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How Much Is Early Morning LHR Slot Worth!  
User currently offlineAirA380 From Bangladesh, joined Mar 2006, 179 posts, RR: 0
Posted (8 years 4 months 4 weeks 18 hours ago) and read 4664 times:

How much Would an airline pay to get an early morning Landing slot in LHR. I believe early morning is the most busiest time in LHR.

what would it cost for slot(landing/take off), from 1PM to 3pm on least busiest time.

Has any slot been sold in LHR, and How much was it?


I'm flying without wings!!!!!!!!
14 replies: All unread, jump to last
 
User currently offlinePlanetime From Singapore, joined Mar 2006, 719 posts, RR: 0
Reply 1, posted (8 years 4 months 4 weeks 18 hours ago) and read 4635 times:

Quoting AirA380 (Thread starter):
Has any slot been sold in LHR, and How much was it?

Pretty sure those are sold. I think United sold their slot JFK-LHR 1 slot to VS I believe. Can someone update me on this. Thanks!


User currently offlineArsenal@LHR From United Kingdom, joined Mar 2001, 7792 posts, RR: 20
Reply 2, posted (8 years 4 months 4 weeks 17 hours ago) and read 4533 times:
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It's difficult to say the exact amount but i assume it would probably be several million pounds at least.


In Arsene we trust!!
User currently offlineJet-lagged From United States of America, joined Mar 2002, 872 posts, RR: 0
Reply 3, posted (8 years 4 months 4 weeks 16 hours ago) and read 4424 times:

Quoting Arsenal@LHR (Reply 2):
It's difficult to say the exact amount but i assume it would probably be several million pounds at least

Yes, I think you are right. In fact, if you have the right flight to put to use, you might pay even double or treble that. Let's assume and calculate . . .

The aeroplane can hold 300 pax, and it is an expensive flight from Asia or NorthAmerican. RT tickets sold are
15 F at 4000
65 J at 2000
220 Y at 1000
That makes an average of US$1367 per seat.

The plane average 75% full, then you have an average of 240 seats x US$1367/seat = US$307,500.

If 5% profit margin, that is US$15,375.

Assume you can fly 365 days per year. And, limit your time frame to 4 years, since after that things may change and people not want the flight as much, and the time value of money makes future returns increasingly small. US$15,375 * 365 * 4 = US$22,447,500.

If you have a smaller plane with fundamentatlly lower ticket prices, then the slot would be worth much less and you would be willing to pay much less.

After doing the above, I did a quick Google and found this link:
http://www.hitrans.org.uk/downloads/...%20Transport%20in%20the%20UK.ppt#8 <-- GPB10M/pair swapped, which means less total value to the seller than if the slot were brand new, since they'll still get value by using a slot from aother time.

Cheers!


User currently offlineMarBergi From Ireland, joined Aug 2004, 182 posts, RR: 0
Reply 4, posted (8 years 4 months 4 weeks 16 hours ago) and read 4417 times:

If it helps, when the Irish Goverment were deciding to privsatise Aer Lingus they valued the slots at EUR8M/pair.

User currently offlineANother From , joined Dec 1969, posts, RR:
Reply 5, posted (8 years 4 months 4 weeks 7 hours ago) and read 4198 times:

Quoting AirA380 (Thread starter):
Has any slot been sold in LHR, and How much was it?

Actually the EC regulation which applies to slots prohibits the buying / selling of slots. They view this as anti-competitive.

However slot exchange is permitted by this regulation, and the UK courts have ruled that a 'financial top-up' is permissable by the regulation. The EC has disagreed and has put steps into motion, which if they are successful, will result in the prohibition of this financial top-up.

How does it work? Well let's say that Airline Q want't to add one frequency at LHR and finds out that Airline U has a slot pair that they are willing to give up under the right conditions. Airline Q requests a slot pair from the coordinator under the normal rules. This is probably an awful unusable pair, but airline Q will never operate it so they don't care. They then advise the coordinator that airline Q is exchanging its (awful) slot pair for airline U's pair. All of this is in accordance with the EC rules. As a side deal airline Q will pay airline U any agreed financial top-up. The UK courts have said this is OK, but the EC doesn't like it. Airline U then advises the coordinator that they no longer require their new (awful) slot pair, and returns them to the slot pool.

The EC is planning on rewritting their rules and it appears that they will permit 'secondary' purchase. (buy/sell of slots already allocated) but hasn't figured out to do with primary purchase (buy/sell of slots in the pool). The last 'consultation' didn't reach a conclusion and it is likely that we won't see a draft regulation until the end of 2006 at the earliest.


User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7131 posts, RR: 57
Reply 6, posted (8 years 4 months 4 weeks 6 hours ago) and read 4165 times:

Bmi got about £10m from NZ for one pair of slots. hey presto .... BMI are profitable...


The world is really getting smaller these days
User currently offlineAirA380 From Bangladesh, joined Mar 2006, 179 posts, RR: 0
Reply 7, posted (8 years 4 months 3 weeks 6 days 19 hours ago) and read 3811 times:

is slot allocated based on aircraft size, for instance Airline A operates a320 and exchanges its slot with airline B: Can Airline B operate 747 using the exchanged slot.


I'm flying without wings!!!!!!!!
User currently offlineRwylie77 From United Kingdom, joined May 2004, 367 posts, RR: 2
Reply 8, posted (8 years 4 months 3 weeks 6 days 17 hours ago) and read 3713 times:

Due to this value, why do airlines still fly turbo props into heathrow? Surely due to the value of the slots, there is a size of aeroplane where an airline would make more money selling a slot than flying a 50 seat plane into the airport? Which are the airlines that predominantly fly turboprops into LHR?

User currently offlinePlanesarecool From United Kingdom, joined Nov 2001, 4121 posts, RR: 11
Reply 9, posted (8 years 4 months 3 weeks 6 days 16 hours ago) and read 3630 times:

Quoting Rwylie77 (Reply 8):
Due to this value, why do airlines still fly turbo props into heathrow? Surely due to the value of the slots, there is a size of aeroplane where an airline would make more money selling a slot than flying a 50 seat plane into the airport? Which are the airlines that predominantly fly turboprops into LHR?

Very few airlines do fly turboprops into LHR. KLM's odd F-50 flight is the only one i can think of. Other than that, in terms of regional aircraft LG and BMI some EMB-145 flights into LHR. Other than i think its all "mainline" aircraft

[Edited 2006-04-10 01:24:59]

User currently offlineCommavia From United States of America, joined Apr 2005, 11563 posts, RR: 62
Reply 10, posted (8 years 4 months 3 weeks 6 days 16 hours ago) and read 3625 times:

Quoting Rwylie77 (Reply 8):
Surely due to the value of the slots, there is a size of aeroplane where an airline would make more money selling a slot than flying a 50 seat plane into the airport?

Ahh, yes, yes, but what if said airlines flying props or small jets into LHR are merely holding on to their slots, knowing that if LHR is opened up and slots can be freely and openly bought and sold, their price will skyrocket!

Cheers.


User currently offlineANother From , joined Dec 1969, posts, RR:
Reply 11, posted (8 years 4 months 3 weeks 6 days 9 hours ago) and read 3404 times:

Quoting Commavia (Reply 10):
is opened up and slots can be freely and openly bought and sold

As I mentioned the UK courts have basically said that slots can be freely and openly bought and sold! The risk to an airline 'merely holding on to their slots' is that the EU will make it illegal, and then what do they have?


User currently offlinePlanesarecool From United Kingdom, joined Nov 2001, 4121 posts, RR: 11
Reply 12, posted (8 years 4 months 3 weeks 6 days 9 hours ago) and read 3380 times:

I believe there are only a limited amount of pre-6am arrival slots and any flights that don't hold these slots cannot land before 6am, even if they're due in at 6:20 and get in the area an hour early (unless they were desperately low on fuel, then they might make an exception). The next arrival slots come at 6:20am to give time for arrivals ahead of schedule. Due to the pre-6am slot restrictions, these slots must be pretty expensive.

User currently offlineN1120A From United States of America, joined Dec 2003, 26450 posts, RR: 75
Reply 13, posted (8 years 4 months 3 weeks 6 days 9 hours ago) and read 3372 times:

Quoting Jet-lagged (Reply 3):
If you have a smaller plane with fundamentatlly lower ticket prices, then the slot would be worth much less and you would be willing to pay much less.

What makes ticket prices fundamentally lower on a smaller plane. If you swap a 777 for a 767, you might be able to increase your yield because of the capacity reduction.

Quoting Commavia (Reply 10):
Ahh, yes, yes, but what if said airlines flying props or small jets into LHR are merely holding on to their slots, knowing that if LHR is opened up and slots can be freely and openly bought and sold, their price will skyrocket!

QF does just that with a BAe 146 that flies LHR-MAN



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineANother From , joined Dec 1969, posts, RR:
Reply 14, posted (8 years 4 months 3 weeks 6 days 9 hours ago) and read 3358 times:

Quoting N1120A (Reply 13):

QF does just that with a BAe 146 that flies LHR-MAN

That's been discussed in another thread. QF bought (exchanged) those slots but couldn't use them until their 5ths LHR-HKG came into effect - a couple of months at most.

What is silly is the 80% use-it or lose-it rule didn't allow for an exception in such a case. QF likely had some significant costs doing this, but if they didn't they would have had to return expensive slots back to the pool for nothing, or to sell them to another airline if they could find one.


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