jfk777 From United States of America, joined Aug 2006, 7348 posts, RR: 7 Reply 1, posted (2 months 3 weeks 2 days 15 hours ago) and read 10312 times:
Why would Jet Airways sell 3 slots at its most important international destination. IF things are so bad they have to sell their LHR slots they should dump all their 77W and A330 and be a regional airline.
LAXintl From United States of America, joined May 2000, 22053 posts, RR: 51 Reply 2, posted (2 months 3 weeks 2 days 15 hours ago) and read 10246 times:
Well things are not too bright for Jet at the moment.
They are for sale - and Etihad continues to be a rumored partner.
Also they have for many years now been leasing out much of their 777 fleet - to Turkish then Thai.
Here is a story from this week - After Vijay Mallya‘s Kingfisher fall, they now say Naresh Goyal and his Jet are facing a bleak future.
VV701 From United Kingdom, joined Aug 2005, 6626 posts, RR: 17 Reply 3, posted (2 months 3 weeks 2 days 13 hours ago) and read 9877 times:
Quoting LAXintl (Thread starter): Now Etihad has purchased 3 slot pairs for $70mil from Jet Airways.
There is probably more in this than meets the eye. This may have something to do with the proposed EY investment in 9W. It may be a way of injecting temporary or a mix of temporary and permanent capital into 9W that will be recovered or partly recovered over the next three years as 9W leases the tree daily slot pairs slots back from EY.
suggests that the final price paid by IAG to Lufthansa Group for BD (after rebates on the offer price of £172.5 million to allow for the disposal of bmi Regional at only £8 million - against its valuation of £20 million - and the costs of closing down bmiBaby) was €101 million. Assuming that the value of BD was no more and no less than the value of its 54 LHR slot pairs, this prices them at less than €2 million per slot pair or significantly less than $25 reportedly paid by EY for each 9W slot pair. Also note that the unsuccessful VS bid for BD at £50 million is less than £1 million for each slot pair, although that was probably not a serious but a spoiling bid.
HB-IWC From Greece, joined Sep 2000, 4414 posts, RR: 76 Reply 4, posted (2 months 3 weeks 2 days 11 hours ago) and read 9599 times:
No matter what is behind it, this deal is not without lots of risk for 9W. Although it is leasing the slots back from EY for 3 years, if in the mean time the 9W-EY relationship turns sour, it could find itself without access to its prime international gate way in 3 years.
9W is currently holding a prevcious 7 am arrival slots combined with a 10 am departure slots as well as 2 later afternoon arrivals slots linked to two 9 pm departure slots. A lots of airlines can be expected to be willing to pay top dosh for some of these slots pairs. I feel that the morning arrival slots is particularly invaluable.
On the issue of the 9W widebody fleet, I wonder what is the airline's plan. It is currently taking delivery of a number of A333 frames, and in a while some of the leased out B77Ws at TG will come off lease as TG takes delivery of its own 77Ws. Meanwhile, 9W keeps shrinking its longhaul operation with MXP now closed and BRU JFK abandoned. That will inevitably leave the airline with excess widebody capacity. Is there anyway something about earlier rumors of a new temporary lease of B77W frames to TK?
Azure From France, joined Dec 2012, 208 posts, RR: 0 Reply 5, posted (2 months 3 weeks 2 days 4 hours ago) and read 8888 times:
Quoting HB-IWC (Reply 4): No matter what is behind it, this deal is not without lots of risk for 9W. Although it is leasing the slots back from EY for 3 years, if in the mean time the 9W-EY relationship turns sour, it could find itself without access to its prime international gate way in 3 years.
According to AF (which has signed a partnership with EY), should the deal between EY and 9W be concluded, 9W may well join Skyteam and move its continental European operations from BRU to either CDG or AMS. In such case LHR would not remain as crucial as it is right now for 9W.
skipness1E From United Kingdom, joined Aug 2007, 2377 posts, RR: 0 Reply 6, posted (2 months 3 weeks 2 days 4 hours ago) and read 8774 times:
Quoting Azure (Reply 5): In such case LHR would not remain as crucial as it is right now for 9W.
Well you either serve the biggest international gateway in Europe or you don't. Saying it's fine cause you need to focus on a.n.other is mere spin. London is too big a market to simply wander off from.
HB-IWC From Greece, joined Sep 2000, 4414 posts, RR: 76 Reply 7, posted (2 months 3 weeks 2 days 3 hours ago) and read 8730 times:
Quoting Azure (Reply 5): In such case LHR would not remain as crucial as it is right now for 9W.
Really? As far as I can see, moving the Brussels scissor hub to Amsterdam or Paris doesn't make the slightest difference at all. Heathrow is Europe's number one market from India and 9W giving up on serving that market nonstop and instead routing is passengers through Amsterdam or Paris will render it uncompetitive for that part of the market where the money is to be made.
Azure From France, joined Dec 2012, 208 posts, RR: 0 Reply 8, posted (2 months 3 weeks 2 days 3 hours ago) and read 8677 times:
Quoting skipness1E (Reply 6): Well you either serve the biggest international gateway in Europe or you don't. Saying it's fine cause you need to focus on a.n.other is mere spin. London is too big a market to simply wander off from.
I can bluntly reply you either serve the 2nd and 3rd gateways in Europe (CDG and AMS) or you don't ! LHR is certainly not the best hub in terms of connectivity for any airline.
Of course "London is too big a market to simply wander off from" for an Indian carrier, but serving CDG or AMS and simultaneously join ST would open a wide range of opportunities that would lessen the role of LHR for 9W . Just my two cents. You have the right to disagree.
Azure From France, joined Dec 2012, 208 posts, RR: 0 Reply 9, posted (2 months 3 weeks 2 days 3 hours ago) and read 8626 times:
Quoting HB-IWC (Reply 7): Really? As far as I can see, moving the Brussels scissor hub to Amsterdam or Paris doesn't make the slightest difference at all.
Are you serious ? Are you really comparing BRU with CDG or AMS ?!
Quoting HB-IWC (Reply 7): that part of the market where the money is to be made.
Are you sure ? The LHR - India Route is probably one of the most competitive out of the UK...
Anyway, please refer to my previous post #8 and do not try to make me say LHR is unimportant.
HB-IWC From Greece, joined Sep 2000, 4414 posts, RR: 76 Reply 10, posted (2 months 3 weeks 2 days 3 hours ago) and read 8570 times:
Quoting Azure (Reply 9): Are you serious ? Are you really comparing BRU with CDG or AMS ?!
Yes I am serious. Whether 9W hands over a number of Europe bound passengers to SN through the extensive interline deal it currently has in place, or to AF or KL through what will likely be a codeshare arrangement, will ultimately make not much of a difference, as the main purpose of the scissor hub is to feed 9W's own India to North America flights.
With regard to Heathrow, while the market may well be very competitive, 9W will entirely lose out on any higher yielding traffic it can now cater to, as these people will surely move to nonstop alternatives. To say that 9W will be able to serve Heathrow through an AF or KL codeshare arrangement involving a transfer in Amsterdam or - God forbid - Paris without losing out on its current market position is not very realistic.
jumpjets From United Kingdom, joined Apr 2012, 471 posts, RR: 0 Reply 11, posted (2 months 3 weeks 2 days 2 hours ago) and read 8394 times:
Quoting VV701 (Reply 3): Assuming that the value of BD was no more and no less than the value of its 54 LHR slot pairs, this prices them at less than €2 million
You have to remember that IAG bought the company and not just the landing slots - so you can't just divide the price paid by the number of slots.
An acquiring company looks at a whole host of factors - fair value of assets, liabilities, future trading prospects and so on. The 'value' of the slots would be integral to the price decision but not by any means the only factor.
If you look at note 13 to the IAG condensed accounts published yesterday you will see that the fair value attributed to the landing rights acquired from business combinations was £499m. I can't recall any other business combination within IAG this year besides the BMI acquisition. Assuming that to be the case and assuming that's based on BA retaining approx 42 slots after the EU required divestment has taken place that gives an average of £11.9m or approx $19m per slot. So allowing for the fact that the value of slots will vary with their time of day, and for 'bulk discount' that compares reasonably well with the $23.3m per slot apparently paid by Etihad.
I read elsewhere on a.net that AZ are thinking of selling some LHR slots to help them keep afloat - it will be interesting to see what they get for theirs. They did this in 2007 when in financial trouble before and the FT reported then that they sold one pair of slots for £30m - so on that basis Etihad's $23.3m is a bargain!
Azure From France, joined Dec 2012, 208 posts, RR: 0 Reply 12, posted (2 months 3 weeks 2 days 2 hours ago) and read 8296 times:
Quoting HB-IWC (Reply 10): Whether 9W hands over a number of Europe bound passengers to SN through the extensive interline deal it currently has in place, or to AF or KL through what will likely be a codeshare arrangement, will ultimately make not much of a difference
I really have to disagree. AF and KL serve far more destinations with far more frequencies than SN, not only in Europe but worldwide, notwithstanding possible codeshare agreements with other ST members at either AMS or CDG !
Concerning this latter as a hub, all ST airlines are now using the new 2E and 2F terminals, that offers a much better experience to the connecting pax than BRU or LHR !
Once again I have never said that 9W should leave LHR, but you seem to keep saying the contrary, for God knows what reason !
In any case, whatever it may imply, the 9W / EY rumored partnership is already praised by the markets rather than the status quo you seem to plead for.
skipness1E From United Kingdom, joined Aug 2007, 2377 posts, RR: 0 Reply 13, posted (2 months 3 weeks 2 days 1 hour ago) and read 8210 times:
Quoting Azure (Reply 8): I can bluntly reply you either serve the 2nd and 3rd gateways in Europe (CDG and AMS) or you don't ! LHR is certainly not the best hub in terms of connectivity for any airline.
It has the largest O&D by far and given former colonial ties with India, if Jet Airways cannot succeed in THAT market they will fail. I am not even mentioning hub connectivity, they can't even get the basic A to B part right, much like Air India and Kingfisher. Endemic and institutional corruption and incompetence = India.
VV701 From United Kingdom, joined Aug 2005, 6626 posts, RR: 17 Reply 14, posted (2 months 3 weeks 2 days 1 hour ago) and read 8194 times:
Quoting Azure (Reply 8): LHR is certainly not the best hub in terms of connectivity for any airline.
Incorrect. There can be absolutely no doubt at all that LHR is by far and away the best hub in terms of connectivity for at least two airlines, BA and VS. We could discuss how this applies to other airlines. Here the indisputable background would be that it is Europe's largest hub. In 2012 passenger numbers were:
LHR: 70.0M
CDG: 61.5M
FRA: 57.3M
AMS: 51.0M
So one question that would need to be addressed is "Why is it Europe's largest hub?" if it really is so bad for connectivity,
As determined by numbers of international passengers it is also probably number one in the world. Here it is worth noting that of the ten largest routes across the North Atlantic determined by the numbers of seats offered by all airlines, no less than seven involve LHR. And the three that do not, CDG-JFK, ORY-FDF and ORY-PTP, include two routes that likely have relatively low levels on international connectivities as they operate out of what is not one of the larger international hubs, ORY. So again this beggars the question "Why is LHR so pre-eminent?" when possibly more international passengers connect trough it than any other airport.
Of course other hubs do offer connections to more destinations than LHR does. But that apparently does not deter passengers from choosing to use it to access many destinations.
rutankrd From United Kingdom, joined Sep 2003, 1998 posts, RR: 5 Reply 15, posted (2 months 3 weeks 2 days 1 hour ago) and read 8157 times:
Quoting skipness1E (Reply 13): It has the largest O&D by far and given former colonial ties with India, if Jet Airways cannot succeed in THAT market they will fail. I am not even mentioning hub connectivity, they can't even get the basic A to B part right, much like Air India and Kingfisher. Endemic and institutional corruption and incompetence = India.
Agreed one wonders why the UK has chosen to sponsor India in the BRIC race at all !
Azure From France, joined Dec 2012, 208 posts, RR: 0 Reply 16, posted (2 months 3 weeks 2 days ago) and read 7950 times:
Quoting skipness1E (Reply 13): It has the largest O&D by far and given former colonial ties with India, if Jet Airways cannot succeed in THAT market they will fail
I agree for the first part of your statement, while the second is purely hypothetic. In my initial post (#5), I mentioned the possibility for 9W to join ST and move their continental hub from BRU to either CDG or AMS which in my view would be a positive decision for 9W as the growth generated by this operation would compensate the loss of traffic at LHR if EY was to use all or some 9W slots there.
Quoting VV701 (Reply 14): Incorrect. There can be absolutely no doubt at all that LHR is by far and away the best hub in terms of connectivity for at least two airlines, BA and VS. We could discuss how this applies to other airlines. Here the indisputable background would be that it is Europe's largest hub. In 2012 passenger numbers were:
LHR: 70.0M
CDG: 61.5M
FRA: 57.3M
AMS: 51.0M
I agree with your figures but they do not prove LHR is a better hub than CDG, FRA or AMS : they just show that LHR has more passengers - and not necessarily connecting passengers - than the other airports. As skipness1E stated, LHR has certainly the largest O & D, but I am questioning it has the largest number of connecting passengers.
From a passenger point of view, a hub is interesting not by the number of total passengers it can handle in a year but by the number of connections this passenger can get in a limited time frame (generally 3/4 hours max).
For that matter, please check these figures I have found in an interesting report :
Furthermore, should LHR remain slot constrained, at current rate of growth, CDG will overpass LHR within 10 or 15 years I believe (but please tell me if I wrong). Some other figures from the same report :
So one question that would need to be addressed is "Why is it Europe's largest hub?"
IIRC, LHR is at 30% connecting and FRA at 50%. So technically FRA connects more passengers. LHR is Europe's largest airport as it is the main airport for Europe's largest O&D market.
Quoting VV701 (Reply 14): Incorrect. There can be absolutely no doubt at all that LHR is by far and away the best hub in terms of connectivity for at least two airlines, BA and VS.
Best hubs in terms of connectivity are, in Europe:
FRA, AMS and CDG. Even MUC and FCO have more connectivity than LHR. (See post # 29 for the updated list).
skipness1E From United Kingdom, joined Aug 2007, 2377 posts, RR: 0 Reply 18, posted (2 months 3 weeks 2 days ago) and read 7859 times:
Key point is, you cannot make anything of a decent hub if you can't succeed in O&D in your own key markets. Downsizing London is an admission of failure in a key high volume market. Building a hub relying on connectivity if you can't succeed on O&D is a new ball game. The two go together.
You can do well on O&D, until recently that's Virgin Atlantic.
You can then mix O&D in with connections like BA.
However you can't just add connections if your O&D is a poor effort, that will not make a profitable hub.
LAXintl From United States of America, joined May 2000, 22053 posts, RR: 51 Reply 20, posted (2 months 3 weeks 1 day 23 hours ago) and read 7729 times:
Quoting HB-IWC (Reply 4): No matter what is behind it, this deal is not without lots of risk for 9W. Although it is leasing the slots back from EY for 3 years, if in the mean time the 9W-EY relationship turns sour, it could find itself without access to its prime international gate way in 3 years.
I think the way things sit today, the allure of $70mil in the bank, and ongoing talks with EY made this move the pragmatic one for Jet.
But you are certainly right - 3 years from now if things don't work out with EY, 9W might indeed find itself without slots at such a key global airport if EY decides to not renew the leases.
From the desert to the sea, to all of Southern California
JOYA380B747 From India, joined Mar 2005, 426 posts, RR: 1 Reply 22, posted (2 months 3 weeks 1 day 23 hours ago) and read 7612 times:
LHR is a good hub to connect to the British isles, but not at all a better hub to connect to other Euro nations when compared to MUC, AMS or CDG. A passenger has immense flexibility in terms of travel dates and transport and Visa restrictions when passing through the latter hubs.
If it wasn't for AI and those money mongers sitting in the parliament, 9W would have been as big as SQ...:(
HB-IWC From Greece, joined Sep 2000, 4414 posts, RR: 76 Reply 23, posted (2 months 3 weeks 1 day 22 hours ago) and read 7499 times:
Quoting Azure (Reply 12): Once again I have never said that 9W should leave LHR, but you seem to keep saying the contrary, for God knows what reason !
Here is what you said:
Quoting Azure (Reply 5): In such case LHR would not remain as crucial as it is right now for 9W.
while the fact of the matter is that LHR will remain exactly as crucial as it is right now. LHR is the important end point of a spoke in the 9W operational model and it will remain so no matter where 9W's scissor hub may be located in the future.
vfw614 From Germany, joined Dec 2001, 3593 posts, RR: 5 Reply 24, posted (2 months 3 weeks 18 hours ago) and read 4389 times:
I guess one strategy is to make sure that the slots do not fall into the hands of another airline if Jet Airways' goes bust.
25 VV701: Thanks. I also checked the charts and figures on pages 23 and 24 of the link. They are also interesting. They show that: 1. LHR serves 82 long haul d
26 vin2basketball: Correct; LHR is the most profitable out station in Jets international network and the only route where they can actually fill the First Class cabin c
27 PW100: While I do agree fully with this statement, I do think your analysis behind it is skewed. I would expect that the majority of connections will be mad
28 VV701: You are right. Virtually none. But why? The last significant operator of regional jets into LHR was BD. On the day that they were bought by IAG, 20 A
29 sankaps: This whole LHR slot-selling thing... at least in the case of rights that are negotiated on a country-to-country basis, aren't the slots, right, and as
30 LAXintl: Route authorities and landing/takeoff slots are two different things. For example the right to fly between XYZ-London is negotiated by nations as part
31 VV701: Slots at LHR and all other slot controlled airports in the EU are distributed , sold and / or leased under strict rules laid down by the EU. In the U
32 LAXintl: While the agreement is to lease back the 3 slots to 9W for 3-year period, I suspect EY itself would love to further grow its own LHR flying. With 9W d
33 HB-IWC: I suspect there is a strong possibility for that. However, both current BOM slots pretty much overlap with an existing EY AUH slot, so EY may need to
34 b777erj145: I think 9W should leave LHR as it is due to the fact that 49% of Virgin Atlantic belongs to Delta and 9W can also code share with VS. What 9W can do i
35 mercure1: In long run I wonder what Jet Airways will look like and if they will even need LHR slots. It seems they along with Kingfisher they maybe took wrong a
36 LAXintl: Yes who knows what ideas Etihad might have for Jet (if they indeed are acquired). Its not outside the realm of probability that a future Jet might not
37 HB-IWC: An extensive AUH feeder with a limited regional network and a core domestic operation, I would see. In the best case scenario, I could see 9W operate
38 tommytoyz: One question I have is: What is the legality around selling or leasing a slot at an airport from another airline? Is that slot the property of the air
39 airdfw: Jet should not sell off to EY. It then becomes a feeder for EY. They should sell instead to U.S Carriers like DL or UA or may even be AA. Then 9W can
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