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DL's Puchase Of NYC To LON Route-unnecessary?  
User currently offlineA2 From United States of America, joined May 2001, 39 posts, RR: 0
Posted (7 years 5 months 4 days 16 hours ago) and read 3848 times:

Did a search and could not find this discussion.

DL recently purchased the rights the fly from JFK to LGW from UA. Given that US EU open skies could very likely be approved soon. And given that if approved, DL will have open access to this route anyway, was the route purchase by Delta a mistake? Should they have just waited a while longer?

Does anyone know how much DL bought the rights for?

A2

20 replies: All unread, jump to last
 
User currently offlineJonnyWishbone From United Kingdom, joined Jan 2007, 143 posts, RR: 0
Reply 1, posted (7 years 5 months 4 days 16 hours ago) and read 3841 times:

I'd say so, especially as it's to LGW where nobody flies unless they're carrying a straw hat and a donkey under their arm and love a 28" charter seat pitch!

User currently offlineMastaHanky From United States of America, joined May 2006, 264 posts, RR: 0
Reply 2, posted (7 years 5 months 4 days 16 hours ago) and read 3822 times:

I believe there was a clause in the original agreement providing a refund of some of the purchase amount if Open Skies happened within two or three years.

User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 3, posted (7 years 5 months 4 days 16 hours ago) and read 3765 times:

DL paid $13M up front and $2 per year for the next several years unless DL or other carriers gained access to LHR. Since DL will gain the access in about a year, yes, the expense was probably not needed. Remember though that we have heard promises of access to LHR for other US carriers for years to no avail so DL's move did seem prudent at the time.

There will be some benefit to DL's NYC presence by having access to LON now, even if it is LGW, because they were unable to get some corporate business because AA and CO had access to LON and DL did not. Overall, though, the cost would be hard to justify if the current situation was known.

It will be interesting to see how AA and UA fare against CO and DL w/ access to LHR. CO and DL have much more extensive European networks already and both have a very strong presence in the NE; gaining LHR access will put them in a much stronger presence relative to AA and UA. UA particularly will be very vulnerable.

DL will undoubtedly have LHR access from ATL and JFK and possibly BOS as well which will give them very strong LHR presence from the greatest number of cities on the East Coast - even w/ connections.


User currently offlineLogos From United States of America, joined Jan 2000, 793 posts, RR: 1
Reply 4, posted (7 years 5 months 4 days 14 hours ago) and read 3537 times:

Quoting WorldTraveler (Reply 3):
DL will undoubtedly have LHR access from ATL and JFK and possibly BOS as well which will give them very strong LHR presence from the greatest number of cities on the East Coast - even w/ connections.

I wouldn't say this is a done deal with open skies as there is the small issue of available slots at LHR. How those get apportioned will be very interesting.

Cheers,
Dave in Orlando



Too many types flown to list
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 5, posted (7 years 5 months 4 days 14 hours ago) and read 3520 times:

there have been rumors for a number of years that CO, DL, and NW have agreements w/ some of their European partners to buy or lease slots from them. I would think there is some validity to them or those 3 carriers would be jumping up and down saying it is all unfair - which is what they did a couple years ago when they demanded slots at LHR as part of the package that never saw the light of day in the EU.

User currently offlineAirTranTUS From , joined Dec 1969, posts, RR:
Reply 6, posted (7 years 5 months 4 days 13 hours ago) and read 3397 times:

Quoting JonnyWishbone (Reply 1):
I'd say so, especially as it's to LGW where nobody flies unless they're carrying a straw hat and a donkey under their arm and love a 28" charter seat pitch!

How informative.  Yeah sure

And incorrect seeing as BA, CO, DL, NW, and AA all fly many passengers from the US into that airport in much more than 28" pitch. Since you are from Britain you know more about the charters that do operate out of LGW than I do, but you should know that those flights are not all. I'm sure CO and DL elites enjoy being characterized by what you just said.


User currently offlineCommavia From United States of America, joined Apr 2005, 11523 posts, RR: 61
Reply 7, posted (7 years 5 months 4 days 13 hours ago) and read 3374 times:

Quoting WorldTraveler (Reply 3):
It will be interesting to see how AA and UA fare against CO and DL w/ access to LHR. CO and DL have much more extensive European networks already and both have a very strong presence in the NE; gaining LHR access will put them in a much stronger presence relative to AA and UA. UA particularly will be very vulnerable.

I think both AA and United will do just fine. Sure, Continental and Delta are big, but so are AA and United. AA carried about 10% more passengers to Europe than Continental last year, and about 15% less than Delta. That's hardly insurmountable. In addition, while both Continental and Delta both have a large presence in the northeast, so does AA. AA, after all, is still JFK's second-largest airline after JetBlue and is still the New York metro area's #2 airline after Continental. And yes, Continental and Delta will be able to generate revenue by offering a wider range of nonstop flights to more European cities out of New York, but AA has an incredibly loyal (and immensely huge) frequent flyer and corporate contract presence in the Tri-State area.

In addition, the AA-BA tie-up, which may get a lot closer because of this deal, will go a long way in helping AA recoup lost revenue from Continental and Delta eroding yields at Heathrow.

I agree, though, that United is definitely more vulnerable than AA.


User currently offlineSunriseValley From Canada, joined Jul 2004, 4940 posts, RR: 5
Reply 8, posted (7 years 5 months 4 days 13 hours ago) and read 3336 times:

Quoting Logos (Reply 4):
I wouldn't say this is a done deal with open skies as there is the small issue of available slots at LHR. How those get apportioned will be very interesting.

I am not sure where you get the idea that there will be some form of apportioning. I don't believe that there will be any automatic rights to slots at LHR just because a carrier gets the rights to fly there under the new accord. . As I understand it the new carriers will have to go and buy slots the same as others have had to do before them.


User currently offlineRichierich From United States of America, joined Nov 2000, 4247 posts, RR: 6
Reply 9, posted (7 years 5 months 4 days 12 hours ago) and read 3283 times:

What a great question!
It does sound like they paid money for a route they could have flown for free in a few years anyway. However, as pointed out earlier, the deal has not been finalized and we do not know the terms or conditions (i.e., is it effective immediately, or will it be rolled out in 2-5 years?)

On a side note, I haven't seen much in the way of advertising for DL's JFK-LGW route - I'm sure there is a small case of Heathrow-envy at DL but Gatwick is perfectly fine for most people who have business in the centre of London. I don't mind LHR and I understand it is the main airport for London, but I honestly find LGW just as convenient if my intended destination is in London or The South of England (and I prefer MAN for anything in the Midlands).



None shall pass!!!!
User currently offlineRDUDDJI From Lesotho, joined Jun 2004, 1468 posts, RR: 3
Reply 10, posted (7 years 5 months 4 days 12 hours ago) and read 3285 times:

Quoting WorldTraveler (Reply 3):
It will be interesting to see how AA and UA fare against CO and DL w/ access to LHR. CO and DL have much more extensive European networks already and both have a very strong presence in the NE; gaining LHR access will put them in a much stronger presence relative to AA and UA. UA particularly will be very vulnerable.

CO and DL will be more vulnerable at LHR than UA. UA is already established on the LHR-UA hub routes. The only route they were really vulnerable on was NYC-LHR and they already conceded that market and sold the route to DL (which was a master stroke now that O.S. appears to be getting approved anyway).

Furthermore UA already competes with other carriers on the LHR-IAD/ORD/LAX/SFO routes and fares just fine. Plus all of those competitors are also carriers with entrenched ties to LHR.



Sometimes we don't realize the good times when we're in them
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 11, posted (7 years 5 months 4 days 12 hours ago) and read 3217 times:

RDU,
US carriers who do the best to Europe are those with a strong east coast presence. UA doesn't have it other than at IAD which is one of the smaller eastern US hubs; NW doesn't have it and they make up for it by having a strong alliance w/ KLM and feeding traffic to/from each other. AA carries more traffic from ORD to LHR than UA does even though UA is headquartered in CHI and has a bigger hub.

Half of UA's European system involves its flights to/from LHR. UA is vulnerable and is supporting this deal only because it presents the real possibility that UA might be bought by Europeans in a couple of years. Even though UA's bankruptcy was not nearly as effective as other carriers in getting costs down and balance sheet cleaned up, there are European carriers that will salivate at getting the opportunity to acquire UA. Count on it.

As for AA, Commavia, their vulnerability comes from the fact that LHR was the one real advantage they had over CO and DL and that will be eliminated. AA also has higher costs. The BA relationship may help AA but remember that both are at risk in this deal and it is highly possible that AA and BA will come to very different solutions to how to win in the new environment; BA's interest in flying NYC transcons doesn't seem like it would be in AA's interests. AA is also not growing its int'l network, which does make it more vulnerable. Yes they do have a strong NYC presence but their advantages are quickly being eliminated.


User currently offlinePlanesarecool From United Kingdom, joined Nov 2001, 4121 posts, RR: 11
Reply 12, posted (7 years 5 months 4 days 12 hours ago) and read 3151 times:

Quoting AirTranTUS (Reply 6):
How informative.

And incorrect seeing as BA, CO, DL, NW, and AA all fly many passengers from the US into that airport in much more than 28" pitch. Since you are from Britain you know more about the charters that do operate out of LGW than I do, but you should know that those flights are not all. I'm sure CO and DL elites enjoy being characterized by what you just said.

Ignore him. He's just part of the 'Im-not-from-London-and-am-annoyed-that-my-local-airport-doesn't-receive-the-same-service-that-London-does-so-therefore-i-hate-London' club. Which is slightly strange, seeing as the airport that most people like him seem to be a fan of, Manchester, has a greater % of charter flights compared to total flights, than LGW.

Quoting Richierich (Reply 9):
On a side note, I haven't seen much in the way of advertising for DL's JFK-LGW route

Over this side of the pond, the advertisement for the JFK-LGW route is plastered all over the Gatwick Express, both inside and out.


User currently offlineRichierich From United States of America, joined Nov 2000, 4247 posts, RR: 6
Reply 13, posted (7 years 5 months 4 days 11 hours ago) and read 3132 times:

Quoting Planesarecool (Reply 12):
Over this side of the pond, the advertisement for the JFK-LGW route is plastered all over the Gatwick Express, both inside and out.

Nice! I admit that I am not down in JFK on much of a regular basis, but I do ride mass transit frequently and I don't recall seeing a DL ad anywhere that specifically mentions the Gatwick route.

Quoting WorldTraveler (Reply 11):
RDU,
US carriers who do the best to Europe are those with a strong east coast presence. UA doesn't have it other than at IAD which is one of the smaller eastern US hubs; NW doesn't have it and they make up for it by having a strong alliance w/ KLM and feeding traffic to/from each other. AA carries more traffic from ORD to LHR than UA does even though UA is headquartered in CHI and has a bigger hub.

Half of UA's European system involves its flights to/from LHR. UA is vulnerable and is supporting this deal only because it presents the real possibility that UA might be bought by Europeans in a couple of years. Even though UA's bankruptcy was not nearly as effective as other carriers in getting costs down and balance sheet cleaned up, there are European carriers that will salivate at getting the opportunity to acquire UA. Count on it.

As for AA, Commavia, their vulnerability comes from the fact that LHR was the one real advantage they had over CO and DL and that will be eliminated. AA also has higher costs. The BA relationship may help AA but remember that both are at risk in this deal and it is highly possible that AA and BA will come to very different solutions to how to win in the new environment; BA's interest in flying NYC transcons doesn't seem like it would be in AA's interests. AA is also not growing its int'l network, which does make it more vulnerable. Yes they do have a strong NYC presence but their advantages are quickly being eliminated.

I don't know how much of what you say will actually happen but it sounds like the Open Skies agreement could have the biggest affect on US airlines (if not all airlines from the northern hemisphere) since the deregulation era in the US in the 1970s. Geez. What a freaking mess it could become... sort of makes the idea of allowing VA to fly or not fly seem a bit trite and meaningless.



None shall pass!!!!
User currently offlinePlanesarecool From United Kingdom, joined Nov 2001, 4121 posts, RR: 11
Reply 14, posted (7 years 5 months 4 days 11 hours ago) and read 3072 times:

Quoting Richierich (Reply 13):
Nice! I admit that I am not down in JFK on much of a regular basis, but I do ride mass transit frequently and I don't recall seeing a DL ad anywhere that specifically mentions the Gatwick route.

Perhaps this shows that they are hoping to attract more people from over here to fly with them, and they are relying on the fact that they are already a large figure at JFK, and therefore don't need to do much advertising over there?

What is quite amusing is that before DL started the JFK route, it was CO who had advertisements plastered all over the Gatwick Express (although not on every train) about their EWR route. Now DL are doing exactly the same for their JFK route.


User currently offlinePanamair From United States of America, joined Oct 2001, 4895 posts, RR: 25
Reply 15, posted (7 years 5 months 4 days 11 hours ago) and read 2995 times:
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Quoting Richierich (Reply 13):
I don't recall seeing a DL ad anywhere that specifically mentions the Gatwick route.

It's part of those "Cheat On New York" ads they have been posting over town...one of them specifically refers to the JFK-LGW route...

Quoting Planesarecool (Reply 14):
Perhaps this shows that they are hoping to attract more people from over here to fly with them

DL has been filling the LGW-JFK with quite a few Brits especially on the Thu/Fri/Sat outbounds and Sun/Mon/Tue returns for quick weekend trips to NYC. Yields are obviously not too great but the loads are decent.


User currently offlineJfk777 From United States of America, joined exactly 8 years ago today! , 8325 posts, RR: 7
Reply 16, posted (7 years 5 months 4 days 10 hours ago) and read 2961 times:
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Delta got the missig link in its system from JFK to Europe at little cost, no one knew when "Open Skies" was going to occur. This summer they will have two daily 767 to LGW so they are doing alright. LHR might require an edge with a better product or bigger airplanes like 777.

User currently offlineGkirk From UK - Scotland, joined Jun 2000, 24924 posts, RR: 56
Reply 17, posted (7 years 5 months 4 days 10 hours ago) and read 2924 times:

Quoting JonnyWishbone (Reply 1):
I'd say so, especially as it's to LGW where nobody flies unless they're carrying a straw hat and a donkey under their arm and love a 28" charter seat pitch!

Blah?

[Edited 2007-03-23 00:46:15]


When you hear the noise of the Tartan Army Boys, we'll be coming down the road!
User currently offlineUN_B732 From United States of America, joined Jul 2001, 4289 posts, RR: 4
Reply 18, posted (7 years 5 months 4 days 10 hours ago) and read 2864 times:

I keep on hearing the rumor that AF is going to surrender some slots so DL can move JFK to LHR and then work on moving ATL.
-A



What now?
User currently offlineDeltasju777 From Puerto Rico, joined Feb 2006, 65 posts, RR: 0
Reply 19, posted (7 years 5 months 4 days 8 hours ago) and read 2748 times:

Quoting Jfk777 (Reply 16):

A good reason for DL to order the 773.


User currently offlineAirCanada014 From Canada, joined Oct 2005, 1513 posts, RR: 0
Reply 20, posted (7 years 5 months 4 days 8 hours ago) and read 2738 times:

I see theres another post saying CO files for LHR. I wish them luck as for DL for LHR I don't think they will have it.

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