In which SRB will moan and groan about a "monster monopoly" while ignoring his own mistakes over the years...
But seriously, congratulations to BA/AA/IB! I know that they have been working hard to make this happen. And I know that FWA supported this big-time, and that FWA's prez Tory Richardson worked to support oneworld trans-Atlantic ATI.
Let the reciprocal AAdvantage miles begin!
"Did he really need the triple bypass? Or was it the miles?"
aa1818 From Trinidad and Tobago, joined Feb 2006, 3478 posts, RR: 4
Reply 4, posted (5 years 5 months 2 weeks 6 days 12 hours ago) and read 17170 times:
Quoting DFWEagle (Thread starter): No carveouts are required. However, four pairs of LHR slots must be divested as a condition. The final decision will come after 60-day comment period
So four slots to be divested...hmmm. How significant is that for BA/AA/IB. Could those four slots be handed over without disrupting their operations. Great that there are no carve outs- I guess for BA and AA, that's the most important point!
“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
kiwiandrew From New Zealand, joined Jun 2005, 8754 posts, RR: 13
Reply 10, posted (5 years 5 months 2 weeks 6 days 11 hours ago) and read 16724 times:
That seems reasonable - the game has changed a lot since they first applied and LHR has opened up a lot . I am sure that there will be some who will argue there should have been carveouts ( DFW-LHR ? ) on the one side and on the other side some who will argue that there should be no slot divestiture but on the whole it seems to be something that everyone can live with to produce a reasonably level playing field . Assuming that BA/AA/IB/AY dont contest this ( and I think they would be crazy to do so ) let's get it up and running . It will be interesting to see who the 4 slot pairs go to and for which route . If I am not mistaken it says that they have to be for a "new services" - does that mean that an airline currently serving a route such as ATL-LHR or EWR-LHR cannot apply for them for extra frequencies on that existing route or am I reading something into the wording which is not actually there ? I would have thought that re-introducing CLE-LHR for CO might be a use for one pair and starting CLT-LHR for US could be another . On the side , it will be interesting to see what VS do ( other than a lot of loud moaning ) , will this finally be the tipping point for them to get off the fence and join an alliance ( presumably *A with the number of links they have to existing *A members such as CO NZ BD NH SQ etc ) .
Let the games begin !
Moderation in all things ... including moderation ;-)
DeltAirlines From United States of America, joined May 1999, 8950 posts, RR: 11
Reply 12, posted (5 years 5 months 2 weeks 6 days 11 hours ago) and read 16651 times:
Alone, I could see one slot coming from the morning BOS-LHR flight (AA currently has a 763, BA has a 777 - this will probably become one flight under the JV), another 1-2 from JFK-LHR (upgrade equipment to 747s, AA can still use the JFK slots to launch new TATL services which would benefit everyone under the JV), and then just finding another 1 or 2, which could even conceivably come from BA shorthaul services at LHR (I would think).
As for who would want the slots - I'm sure Delta, Continental and Virgin will all each want one. United might as well, but they do tend to lease slots out at LHR. US Airways might want to move CLT-LGW over to CLT-LHR and drop the Gatwick station.
Glad to see this happening though - it's a move that should benefit the vast majority of consumers. Given that AA has the 757s available for TATL services (something that BA does not have), it should allow for better capacity alignment in some markets (possibly BWI-LHR?), as well as potential new/resumed markets (maybe DTW-LHR or BDL-LHR?).
BigGSFO From United States of America, joined Jun 2005, 2992 posts, RR: 6
Reply 13, posted (5 years 5 months 2 weeks 6 days 11 hours ago) and read 16576 times:
Maybe two pairs to British airlines and two pairs to US. Which could mean VS could open up two new transatlantic flights (Dallas? Anyone? Anyone?) and then DL, CO, US and UA could lobby for one or two sets.
So are these slots simply "given up" and the recipients get them for free?
AAExecPlat From United States of America, joined Sep 2009, 669 posts, RR: 4
Reply 14, posted (5 years 5 months 2 weeks 6 days 11 hours ago) and read 16497 times:
First of all, congrats to AA/BA and all of us AA flyers who have been waiting for this for so many years. They deserve this ATI as much as any of the other alliances. The best news is that no carveouts are required and giving up 4 pairs of slots is a pittance relative to the value the ATI will deliver. That said, I surely hope AA/BA are not required to "give" them away as that would constitute monetary concessions north of $100MM. Obviously, it would still be worth it, but a steep amount of money to hand over to your competitors. I hope that the divestiture will be a sale or lease.
nyc2theworld From United States of America, joined Mar 2007, 680 posts, RR: 0
Reply 15, posted (5 years 5 months 2 weeks 6 days 11 hours ago) and read 16389 times:
Quoting AAExecPlat (Reply 14): First of all, congrats to AA/BA and all of us AA flyers who have been waiting for this for so many years. They deserve this ATI as much as any of the other alliances. The best news is that no carveouts are required and giving up 4 pairs of slots is a pittance relative to the value the ATI will deliver. That said, I surely hope AA/BA are not required to "give" them away as that would constitute monetary concessions north of $100MM. Obviously, it would still be worth it, but a steep amount of money to hand over to your competitors. I hope that the divestiture will be a sale or lease.
Making their competitors pay for the slots doesn't stop AA/BA from charging a ridliciuos rate and saying "Look DOT nobody wants the slots can we keep them?" They should be forced to give them away. If they are sure that ATI will add to their bottom line...those 4 slots shouldn't be a problem.
Always wonderers if this "last and final boarding call" is in fact THE last and final boarding call.
VV701 From United Kingdom, joined Aug 2005, 8243 posts, RR: 24
Reply 17, posted (5 years 5 months 2 weeks 6 days 10 hours ago) and read 16190 times:
The DoT statement when it says:
" . . . the Department is proposing in its show-cause order that the applicants make four pairs of slots available to competitors for new U.S.-Heathrow service."
is not specific as to exactly what it means by "four pairs of slots". I take it to mean four pairs of daily and not four pairs of weekly slots. This may sound paedantic but as many slots have been handed out for use on specific days of the week (as a visit to the slot co-ordinator's, Airport Coordination Ltd, web site will show) it is a cent to a dollar that AA and BA will argue that it means weekly and not daily slots. Recognise here that the last slots BA gained were 54 weekly LHR slots (27 slot pairs) from BD at a cost reported to be about £30 million.
If I am correct and this purchase is used as a yardstick, the value of the 56 weekly slots (i.e. 4 x 2 x 7) would also be about £30 million or $47.5 million.
The DoT is clearly saying the slots to be disposed of should be subsequently used for US-LHR services. How can they legally ensure this happens? Would BA or AA not be in breach of EU competition rules if they refused higher offers from airlines with no authority to serve American destinations from LHR?
I also assume from the wording of the DoT statement that they are not expecting AA/BA to give up four daily LHR-US flights but just the slots that would enable competitive airlines to fly LHR-USA. Of course it is easy to assume that other airlines will leap at the chance of obtaining such slots. But hold on a minute. Did not AF/DL have total freedom of choice as to where they used the daily slot pair they allocated to the short-lived AF LHR-LAX service. Yet after one season they cancelled the service and now use that slot pair to operate LHR-CDG. But I guess that as long as AA/BA are allowed to sell the four slot pairs at market prices they can always buy them back if they are put back on the market.
When BA wanted to move their LGW-IAH services to LHR on the implementation of the Openskies agreement they chose to find the slots by moving their three-times-daily LHR-WAW service to LGW. (Two flights were moved back to LHR on the purchase of the above-mentioned 54 weekly slots and the third flight was started from LCY.) Which service should BA give up to free up the four slot pairs?
avek00 From United States of America, joined Oct 2004, 4469 posts, RR: 20
Reply 18, posted (5 years 5 months 2 weeks 6 days 10 hours ago) and read 16192 times:
Might as well quote some passages from the DOT Show Cause Order to dispel a few a.net mythologies on the spot:
"For the passengers traveling to/from Europe, the evidence shows that Heathrow is uniquely situated. We agree with Virgin Atlantic’s assessment that “[a]lthough Heathrow attracts a robust share of connecting transatlantic traffic from other major European hubs, the converse is not true. Very few passengers originating in London, or at Heathrow, travel to the United States via other points in Europe.”
With regard to Heathrow services, we believe the evidence as a whole shows that:
- Business passengers exhibit a strong preference for using Heathrow versus the other international airports in London, based largely upon Heathrow’s location and pattern of service. Virgin Atlantic states that
"[t]here are many reasons why time-sensitive passengers in particular do not view flights operated from Gatwick as substitutes for Heathrow service. The most important attraction of Heathrow to time-sensitive passengers is its convenient schedules, greater frequency of flights and its extensive range of flight connections. Passengers know that if they miss a flight at Heathrow there is a good chance that they can catch a later flight, whereas at other London airports, a missed flight may mean an overnight wait or a journey to Heathrow to catch an alternative."
The counterargument – that Gatwick and other airports are true substitutes for Heathrow for transatlantic service – is not compelling. Documents submitted by the applicants show that Heathrow is a separate market that is more convenient to business travelers and more suitable for launching long-haul services due to its hub and ground infrastructure.
- The preference for business passengers to use Heathrow is strong enough that many travelers will choose to fly on a connecting itinerary out of Heathrow instead of a nonstop itinerary out of Gatwick. By a three-to-one margin, passengers in the U.S.-U.K. market travel to/from Heathrow even when alternative Gatwick service is available.
DFWEagle From United States of America, joined Dec 2006, 1077 posts, RR: 8
Reply 19, posted (5 years 5 months 2 weeks 6 days 10 hours ago) and read 16068 times:
Quoting LDVAviation (Reply 5): What are the conditions placed on the sale of these slot? I assume they will be allowed to sell them? Do the slots have to be for the peak Transatlantic travel windows?
The slots must be suitable for peak transatlantic travel and can be sold or leased for 10 years. AA/BA may collect only 'limited compensation', for them. Two slots pairs MUST be used by competitors for BOS-LHR and the other two can be used for any route. They may not be used by any carrier in the oneworld alliance. If no competitor wants them, then they will be kept by BA/AA.
avek00 From United States of America, joined Oct 2004, 4469 posts, RR: 20
Reply 20, posted (5 years 5 months 2 weeks 6 days 10 hours ago) and read 16048 times:
Regarding the slot divestitures:
We tentatively find that slot transfers would best address the potential competitive harm in this
case. We tentatively determine that four slot pairs are necessary to remedy the potential harm,
divided as follows: two slot pairs earmarked for the Boston-London Heathrow market (the “fixed
slots”) and two slot pairs to be used at any U.S. gateway for services in the U.S.-Heathrow market
(the “flex slots”). Under this proposal, prospective new entrants would not be forced to compete
where oneworld is strongest, such as in the Dallas/Ft. Worth-London market. Rather, they would
be able to serve routes in which they have a greater chance of success and a greater opportunity to
exert competitive discipline on the oneworld network.
This proposed approach would serve the public interest because it addresses the lost
competition, particularly where it is most acute, in the Boston-London market, while also
addressing the diffuse network-level effects of the proposed alliance across all U.S.-London
markets, such as oneworld’s superior network coverage, frequency, and ability to attract highyield
business traffic. This approach would also improve the chances that the slot pairs will be
utilized and that new capacity will be added to the U.S.-London market. Meanwhile, the
applicants can proceed with their alliance plans and deliver the promised public benefits.
We recognize that more information is needed to implement the proposed remedy. We are
proposing a general framework for implementation. Mindful of DOJ’s comments, urging us to
avoid inefficiencies, we tentatively determine that an implementation mechanism should comport
with the following principles:
Airlines are not eligible recipients if they are members of the oneworld global alliance,
affiliates of the applicants, or airlines in which the applicants have a substantial
The fixed and flex slots must be usable for transatlantic service and have commercially
Given that there is some scope for airlines to adjust their portfolios once they receive
slots or eventually acquire slots through other means, we tentatively find that the
applicants need not permanently divest their ownership rights in the four slot pairs
subject to the remedy. Thus, the applicants may elect to lease, rather than sell, the slots,
and collect limited compensation. We expect the compensation to be at such a level so
as to attract prospective new entrants by lowering the barriers to entry below where
they are today. We are proposing that the applicants make the slots available for a
period of 10 years from the date of issuance of a final order in this case. The slots
would be made available in time for recipients to launch services in the IATA 2011
Summer Season. If slots were not used initially, or if they were returned to the
applicants, they would remain available for the full 10-year period.
The proposed remedy should be administered expeditiously and independently. While
we intend to exercise some oversight and monitor the process, we do not seek to
administer the day-to-day tasks. We tentatively find that the applicants should appoint
and pay for the services of a trustee, who must be approved by DOT.
To the extent possible, the administration and implementation should be compatible
with any remedy adopted by the European Commission, which is also reviewing this
matter. Both the Department and the European Commission committed to explore
compatible approaches to common matters in Annex 2 of the U.S.-EU Agreement.89
Annex 2 was incorporated because both parties to the agreement recognized that
incompatible approaches could frustrate the effective exercise of the parties’ regulatory
responsibilities. In the context of this case, it is possible that incompatible
implementation and administration of a slot remedy could potentially place prospective
new entrants at a disadvantage, jeopardizing efforts to reduce the competitive harm that
we have tentatively found in the proposed transaction.
Cubsrule From United States of America, joined May 2004, 23879 posts, RR: 21
Reply 21, posted (5 years 5 months 2 weeks 6 days 10 hours ago) and read 16025 times:
All in all, as many have said, this is about as good as AA/BA could have expected.
Quoting DeltAirlines (Reply 12): Alone, I could see one slot coming from the morning BOS-LHR flight (AA currently has a 763, BA has a 777 - this will probably become one flight under the JV), another 1-2 from JFK-LHR (upgrade equipment to 747s, AA can still use the JFK slots to launch new TATL services which would benefit everyone under the JV), and then just finding another 1 or 2, which could even conceivably come from BA shorthaul services at LHR (I would think).
ORD-LHR could also probably be the source of a slot pair - probably one of the ones used for a 1700-ish departure from ORD and 0630-ish arrival at LHR.
Quoting DFWEagle (Reply 19): Two slots pairs MUST be used by competitors for BOS-LHR and the other two can be used for any route.
No one will want 2 slots for BOS-LHR - DL is the only even remote possibility, and I don't see them doing it.
I can't decide whether I miss the tulip or the bowling shoe more
avek00 From United States of America, joined Oct 2004, 4469 posts, RR: 20
Reply 24, posted (5 years 5 months 2 weeks 6 days 10 hours ago) and read 15852 times:
The most interesting take-away from the Show Cause Order is this paragraph:
"Because the scope for new entry is limited, we tentatively find that the infrastructure constraints at Heathrow could exacerbate the potential competitive harm caused by the proposed alliance. If approved, an immunized oneworld would hold 47.2% of Heathrow slots, including a large share of slots usable for transatlantic service. We believe that this factor, more than the loss of a competitor in the transatlantic market or any specific competitive effects in a city pair, poses
the greatest risk of harm for consumers. Without more and easier access to Heathrow slots,
competing carriers would find it difficult to introduce new services to compete with an immunized
This paragraph is intriguing because historically, the DOT does not consider the market share held by an airline at a particular airport, absent more, to be a significant consideration in its analysis.
Live life to the fullest.
: Great news, although I don't understand slotting. I thought a slot was a slot, no matter whether it is domestic or international. I would imagine AA