep themselves?
Yes, B2 is keeping airlines from flying to Asia. Basically all EU - third party talks are waiting the outcome of EU-US, which will set the pattern for (say) EU-Australia, or EU-DXB
Just a concern - the anti-aviation lobby in EU is getting stronger. There is now lobbying to restrict EU aviation growth to 2% a year, in order to make Kyoto Treaty. If I were US, I would make a deal with current pro-competition EU, rather than risk the Green lobby getting more powerful.
Joost From Netherlands, joined Apr 2005, 2189 posts, RR: 5 Reply 13, posted (3 years 8 months 1 week 6 days ago) and read 1123 times:
Quoting LTU932 (Reply 4): My thoughts exactly. I wonder though, why the hell didn't the EU speak out against Bermuda II? The EU is all for competition and all that Bermuda II does is the total opposite.
The EU is defenitely against Bermuda II. The UK government is defending it, but the European Commission does not like it at all.
Quoting Lutfi (Reply 11): AMS-LHR is a waste of a slot (as people can now take train)
What train?? Brussels and Paris are well connected by train to London, from the Netherlands the plane is still by far the fastest mean to get to London. AMS-LHR is being flown >20 times daily (KL, BA, BD), AMS-LON >60: there is a huge O-D and connecting market between both cities.
For KL selling slots to NW, I don't think so. They might lease them out to the KL-NW transatlantic joint-venture. Don't forget they share everything transatlantic-wise, so the equipment doesn't even matter.
Atmx2000 From United States, joined Oct 2004, 4576 posts, RR: 41 Reply 14, posted (3 years 8 months 1 week 6 days ago) and read 1121 times:
Quoting Lutfi (Reply 11): BA, yes they would hurt, but still survive. Would UA and AA...?
BA is dependent on UK-US traffic for a large chunk of its revenue. UA and AA are not. UA certainly doesn't have as great a share of that market as the other carriers, so its vulnerability to competition on that route is bound to be lower. AA has higher exposure, but it benefits from having good feed at both ends due to its relationship with BA and the fact that it flies from its US hubs and focus cities. BA on the otherhand flies to several US markets that aren't AA hubs, so it is relying primarily on O&D traffic on the US end. Many of these markets are hubs of SkyTeam or Star carriers that can't currently fly to LHR. Whether or not US carriers or their EU partners fly from LHR to the US, those US carriers will get increased revenue and be able provide better feed for those flights.
Of course the biggest loser will be VS, who pretty much depends on O&D traffic that would be the easiest for non-UK EU carriers to capture.
Quoting Lutfi (Reply 11): AMS-LHR is a waste of a slot (as people can now take train) Using that slot for LHR-USA would be better, we all agree. Q is - would KLM sell it to NW (if they can afford it) or keep themselves?
Where would they send the plane? They can't necessarily get rights in the most attractive US markets. And flying long haul from a non hub to the US may not be the most effective thing to do in the short term.
Quoting Lutfi (Reply 11): Just a concern - the anti-aviation lobby in EU is getting stronger. There is now lobbying to restrict EU aviation growth to 2% a year, in order to make Kyoto Treaty. If I were US, I would make a deal with current pro-competition EU, rather than risk the Green lobby getting more powerful.
If the green lobby gets stronger, EU aviation will become weaker. And if they put up road blocks, the US can put up road blocks as well. The green lobby should not be a major concern for US aviation authorities.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
Joost From Netherlands, joined Apr 2005, 2189 posts, RR: 5 Reply 15, posted (3 years 8 months 1 week 6 days ago) and read 1110 times:
Quoting Atmx2000 (Reply 14):
Where would they send the plane? They can't necessarily get rights in the most attractive US markets. And flying long haul from a non hub to the US may not be the most effective thing to do in the short term.
Getting rights? Why getting rights? The concept agreement EU-US is an open skies agreement, allowing airlines from both the US and the EU to serve all markets. Slots can be an issue, but you're not telling me that NW-KL can not get a slot at DTW, for a LHR flight. I might think KL would be willing to offer one AMS-LHR slot for a DTW-LHR.
And even though LHR is pretty full slot-wise, there is a lot of trading. Recently, carriers like Air Baltic 'sold' their slots to other carriers at a good price.
VV701 From United Kingdom, joined Aug 2005, 3792 posts, RR: 20 Reply 16, posted (3 years 8 months 1 week 5 days 12 hours ago) and read 1017 times:
Quoting GoCOgo (Reply 7): CO has to deal with LHR service at EWR, from both BA and VS. That fact shows BII is unfair, at least to CO.
Sorry. I thought that the CO HOME BASE was IAH and that EWR was a CO hub (like LGW is a BA hub from which it operates its direct flights to IAH).
Quoting Atmx2000 (Reply 8): And of course DL has to deal with UK (and US carriers) at JFK,
Again, sorry. I thought that DL's HOME BASE was ATL (like LGW is a BA hub from which it operates its services in direct competion with DL to ATL) and that JFK only became a DL hub when they took over PA's services.
Quoting GoCOgo (Reply 7): I would say the 6 legacies here in the US offer more competition than 2 (if you count VS, which is significantly smaller than BA at LHR, or, heck, in general) in the UK.
Quoting GoCOgo (Reply 7): If you consider markets served, not just one airport (i.e. toss in LGW, etc.),
I did. AS you subsequently suggested I should have, I tossed in LGW (BA's other hub) and pointed out that:
Quoting VV701 (Reply 5): London is served by AA, CO, DL, NW, UA and US.
I assume these are the '6 legacies here in the US' to which you refer. But since they all serve LON I am simply mystified as to the point you are trying to make. Is it that BA faces a higher level of competition at LGW / LHR than the 6 US legacies do in the US. If so, I agree.
Quoting Atmx2000 (Reply 8): I think we already came to the conclusion that this was not true in a prior thread, as Japanese carriers have fewer slots at NRT.
While it is true that JAL has only 22 per cent and ANA 15 per cent of slots at NRT, NRT is NOT JAL's or ANA's home base. BA had, according to Airline Business Magazine, 42.3 per cent of LHR slots in 2004. The comparative figures for the US legacies at their home bases are:
American had 83.2 per cent of DFW slots
Continental had 85.7 per cent of IAH (and 66.2 per cent of EWR) slots.
Delta had 74.8 per cent of ATL slots.
US had 70.4 per cent of PHL slots.
UA had 47.5 per cent of ORD slots.
So it is clear that BA has more competition at its home base than do any of the above. It is also clear that excepting only UA, these US airlines have the huge advantage of facing hardly any home base competition. Indeed they totally dominate their home bases controlling more than two-thirds of all the slots, significantly more than even AF have at CDG (57.9 per cent of slots), LH have at FRA (60.1 per cent of slots) or KL have at AMS (50.7 per cent of slots).
BA and all other European airlines are expected by many American A-netters and apparently the US government to concede an Open Skies environment, allow US airlines 5th freedom rights between European countries and from European countries to the Near, Middle and Far East and to Africa. At the same time any chances that the US will operate the sort of open civil aviation market that already allows virtually unrestricted foreign investment
in UK airlines, allows UK armed forces and government personnel to fly by an airline of any nationality - Tony Blair flew to South Africa recently in a Swiss DC-8 - and allows US registered aircraft to be wet leased for operation on behalf of UK airlines jusat pie in the sky.
Rightly or wrongly in the name of national security the US government protects its civil aviation industry from competition in a way that it protects few if any other US industries. That is a decision that is its responsibility to take. But neither it nor American citizens can expect the UK and the EU to concede Open Skies and all the 5th freedom rights it is demanding (in addition to those airlines like UA already hold but choose not to use presumably because of the highly competitive nature of the European market) if it continues to offer nothing of equivalent value in exchange and also continues to protect its airlines from the market forces that exist outside the USA.
Atmx2000 From United States, joined Oct 2004, 4576 posts, RR: 41 Reply 17, posted (3 years 8 months 1 week 5 days 11 hours ago) and read 993 times:
Quoting VV701 (Reply 16): Sorry. I thought that the CO HOME BASE was IAH and that EWR was a CO hub (like LGW is a BA hub from which it operates its direct flights to IAH).
Quoting VV701 (Reply 16): Again, sorry. I thought that DL's HOME BASE was ATL (like LGW is a BA hub from which it operates its services in direct competion with DL to ATL) and that JFK only became a DL hub when they took over PA's services.
Quoting VV701 (Reply 16): While it is true that JAL has only 22 per cent and ANA 15 per cent of slots at NRT, NRT is NOT JAL's or ANA's home base. BA had, according to Airline Business Magazine, 42.3 per cent of LHR slots in 2004. The comparative figures for the US legacies at their home bases are:
American had 83.2 per cent of DFW slots
Continental had 85.7 per cent of IAH (and 66.2 per cent of EWR) slots.
Delta had 74.8 per cent of ATL slots.
US had 70.4 per cent of PHL slots.
UA had 47.5 per cent of ORD slots.
This concept of a home base is extremely misleading and largely irrelevent. US airlines have large number of slots at the airports you mentioned because they use them to fly domestic routes as well as feeder routes that are not served by other airlines. This creates a situation where the airline flies to many airports that are not any sort of hub or base of another airline, so no airilne is there to demand reciprocral rights. BA chooses not to do so at LHR, and instead focuses almost exclusively on international routes, frequently flying to major hubs of other airlines. Rightly, those airlines should want reciprocral access to the same airports BA flies from if they should choose to fly the route.
Quoting VV701 (Reply 16): BA and all other European airlines are expected by many American A-netters and apparently the US government to concede an Open Skies environment, allow US airlines 5th freedom rights between European countries and from European countries to the Near, Middle and Far East and to Africa.
Governments should demand 5th freedom rights from countries whose airlines are benefiting from 6th freedom traffic. It is in actuality the corresponding and proper reciprocral right for 6th freedom rights, as it allows airlines from different countries to take advantage of the same route market. If another nation refuses to grant such rights, it would be justified in my view to limit sixth freedom traffic through a variety of means, including reduced market access and ticketing restrictions.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
BA, yes they would hurt, but still survive. Would UA and AA...?
More importantly, would VS survive? I would think that they depend more on their profits from UK/US than BA. Strange that Branson, the people's champion, has not come out and said that BII is anti-competitive.
MOL on SRB's latest attack at BA: "It's like a little Chihuahua barking at a dying Labrador. Nobody cares."
Atmx2000 From United States, joined Oct 2004, 4576 posts, RR: 41 Reply 19, posted (3 years 8 months 1 week 5 days 11 hours ago) and read 965 times:
Quoting BCAL (Reply 18): More importantly, would VS survive? I would think that they depend more on their profits from UK/US than BA. Strange that Branson, the people's champion, has not come out and said that BII is anti-competitive.
I thought I had posted a response where I said that, but I apparently didn't. But you are right. VS depends mostly only on O&D traffic, which would be the easiest for new entrants to peel away than connecting/transiting traffic. They do get feed from other airlines on both sides of the pond (CO @ EWR for example), but those arrangements may change if other US airlines and BMI are allowed to fly LHR-US.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
VV701 From United Kingdom, joined Aug 2005, 3792 posts, RR: 20 Reply 21, posted (3 years 8 months 1 week 5 days 6 hours ago) and read 914 times:
Quoting Atmx2000 (Reply 17): This concept of a home base is extremely misleading and largely irrelevent.
You have really lost me. BA has the bulk of its engineering facilities at LHR. Do you mean that that is 'largely irrelevant' to their operations? BA have their Administrative HQ on the north west corner of LHR. Is that 'largely irrelevant' to their operations? Economically the answer is a resounding 'No'.
Quoting Atmx2000 (Reply 17): US airlines have large number of slots at the airports you mentioned because they use them to fly domestic routes as well as feeder routes that are not served by other airlines.
Here in the UK we do not have this non-competitive type of market. Why does it exist in the US? Is their some form of anti-trust immunity that allows such monopolistic markets to exist? Or is there some unwritten airline agreement that says you leave my hub alone and I will not compete at yours? Or am I missing something?
Two of the three British airlines operating out of LHR - just one more than the number of US airlines operating out of LHR - also fly to domestic airports. On most of these routes they compete head to head. And they do this even though they had 53.8 per cent of LHR slots in 2004 (BA 42.3 per cent, BM 11.5 per cent). They actually operate a smaller number of international flights from LHR than do their international competitors.
Years ago you could fly to most major British cities and towns from LHR. For example BM operated LHR-BHX and BA LHR-PLY. But gradually all but the trunk domestic routes disappeared as neither airline could afford to use valuable LHR slots that they had so few of for low density domestic services.
A British airline, Air UK, saw this as an opportunity. It set up feeder services into AMS from 14 UK airports that had no LHR service. So Air UK was bought by KLM and became KLM uk before being incorporated into KLM cityhopper. The equivalent in the US would be for feeder services into US gateway airports to be discontinued and for passengers from non-gateway airports having to fly to Canada or Mexico to join their long haul international flights.
One could ask if it is fair that BA cannot feed into its LHR home base and hub with a comprehensive domestic service like all the US legacy airlines do. But this is the penalty they have to face as they operate in a truly competitive market place. Now we are thankfully begining to see US airlines wake up rather late to the opportunities that this situation presents. BA finds it difficult to operate long haul flights economically and competitively from UK airports that are neither its home base nor one of its existing hubs. As we have seen local residents cannot fly to the BA LHR hub. But at last instead of focussing on LHR as if it was the greatest airport in the world (which, believe me, it certainly is not) they are begining to open up new opportunities for themselves and British potential passengers by opening services to airports such as BHX, EDI and NCL. What is more the British government is telling the US airlines that if they apply for fifth freedom rights through airports such as these to, for example, continental Europe, they will recommend to the controlling body, the EU Commission, that such applications should be given favourable consideration. Personally I would support this because of the improved service it would offer British consumers. But they are coming late. Both AF and LH have seen what KL achieved and have introduced feeder flights from many UK airports into CDG and FRA, again to the benefit of both competition and the British consumer.
Incitatus From Brazil, joined Feb 2005, 2651 posts, RR: 20 Reply 22, posted (3 years 8 months 1 week 5 days 5 hours ago) and read 890 times:
Quoting VV701 (Reply 5): London is served by AA, CO, DL, NW, UA and US. No other European city is served by so many US airlines.
While the second statement has already been corrected, it is appropriate to remind that the US-UK market is huge compared to any other US-Europe market. Obviously, that should imply that the market is more competitive and BA and Virgin are exposed to more competition. Considering that business fares from London to the US tend to be higher from mainland Europe to the US, it is clear that Bermuda II is anti-competitive and shields British Airways in particular from competition.
Quoting VV701 (Reply 5): While no foreign ownership of US airlines can exceed 25 per cent,
This is as relevant to the US-UK market as the protections imposed by the state of Florida on the import of orange juice.
Quoting VV701 (Reply 5): In other words BA is often painted as being anti-competitive but actually operates in an arguably more competitive environment than any other European or US airline.
That's a false statement and Bermuda II was conceived by the British exactly to prevent US carriers from gaining market share.
Quoting VV701 (Reply 16): But neither it nor American citizens can expect the UK and the EU to concede Open Skies and all the 5th freedom rights it is demanding (in addition to those airlines like UA already hold but choose not to use presumably because of the highly competitive nature of the European market) if it continues to offer nothing of equivalent value in exchange and also continues to protect its airlines from the market forces that exist outside the USA.
That is a typical stalling negotiation argument seen ad nauseum in DoT proceedings with other countries. You fail to realize that the British traveller may actually gain from the removal of the Heathrow restrictions. There will be more service and more passengers connecting at Heathrow (e.g., oil business from Texas), enabling a virtuous cycle. The problem with that is that profits will be smaller.
Quoting VV701 (Reply 16): While it is true that JAL has only 22 per cent and ANA 15 per cent of slots at NRT, NRT is NOT JAL's or ANA's home base. BA had, according to Airline Business Magazine, 42.3 per cent of LHR slots in 2004. The comparative figures for the US legacies at their home bases are:
American had 83.2 per cent of DFW slots
Continental had 85.7 per cent of IAH (and 66.2 per cent of EWR) slots.
Delta had 74.8 per cent of ATL slots.
US had 70.4 per cent of PHL slots.
UA had 47.5 per cent of ORD slots.
The reality is that Britain failed to invest in airport infrastructure. Heathrow is probably half the size (in runways and gates) that it needs to be. That is beneficial to BA because limited slots at LHR reduce competition. That is not from the US carriers only but from the likes of Ryanair and other European carriers. I don't think US carriers should pay with forbidden access to the airport if Britain is unable to keep airport development to demand levels. Each country should pay for their own incompetence .
Quoting VV701 (Reply 21): One could ask if it is fair that BA cannot feed into its LHR home base and hub with a comprehensive domestic service like all the US legacy airlines do.
This goes back to airport development. With the price of land around London, it's questionable that any of these services would be profitable when accounting for infrastructure. The country has chosen to limit airport development and squeeze out the less profitable services. Thus the domestic network is limited.
Quoting VV701 (Reply 21): BA finds it difficult to operate long haul flights economically and competitively from UK airports that are neither its home base nor one of its existing hubs.
By the same reason we do not see United or American operating European services out of Detroit. No feed -> no flight. MAN->US on BA is not meant to be unless BA wants to build connections at MAN.
COSPN From Northern Mariana Islands, joined Oct 2001, 1134 posts, RR: 0 Reply 23, posted (3 years 8 months 1 week 5 days 5 hours ago) and read 884 times:
I Thought the only slot controled airports in the USA were DCA/ORD/LGA/EWR/JFK ????
GoCOgo From United States, joined Jan 2005, 695 posts, RR: 2 Reply 24, posted (3 years 8 months 1 week 5 days 4 hours ago) and read 866 times:
Quoting VV701 (Reply 21): Quoting Atmx2000 (Reply 17):
This concept of a home base is extremely misleading and largely irrelevent.
You have really lost me. BA has the bulk of its engineering facilities at LHR. Do you mean that that is 'largely irrelevant' to their operations? BA have their Administrative HQ on the north west corner of LHR. Is that 'largely irrelevant' to their operations? Economically the answer is a resounding 'No'.
The point he and I are getting at is that competition is judged, not just from an airlines home base, but throughout their system. Airlines care about making a profit at all their hubs, not only at a home base. While having a home base where HQ and maintenance is performed, the PHYSICAL LOCATION of it is largely irrelevant. What, because CO doesn't face LHR competition at IAH makes screwing them at their MAIN EUROPEAN GATEWAY OK?
Quoting VV701 (Reply 21): Quoting Atmx2000 (Reply 17):
US airlines have large number of slots at the airports you mentioned because they use them to fly domestic routes as well as feeder routes that are not served by other airlines.
Here in the UK we do not have this non-competitive type of market. Why does it exist in the US? Is their some form of anti-trust immunity that allows such monopolistic markets to exist? Or is there some unwritten airline agreement that says you leave my hub alone and I will not compete at yours? Or am I missing something?
Two of the three British airlines operating out of LHR - just one more than the number of US airlines operating out of LHR - also fly to domestic airports. On most of these routes they compete head to head. And they do this even though they had 53.8 per cent of LHR slots in 2004 (BA 42.3 per cent, BM 11.5 per cent). They actually operate a smaller number of international flights from LHR than do their international competitors.
BA sees just as much competition as everyone else. For example, let's say I want to fly CLE-LON. I could connect in either EWR, CVG, DTW, PHL, JFK, ORD, IAD, or YYZ (not to mention a few more odd choices) without going too mush out of my way. But let's say I wanted to fly from a secondary UK to New York. I could connect in LHR, LGW, CDG, AMS, MAD, FRA, or perhaps BRU. I have a choice of about 10 different airlines (including foreign carriers with US codeshare partners) to gem me to LON reasonably, and there are about the same number that can het me from the UK to NYC within reason.
In the US, many airports are hubbed with limited competition, not because the US is anti-competitive, but because there are plenty of logical airport choices. You want to have a UK hub, where ya' going to go? London, preferably LHR, of course. But you want to serve the Midwestern US? Well, airlines have chosen to have hubs in ORD, DTW, MSP, CLE, CVG, PIT (in the past with US, but has since been de-hubbed), and MDW (I'd call what WN has their a de facto hub). All these hubs serve O&D, of course, but they are competing for the same connecting traffic. Same for the International LHR flying. Want to serve the UK, simply fly to LHR or, if you can't get there, LGW. Want to serve the US.? Serve NYC, of course, but to serve more areas, you might fly to a codeshare partner hub.
"Why you fly is your business, how you fly is ours"
Atmx2000 From United States, joined Oct 2004, 4576 posts, RR: 41 Reply 25, posted (3 years 8 months 1 week 5 days 4 hours ago) and read 855 times:
Quoting VV701 (Reply 21): Here in the UK we do not have this non-competitive type of market. Why does it exist in the US? Is their some form of anti-trust immunity that allows such monopolistic markets to exist? Or is there some unwritten airline agreement that says you leave my hub alone and I will not compete at yours? Or am I missing something?
This is purely an outcome of having a hub and spoke system with lots of spokes. There are a large number of small cities and communities with airports which have no major airline based there and are thus only spoke cities. The flights out of these airports are served by large airlines or their RJ subsidiaries or partners and connect these airports to their hubs. These cities may be connected to multiple carriers' hubs, providing direct service to major hub cities in the range of smaller jets and connecting service to larger number of destinations via the hub. Individual hub-spoke routes are often only served by one carrier as that hub city/airport is may be the hub of only one airline.
Quoting VV701 (Reply 21): Two of the three British airlines operating out of LHR - just one more than the number of US airlines operating out of LHR - also fly to domestic airports. On most of these routes they compete head to head. And they do this even though they had 53.8 per cent of LHR slots in 2004 (BA 42.3 per cent, BM 11.5 per cent). They actually operate a smaller number of international flights from LHR than do their international competitors.
BA only flies to four UK cities (Newcastle, Manchester, Edinburgh, Aberdeen) from LHR, with 39 daily flights maximum by my tally. Compare this to the UA at ORD with smallest percentage of flights from its home base according to your tally. After tallying US destinations beginning with A or B, I count around 65 daily flights for 13 cities. At that point I got tired of counting, but you can imagine how many domestic destinations and flights there are for all the cities starting with C to Z. The vast majority of these cities aren't hub cities, and those cities won't be served by anyone else other than maybe AA on routes to Chicago/ORD. The same thing is seen at other US airlines hubs, and that is why US airlines have large movement shares at their hubs.
Quoting VV701 (Reply 21): One could ask if it is fair that BA cannot feed into its LHR home base and hub with a comprehensive domestic service like all the US legacy airlines do. But this is the penalty they have to face as they operate in a truly competitive market place. Now we are thankfully begining to see US airlines wake up rather late to the opportunities that this situation presents. BA finds it difficult to operate long haul flights economically and competitively from UK airports that are neither its home base nor one of its existing hubs. As we have seen local residents cannot fly to the BA LHR hub
This has nothing to do with a competitive market place, and everything to do with the lack airport capacity in the London area, which has created scarcity. And because of that scarcity, UK airlines have decided that using their slots for international flights brings more revenue and profits, and the UK government has done nothing to stop them and certainly not enough to alleviate the capacity problem. Regardless, that isn't an excuse for BA and VS to have access from LHR to hubs of US airlines that don't have access to LHR. And don't you dare say that UK airlines operate in a truly competitive marketplace when Bermuda II exists solely because the UK government wanted to restrict competition from US airlines.
Quoting VV701 (Reply 21): But at last instead of focussing on LHR as if it was the greatest airport in the world (which, believe me, it certainly is not) they are begining to open up new opportunities for themselves and British potential passengers by opening services to airports such as BHX, EDI and NCL.
It has little to do with LHR being a great airport, but more to do with LHR being situated in a location closer to the city and HQs of many businesses, as well as to the population north and west of London. In other words, better access to more O&D traffic, including premium traffic, between the US and London. I'm sure BA and VS wouldn't be happy if ISLIP was upgraded for large jets and told that they have to fly there instead of EWR and JFK.
Quoting VV701 (Reply 21): What is more the British government is telling the US airlines that if they apply for fifth freedom rights through airports such as these to, for example, continental Europe, they will recommend to the controlling body, the EU Commission, that such applications should be given favourable consideration.
This is a silly idea. Why would US carriers want to fly indirect routes through smaller UK cities into continental Europe. There may not be enough fifth freedom passengers at the right time at these cities for convenient scheduling of flights between the US and continental EU to sustain beyond service, and many US O&D passengers won't appreciate the stop if their destination is in continental Europe and will pay less accordingly or find another flight.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
26 VV701: Considering that UA cut its JFK-LHR service by half it seems that US airlines cannot compete with BA and VS. And when you look at the product that BA
27 JM017: All the above airports are slot-controlled except EWR
28 VV701: Tell that to Richard Branson who obviously sees Virgin Atlantic and Virgin America as not unrelated businesses. Apparently the US wants the investmen
29 Atmx2000: The UK indicated its intent to renounce the original Bermuda agreement in 1976. The US had no choice but negotiate a new agreement, one which was les
30 Atmx2000: They are only asking for the rights that were taken away by Bermuda II, without the UK losing the corresponding anterior fifth freedom right now know
31 Wdleiser: CO's homebase is IAH, they are headquartered in Houston. CO's European and even Pacific traffic mainly use EWR as it is closer to the final destinati
32 Wdleiser: Any one else have any more Bermuda II resources I can get information from? I need about 6-10 sources which I can site, and A.net opinions won't count
33 MasseyBrown: You mean cite. Google, little dude, google.
34 Incitatus: I'm in agreement with that one: If any US airline wishes to operate at LHR, let them pay for slots or get them from their European partners. I do not
35 Boeingfanyyz: Wikipedia everything! Cheers, Boeingfanyyz
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