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US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 12:37 am

Thought you might be interested in an article from today's Observer, taken via Airliners.Net news section;

http://politics.guardian.co.uk/eu/story/0,9061,636470,00.html

Regards
 
747firstclass
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 1:11 am

It is going to happen, period, no question, end of discussion. In fact BA and the UK always dreaded the french getting ahead of them in this game. May I remind everyone that a few days ago, the US govt. gave DL, AF and CSA final anti-trust approval for immunity. The US/France openskies will be signed on Tuesday January 22, 2002. My questions is to all the diehard, rabid supporters of BA.How do you expect BA, LHR and the UK to keep up with aviation developments, tourism, business developments and advancements, etc., if they do not open up LHR to more US competition in the form of openskies? This is the 21st century.If the truth be knowen, I am sure that there are some people in the UK and BA that are pretty upset that the french have beat them to the punch. Serves them all right. As a result of that the company I work for is downsizing the UK branch and expanding the office in France. Wake up people.
 
Arsenal@LHR
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 1:14 am

I think its about time. This Bermuda II agreement is out-dated, old fashioned and anti-competitive. If its not agreed then i would be astonished and the UK-US will both lose out, CO, DL, NW wont get into LHR, BA-AA alliance wont happen, so everyone loses out completely (not to forget BMI). but ofcourse, Virgin is the odd man out!

Plus it will be a bonus for us avaition enthusiasts/spotters, we'll get to see the likes of Delta, NW, CO at LHR.

Regards
Arsenal@LR
In Arsene we trust!!
 
greenjet
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 1:55 am

But if Opean Skies goes ahead will the likes of DL, CO, NW, etc. get the slots?
 
BA
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:03 am

What on earth is wrong with Virgin Atlantic?????

They're going to try and block it??????

Sheesh.......
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
RickB
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:15 am

Virgin would like to block it as they already have their foot in the door at Heathrow. As the smallest carrier flying transatlantic from Heathrow they are the most vulnerable to increased competition.

Anything that upsets Branson is good in my eyes - i'm fed up with his perpetual whining !!
 
747firstclass
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:22 am

There is much, much too much political presssure in the USA, that the US govt. will NEVER agree to an openskies with the UK unless the slots are guaranteed to DL, CO,NW US, etc. The UK and BA know what the guidelines are. I cant believe that anyone involved is that stupid. If the US agreed to an openskies that did not involve guaranteed slots, this agreement would have been done years and years ago. It is common knowledge that many things can be done to make more efficient use of slots, runways, gate space etc. at LHR. This is partly how the slots will "magically" appear. Furthermore if the USA agreed to an openskies without the guaranteed slots, congress would pass legislation blocking the anti-trust immunity, thousands and thousands, perhaps, hundreds of thousands, of airline employees would be laid off in the USA immediately.There would be additional layoffs at Boeing due to cancelled aircraft orders etc. More airlines in the US would face bankruptcy or extinction becasue of the inability to compete on the international scene, on a level playing field.I know for a fact that this has been brought to the attention of very high people in the US govt.I am well aware that the UK has helped the US during the war on terrorism, and that AA is a big contributor to Bush. However, you have to look at the whole picture and this will all fall into place. The political reality in this country is such that there is no other alternative. PERIOD!!!! END OF DISCUSSION!!!!!
 
BA
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:25 am

Virgin Atlantic has officially lost my respect........
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
RickB
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:41 am

Not sure how an open skies agreement could result in the loss of quite so many jobs in the US without guaranteed slot availability !! Unless you count jobs at AA who will be giving up slots as well as BA !!

AND an open skies agreement would also have to include other UK airlines such as BMI having access to LHR. It wouldn't be just a free for all for US airlines !!

As for efficiency at LHR - the runways are operating at full capacity - without reducing aircraft seperation (since most aircraft at LHR are heavies this is not a good idea) or increasing operating hours (local people wont allow it) there is not a lot you can do regardless of how 'well known' it might be !!

You could build more runways but I doubt the locals will allow that either !!
 
bobnwa
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:43 am

Without the guaranteed slots perhaaps hundred of thousands of airline employees would be laid off in the US? They are working now aren't they?
 
Cyprus-Turkish
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:56 am

It is very important for increased competition that more transatlantic airlines are allowed access to LHR but it is unfortunate that it will mostly be US airlines "attacking" LHR and only a few British ones will benefit from opening up LHR.

It is also about the time they sort out BA-AA partnership properly because the passengers are not really benefiting since there are no codeshares or common mile programs
 
donder10
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 7:15 am

However the EU is trying to get one EU-US open skies plan and to abolish all the individual countries-US treaties.
Alex
 
Arsenal@LHR
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 9:05 am

I dont want the EU involved in this. Open skies should be agreed between individual countries.
In Arsene we trust!!
 
Hoffa
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 9:31 am

Surely CO, NW, DL would be paying top dollar for whatever slots they may be given@LHR and could edge out the smaller non-flag carrier operators or else take a few frequencies from the flag carriers themselves at a very inflated price?

I know slots aren't bought and sold per se, but you get the picture.
 
Arsenal@LHR
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RE: What About US Airways?

Mon Jan 21, 2002 9:48 am

What about US airways, will they enter LHR, if Open skies is agreed?
In Arsene we trust!!
 
747firstclass
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 9:56 am

I can absolutely, positively guarantee that, under no circumstances will any elected member of congress or anybody else sit back and watch any US airline pay for slots at LHR. Never, ever, under any coinditions, has any foreign airline paid for any slots at any US airport. There would be an instant and automatic legislation passed that would than start charging foregin airlines for the slots at JFK,LAX.ORD---get the picture? I can assure you that this subject has been discussed already at the highest levels behind closed doors.It will not happen.Lets approach this with a level head running on intelligence and not emotions. The UK govt. and BA and other interested parties know what the bottom line is.It is the guaranteed and unrestricted access to LHR for all US carriers. After 10 years of going around and around and around some more on this subject, BA, the UK etc. knows where the US stands in exchange for antitrust immunity. I cant believe that anyone would be so stupid to show up for negotiations
and try and "compromise" this subject. It is non-negotiable. PERIOD.
 
BA
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 9:58 am

Arsenal@LHR,

I don't think so. First of all US Airways doesn't have a lot of presence in Europe, and they don't have any partners there, so most of the flights to LGW are O&D. Therefore, there is no need for them to use LHR.

The reason why airlines want to serve LHR is because of the excelent connections available there.

Regards
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
747firstclass
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 10:09 am

US has made it very clear that when openskies comes they will start service from PIT-LHR, PHL-LHR x2 daily
and CLT-LHR They already have their schedulkes worked out, which are under lock and key, to put it mildly.They will NOT sit back and stay at LGW. They have issued many, many press releases realting to this subject.
 
VS11
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 10:41 am

There are some very ignorant statements in this discussion.
If US companies are enlarging offices in France and downgrading UK ones, this is not because the French have beaten the British to the punch! I hope the person who wrote this does not mean that US companies go to France because of the Open Skies agreement. That is nonsense. If anything, France is a better choice than Britain since it is integrated better in the EU than Britain. For one thing, Britain did not join the euro so for US companies makes much more sense to set up their European offices in France rather than Britain.
Regarding the Open Skies, I am fairly sure that agreement will not go through. And the reason for that is that, hopefully, the British are not that stupid to agree for an Open Skies agreement without having the US concede foreign ownership of US-based airlines.
First, many airline jobs in the UK will be lost if more American airlines are allowed into LHR because UK airlines will have a much harder time competing with American airlines because American carriers are generally stronger than British carriers.
The reason for that is that the American aviation market is stronger than any other because it is huge. BA is losing money in the European market, and what made it profitable before was the transatlantic routes. As opposed to British carriers, which sustain their profitability basically relying on the Transatlantic routes, American carriers have huge domestic market, which is the source of their strength.
So why would British authorities sign an agreement with the US that will be detrimental to British carriers and will diminsh British jobs without anything in exchange?
You have to understand that Bermuda II is profitable and advantageous for Britain.
Richard Branson does have a point that if two airlines have a substantial market share in a regulated market with almost no new entrants then this is anti-competative. But he has something much more bigger in mind, and that is having the US to allow foreign, or at least British, ownership of US-based airlines.
This is the game here, and the BA-AA deal is only the superficial part of it. The logic here is, yes, the deal is anticompetitive but to make it more competative let's open LHR but the question is why open LHR when this way is better for UK carriers.
Branson's point have all along been that if the UK opens LHR, they should get in exchange from the US the permission British nationals to own an airline in the US. That is the bigger picture. Indeed, Branson is looking for new markets for Virgin Atlantic but if British carriers are allowed to operate in the domestic American market then all British carriers will benefit.
And while Bermuda II is still in effect, the AA-BA deal will be anticompetative no matter how many slots are given away.
You should look at this deal much more strategically than just as a BA-AA deal. And yes, France and Germany will continue to become the preferred choice for the European operations of American companies because they offer better conditions to do business there, and the Euro is only one of them.

Hope this helps, although I am sure a hot debate will follow....

Regards.
 
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RayChuang
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 12:52 pm

I think there is one very simple reason why France and the USA will now have an Open Skies agreement: plentiful gate capacity at CDG.

Since CDG has potentially way more capacity than LHR, the could easily accommodate more flights from the USA. Also, CDG is connected to France's own high-speed railroad network, so that means fast ground travel from CDG to the rest of France and the Benelux countries are possible, not to mention the potential for a Eurostar link from CDG back to Waterloo International station in London. Imagine after landing at CDG you hop onto a TGV train and within two hours you're in downtown Amsterdam.

I don't think a US-UK Open Skies treaty will become possible until LHR's Terminal 5 opens, which will allow a major reassignment of gate at the current LHR terminals since BA will move most of its operations to T5. This could mean US-based airlines can be assigned its own LHR terminal or have use of most of one, meaning that CO, DL, UA and US will have its own terminal (or vast majority use of one terminal) at the airport; AA will likely go to T5 as part of the AA-BA alliance agreement.
 
blink182
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:29 pm

I am fed up with Branson, but he does have a point though.

The US wants it both ways. Every US airline into LHR, and UK airlines can't own US carriers. It favors the US based airlines too much and puts the European carriers in the dust.

I want AA/BA to go through but in exchange, I think it would be fair for Virgin to create a "Virgin USA".

Plus, the US government doesn't get it, there just simply isn't enough space to go around in LHR. True, when T5 is built, it will help ease things, but that will be awhile.

Also, I never understood what the whole point of Bermuda II was. If it wasn't there, you could be 90% sure AA would fly DFW-LHR and UA would have DEN-LHR, not to mention the VS and BA routes.

I want AA and BA to go through, but they shouldn't have to give up a million gajillion slots like the other airlines want them to do.

Also, no one seems to get it... AA bought those slots from TWA. Any airline had a chance at those, but they didn't. They have no reason to complain.

blink
Give me a break, I created this username when I was a kid...
 
747firstclass
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RE: US-UK Open Skies-now Or Never!

Mon Jan 21, 2002 2:43 pm

The story I hear from sources close to the scene is this. If there is not an openskies AA will walk away from the BA alliance and go elsewhere. They are tired of waiting around watching paint dry on the new T5 at LHR. Consequnetly no other US airline will want to team up with BA. So, reluctantly BA, the UK and others with the exception of Branson will go along with openskies. Dont forget that by the antitrust immunity will allow access via code share to the entire US for both BA and BMI. In return the US will not step in the way of anybody from the UK trying to lobby for changes in the US ownership laws of airlines.It will be up to BA, Branson, anybody else that is interested to lobby to get the changes etc. Thats the only way the ownereship limit can be increased from 25% to 49% or even 51%.The laws have to be changed.
 
VS11
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RE: US-UK Open Skies-now Or Never!

Tue Jan 22, 2002 11:56 am

Well, I was wrong - a hot debate did not follow.  Smile

Cheers.
VS11
 
blink182
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RE: US-UK Open Skies-now Or Never!

Wed Jan 23, 2002 7:02 am

747firstclass, I never thought about the possibility of AA walking away if it didn't go through, but your sources do have a point.

There is one question though, that basically leaves no other major european hub left. Keep in mind that Alitalia is now with Delta, so they are no longer an option.

Olympic has Athens, but Olympic doesn't exactly have a huge route network and Athens is a bit far south and not big enough.  Insane

blink
Give me a break, I created this username when I was a kid...
 
Hoffa
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RE: US-UK Open Skies-now Or Never!

Wed Jan 23, 2002 7:08 am

LHR isn't just for connecting passengers...its a given fact that flights from the US average 85-95% loadfactor compared to 75%-80% for those using LGW.
 
Cyprus-Turkish
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RE: US-UK Open Skies-now Or Never!

Wed Jan 23, 2002 7:13 am

Why is Heathrow so important? I mean what is wrong with Gatwick or Stanstead? With Gatwick and Stansted Express, both are very accessible airports and relatively congestion free when compared with Heathrow.
So someone please tell me why Heathrow is this crucial?
 
carduelis
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RE: US-UK Open Skies-now Or Never!

Wed Jan 23, 2002 7:33 am

>>>So someone please tell me why Heathrow is this crucial?<<<

Like the knowledgeable teenager, could it be that because you can't have it you want it even more?

LGW and STN have excellent high speed rail connections to Central London.
Per Ardua ad Astra! ........ Honi Soit Qui Mal y Pense!
 
David_itl
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RE: US-UK Open Skies-now Or Never!

Wed Jan 23, 2002 7:40 am


One of the problems for STN is the perception of being a low-cost carrier airport. Additionally, any long-haul airline would also seek some transfer traffic on their routes. I don't think that the likes of Ryanair would want to be signing up with AA/UA!

David
 
747firstclass
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RE: US-UK Open Skies-now Or Never!

Wed Jan 23, 2002 8:31 am

Please dont forget that AA has been in a code share at SN and Swissair. Granted both airlines are goners but the point remains that AA is a bit entrenched at both BRU and ZRH. AA has a back up plan if you will, so they dont lose as much as BA would if the openskies and subsequent anti-trust immunity does not go through.
 
VS11
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RE: US-UK Open Skies-now Or Never!

Thu Jan 24, 2002 12:15 am

Why LHR is so important as compared to LGW, someone asked?
Well, to start with the runways. LGW has one, which is inconvinient since when weather is bad, it slows down the whole airport, which means delayed flights, missed connections, which result in financial losses for airlines.
Also, since there is only one runway, this limits the capacity of the airport in terms of how many aircraft it can serve.
Also, the runway at LGW is shorter, which affects the weigth of the departing aircraft. The larger the runway, the heavier aircraft can go. You will note that there are lots of "heavies" at LHR, and they normally need longer runways to carry more people and cargo, so LGW runway is another penalty for airlines since they can carry less paying loads from LGW.
For airlines such as Virgin or BA, it is also cheaper to operate from LHR than from both airports since they have to shuttle all the time - pax, luggage. All of this affects connection time and missed flights, and also additional costs of transporting luggage and people from one airport to the other.
And since LGW is smaller, it means less aircraft to other destinations, which limits again its usability.
And also, LGW adds 20 pounds to the airfare of any LGW ticket, just to get to the airport from Victoria Station.
Personally, however, I like more LGW because it is newer than LHR, and is much better taken care of. Two weeks ago I was visiting London, and connecting at LHR and it was so dirty, overcrowded and very unpleasant, while LGW is more advanced with the electrical train cars that go to the terminals.
LGW is really very nice.

If I can think of any other reason why LHR is crucial, I will post it as well.

Hope this helps,


VS11
 
qantas744
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RE: US-UK Open Skies-now Or Never!

Thu Jan 24, 2002 1:26 am

I would disagree on the comment about adding £20 to get from LGW to central London-the Gatwick express is reasonably priced whereas the Heathrow express is the most expensive train in the UK.

Nevertheless,LHR is still preferable to LGW in other respects.


Matt
you can't buy time but you can sell your soul and the closest thing to heaven is to rock'n'roll
 
Banco
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RE: US-UK Open Skies-now Or Never!

Thu Jan 24, 2002 1:45 am

There is a bigger market in and around LHR. That's the crucial aspect to it. It serves London itself and the M4/M3 corridors where there is great wealth and lots of company bases. Gatwick serves the area south of London and Kent which is more thinly populated.

Add to that the two runways at LHR which means that it offers a much greater density of flights and destinations and there it is.

The fact remains that the volumes and yields for routes out of LHR are far better than their equivalents at LGW, even if LGW offers a better schedule on any particular route.

This is evidenced by BA's attempt to turn LGW into a second hub, which failed because the revenue resultant was not sufficient to offset BA's acknowledged high costs.

From the perspective of the other end of the route, LGW is viewed as a secondary airport, and relatively small volumes of the business traffic will go there if LHR is the alternative. Sometimes its not logical, but that's the way it is.
She's as nervous as a very small nun at a penguin shoot.

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