Source : Delta.com
Atlanta, Dec. 21, 2001 -- Delta Air Lines (NYSE:DAL) filed comments yesterday with the U.S. Department of Transportation (DOT) expressing support for the Justice Departments (DOJs) determination that the proposed American Airlines - British Airways alliance cannot be approved without large scale slot and facility divestitures at Londons Heathrow Airport.
According to Delta, this weeks Department of Justice filing for DOT confirms that the
American - British Airways alliance cannot be approved unless conditions are imposed to remedy the competitive harm that will be caused by the alliance. The DOJ submission validates Deltas position that the AA/BA combination would have disastrous consequences for consumers unless large-scale slot divestitures are included as part of any remedial conditions.
"If anything, the competitive situation in London has become worse since the Justice Departments review of the alliance in 1998," according to Scott Yohe, Deltas senior vice president - Government Affairs.
DOJ has confirmed once again that competitive access to slots, gates, and airport facilities at London-Heathrow Airport is virtually impossible, and a very substantial number of Heathrow slots and facilities must be divested to prevent consumer harm that would result from a combination of the two largest U.S.-London competitors.
"Without substantial divestitures of London Heathrow slots and gates, the British Airways/American partnership should be disapproved for the same reasons it was rejected by regulators four years ago," said Yohe.
The DOJ, refuting claims of American and British Airways, found that:
* Capacity and pricing in US-London markets is severely restricted
* For a liberalized US-UK bilateral agreement to be meaningful, it must be accompanied by substantial US carrier access to London
* Entry into the London Heathrow Airport is severely restricted
It is very difficult for US airlines to obtain London Heathrow slots
It is unlikely that US carriers can obtain London Heathrow slots from European alliance partners
In addition, London Heathrow gates and facilities are very scarce
* US flights to London Gatwick are not a substitute for US flights to London Heathrow
* If DOT cannot impose London Heathrow conditions to remedy these harms, DOJ would oppose the AA/BA alliance
Delta said DOJs proposed remedies address two separate, yet equally important objectives:
· First, to remedy discrete competitive harms in the New York-Heathrow and Boston-Heathrow markets, the Justice Department recommends that DOT require the divestiture of 126 weekly Heathrow slots and related facilities so that competitors can operate seven additional New York-Heathrow flights (98 slots) and two new Boston-Heathrow flights (28 slots). Delta asked DOT for release of 56 slots for four daily round-trips for New York- Heathrow and 28 slots for two daily round-trips for Boston - Heathrow services.
* Second, for consumers across the United States to realize the true benefits of a liberalized US-UK aviation bilateral agreement, the Justice Department recommends that DOT require the divestiture of additional Heathrow slots and facilities to ensure there will be a net gain in consumer benefits as part of any new US-UK aviation treaty. Although the Justice Department did not identify a specific number of slot divestitures that would satisfy this requirement, Delta said that DOJ in 1998 determined that the AA/BA alliance would need to give up 336 weekly Heathrow slots (equivalent to 24 daily round-trip Heathrow-US flights) to balance the harm caused by formation of their imposing alliance. Delta asked DOT for release of 42 slots for three daily round-trips for Atlanta- Heathrow and 28 slots for two daily round-trips for Cincinnati - Heathrow services.
In its filing, Delta said that British Airways and American should release a minimum of 504 weekly slots to competitors, with 154 of those slots - the equivalent of 11 daily round-trip flights - allotted to Delta. Delta said that without such divestitures AA/BA will stifle competition on most U.S.-London routes.
Imagine if DL gets those 504 weekly slots, they are already No.1 transatlantic airline, with access to LHR they´ll be a pain in the ass to AA, UA and many others, plus the alliances with AF and AZ.
My guess , if they get the slots, (something almost impossible), is that DL should be ordering more 777-200ER