ContinentalEWR
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BA Buys Heathrow Slots From UA

Sun Oct 12, 2003 10:47 pm

I read on Yahoo! Airlines/Aviation News that British Airways paid $15-$20 million to purchase four takeoff slots from United Airlines, all of which are UA slots to New York. Does this mean that United is pulling out of the NYC area market to London? Right now, United has two flights a day in the market, both of which operate out of JFK (UA 956 and UA 904). The Newark-Heathrow flight (UA 906) has been suspended or will be suspended shortly, and the day light service from JFK (UA 976) has not operated since 09/11.

There is no question that United is an also-ran in the busy but competitive London-New York market, one of the most prestigious and lucrative in the world. But United must depend heavily on O&D on both sides of the pond to fill one 777 and one 767-300 flying the route daily since it has virtually no major operation at JFK (with NRT, SFO, and LAX being the only other flights, and a couple of Express flights to IAD).

Can United really be exiting the market?

ContinentalEWR
 
SegmentKing
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RE: BA Buys Heathrow Slots From UA

Sun Oct 12, 2003 10:54 pm

BA told another reporter they don't plan on adding any additional NY - London flights... so I don't think UA is giving up the JFK slots... I think it is more than likely the 2 EWR & 2 BOS flights..

-n
~ ~ ~ ~ pRoFeSsIoNaL hUrRiCaNe DoDgEr ~ ~ ~ ~
 
ContinentalEWR
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RE: BA Buys Heathrow Slots From UA

Sun Oct 12, 2003 11:01 pm

The article specifically mentioned the slots as being NY slots, but you are right, in another Press Release about enhanced Club World service to NYC, BA said it is not adding more flights to NYC.

UA has dormant slots to Boston, Seattle, JFK, and Newark, so my guess is that these are the slots they are selling. United hasn't operated nonstop SEA-LHR flights since 1993, the Boston flight was axed last year, and JFK and EWR have been severly reduced by 50% from four daily to 2 daily.

ContinentalEWR
 
David_itl
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 12:22 am

Slots at the UK airports are not tied to destinations; if it were, bmi would have 5 daily to LPL and 2 or 3 daily to both BHX + EMA. Instead bmi cut these services to provide slots for their European routes.

Therefore, knowing BA, I wouldn't be surprised if one or two more of BA's LGW services got transferred to LHR.

David
 
The777Man
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 12:33 am

UA used to fly four daily flights JFK-LHR so UA is probably selling some of the dormant rights that they don't use.

The777Man
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AA717driver
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RE: As Time Goes By: Many 767s Bound For Scrapping

Mon Oct 13, 2003 1:03 am

This is not good for UA. I give you TWA and PAA as examples. When TWA began selling routes it destroyed the morale. Sorry UA'ers I hope it stops here.TC
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StevenUhl777
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 1:24 am

Cash for assets that UA doesn't even use or can't make a profit on...makes perfect sense to me. Many companies who have assets that have only a minimal impact on profits in tough times (and actually have a drag because there maybe operating costs associated with them) will seek to sell them. In fact, my company is doing the same basic practice, and we have nothing to do with the airline business!

If it's true it's BOS and SEA and EWR, those routes will probably never be restarted by UA again, anyways It makes further sense for them to focus on flghts that can be profitable out of hubs/markets that are less competitive for them, such as IAD. Hasn't UA already moved some of their South American routes out of JFK to IAD as well?

Can't say I agree with AA717driver's conclusion. Employees already know those routes have been suspened anyway, so that wouldn't lower morale. If UA were to start selling active routes, now that's a different story entirely, but I don't see that happening in this case.
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STT757
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 1:34 am

I think it's outrageous that UAL is selling Heathrow slots to BA, if they need the money sell all of the routes to either DL or CO.

Or sell some of the slots to either CO or DL (or both) , which I think is fine so long as they do not actually fly the routes untill a new treaty could be signed.

Again this is outrageous.

Going back through all the time tables I have the most daily flights between the US and LHR that I could find UAL flying was 16 daily flights.

I think UAL is going to stick with JFK, 1 daily in the Winter and 2 daily in Summer.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
dutchjet
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 1:44 am

The comment above that states slots are not tied to destinations is correct......UA is simply selling 4 slots to BA if the news release is accurate - thus UA will lose 2 landings and 2 departures per day. UA has cut back in service at LHR in the past years and, for some time, Star Alliance partners have used a some of the UA slots on a temporary basis (babysitting as it is called) so that UA would not lose them. Now, with the EWR service cut, and JFK-LHR operating with only 2 flights per day (there were 3 and at one time 4 flights per day on that route) it is selling the slots that we associate with two New York flights (one to EWR, one to JFK).

While UA has not operated SEA-LHR for years, I believe that the slot for that flight (and some others) have been transferred for use on the Chicago-Heathrow flights.....remember, UA only gained the right to fly ORD-LHR under a special exception to Bermuda 2 (Pan Am did not fly that route and UA's authority into Heathrow was purchased from Pan Am) and UA started ORD-LHR with only one flight per day (a 763)....there are now several flights per day on the route.

A sidenote, with both UA and AA cutting their EWR-LHR services, BA has the Newark to Heathrow route to itself.......and CO, due to Bermuda 2, is stuck at Gatwick. Not really equitable in my opinion; its a shame that CO could not have grabbed the 4 subject LHR slots to open up EWR-LHR service! Situations like this will arrise unless and until Bermuda 2 can be reworked or thrown out - maybe the US and UK authorities will be able to resolve their bilateral by the year 3000?
 
DoorsToManual
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 1:49 am

I don't agree that this is outrageous...UA probably sold to the highest bidder...that's how an auction works, and both parties involved are private companies, not state ones therefore air service agreements between the UK and US govts are irrelevant. Besides, the UK has washed its hands clean of dealing directly with the US...that's what the EU is for.

$15-20 million is nothing to smirk at, I'm sure UA greatly appreciated the charity...

Back to BA.

With the retirement of Concorde from the fleet this month, one wonders whether the airline might trial all-premium class flights through a partnership with PrivatAir using BBJs/ACJs, as Lufthansa is doing now.

rgds

 
conair
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 1:55 am

Dutchjet,
Do not Virgin also fly the LHR-EWR route?

Regards
Conair
 
flyboyaz
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 1:56 am

Yep they sure do and CO codeshares on that flight.
Catch a ride on a smile!
 
dutchjet
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 2:00 am

I think you are right about Virgin on the EWR-Heathrow route, forgot about that, good catch!

However, I think that you understand my point.
 
TLHFLA
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 2:08 am

If the Heathrow slots could be used to fly to any city, I could see BA transferring LGW-ATL to LHR-ATL. They would have the edge on Delta as far as O&D is concerned for that route. I can remember hearing that Delta is very interested in trying to obtain LHR slots.
Bill in ATL
 
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STT757
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 2:09 am

BA has added a third daily EWR-LHR flight, and VS operates two daily EWR-LHR flights.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
Thrust
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 2:15 am

Anyone recognize the situation UA is in? I'll give you a clue (It involved LHR route-swaps between two U.S. airlines which are now one). United is in the same situation TWA was in during the Carl Icahn era, which many of you know about. I'm not going to give a huge lecture. All I can say is that United, like TWA and Pan Am before it, is an airline whose routes extend over the globe. And now, United is being forced to suspend many of these routes, such as flights to New Zealand and, like everyone mentioned, LHR-EWR, and possibly BOS-LHR. My guess is that United will continue to cut even more flights to gain breathing space, because that is what TWA and Pan Am had to do. I would expect to see United slash more international routes in the future, but if that is not going to happen, please tell me. If anyone responds, thanks.
Fly one thing; Fly it well
 
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STT757
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 2:18 am

"and possibly BOS-LHR."

BOS-LHR has been gone for a couple years..
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
dispatch
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 2:28 am

STT757,
what makes you think DL or CO even WANT these slots. They both have their operations at LGW. Setting up at Heathrow for just two r/t's a day would cost them a lot.
Besides, CO has numerous code shares to LHR daily with VS. DL is (probably) anticipating more flights to AMS and CDG in the SkyTeam alliance.

Peter
 
cedarjet
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 2:35 am

Take it from me, Delta and Continental want Heathrow. They want it BAAAAD.

And it would make sense, both have big hubs in the NY area. Delta are the biggest airline across the pond (certainly the biggest US carrier, BA may carry more pax) and a lot of it is from JFK. Continental completely own Newark and have loads of European destinations. Heathrow is the missing jewel in the crown for both airlines.
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copaair737
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 5:21 am

I have heard that BA may upgrade SFO and LAX to 3 dailies in the summer, anyone else hear this?
Livin' on Reds, Vitamin C, and Cocaine
 
donder10
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 7:39 am

LAX maybe but SFO would surprise me.
 
ConcordeBoy
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 7:46 am

what makes you think DL or CO even WANT these slots.

um, the innumerable attempts they've made/lobbied for in order to gain access maybe?  Laugh out loud




Delta are the biggest airline across the pond (certainly the biggest US carrier, BA may carry more pax)

BA is significantly larger than DL over the Atlantic in terms of pax numbers and ASMs

DL is the largest of the USA carriers.

Interestingly enough, despite its highly limited number of markets, NW is larger over the Atlantic (ASMs) than CO, who serves three times as many destinations nonstop
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
speedport
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 12:28 pm

When TWA began selling routes it destroyed the morale.

The parallels are undeniable; although I am sure some dyed-in-the-wool cult members will try.

I'm sure many TWA employees said 'we will survive,' and for awhile they did, but only for awhile.

Airlines which have a future business plan hold on to their routes, even ones they are not using today. Airlines which are holding on by a thin thread toss the future out with the bathwater.

Remember, Pan Am went through the same downsizing and look at what happened to them. UAL has been dropping international destinations steadily, even before 9/11. Now their plan revolves around an LCO. Sound familiar?
 
N743AS
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 12:43 pm

I heard BA was wanting to add another LHR flight to/from Seattle... It seems that Speedbird 48/49 are always full.

-743AS
If the airplane is one piece, don't cheat on it...ride the bastard down! -Ernest K. Ghann
 
gigneil
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 12:46 pm

As long as DL operates ATL-LGW, BA cannot operate LHR-ATL.

N
 
PVD757
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 2:07 pm

Have we forgotten about the Bermuda 2 agreement? You know, the one that says that VS, BA, AA, UA are the only US to LHR carriers? I don't think that BA would waste slots to the US on non-US routes, do you?
 
potomac
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 10:13 pm

i think it's a bit of a stretch at this point to equate UA's selling of LHR slots to the beginnings of the ends for TWA and PanAm. these are 2 takeoffs and 2 landings for routes that are no longer being operated by UA. people constantly demand that in order for UA to survive, they must cut costs, streamline service where appropriate to remain profitable, etc., yet when UA does, those same people point out that this is "A BAD SIGN"!!! it was logical to drop those routes in the first place, and it is smart to sell the corresponding slots. this is not the end of UA across the atlantic.
 
airbazar
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 10:53 pm

PVD757, I'm not familiar with the details of Bermuda2, but I'm almost certain that VS, BA, AA, and UA are not the only airlines currently flying US to LHR.
Air India is another one that I know about.
 
AA777MIA
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 10:58 pm

I believe PVD 757 is correct, I believe only AA, UA, VS and BA can serve the US LHR market. Air India may fly to the US from LHR, but isn't it a thru flight from India? I think there is some restriction on tickets sales in the market for them. Maybe i am wrong, anyone have the answer?
 
codc10
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 11:27 pm

NW has the higher ASM over CO due to the higher capacity of the DC-10s and 747s, now A330s as well. However, CO traditionally has higher transatlantic yields due to the NYC-area hub.
 
gigneil
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RE: BA Buys Heathrow Slots From UA

Mon Oct 13, 2003 11:45 pm

AA, UA, VS, and BA are the only American/British airlines that serve the US from LHR.

There are several other examples from other countries that operate routes ex-LHR to the US.

N
 
worldtraveler
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 12:07 am

This just shows what a poor steward United has been of its valuable route authorities to LHR. It doesn't really matter where UA is getting them from, only that they have authority to fly to LHR which they cannot use and cannot compete in one of the world's most lucrative markets. It is inexcusable that the one-time largest airline in the world cannot field more than 2 flights a day from JFK-LHR, the biggest international air market in the world. Of course, it makes economic sense for them to sell what they cannot use but the real point is that the law should be changed to prevent UA from hoarding valuable authority which they do not even use. At least AA use its LHR authority well AND they also have an operation at LGW which does quite well to the cities such as DFW where they can't fly to LHR.
CO, DL, and NW would love to have access to LHR. They are clearly creating a big enough alliance that BA will have no choice but to amend treaties to allow CO/DL/NW access to LHR in return for BA having the ability to own and control a continental European airline. If BA doesn't open LHR, they will watch their connecting traffic get sucked away and carried via AMS and CDG. Remember, even the Swiss deal keeps the revenue on Swiss, not in BA's hands. The only way BA can financially benefit from a partnership w/ a Euro airline is to own them and the US will not allow route authority to be transferred from a continental Euro carrier until US carriers have access to LHR.
Make it happen Skyteam! As soon as CO/DL/NW gain access to LHR, UA is finished there.
 
United1
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 12:48 am

I'm not sure if this interests anyone here but here's a breakdown of where the United slots are currently used for.

Out of the original 40
4 were just sold to BA
8 have been leased to LH since 94-95. When UA and LH started their code share (pre Star Alliance) UA pulled out of the LHR to Germany market and leased the slots to LH
2 are used for the AMS flight
6 for ORD
4 for JFK
8 for IAD
4 for SFO
2 for LAX
2 are unused (formerly used for DEL)

actually I think that selling 4 slots that UA wasn't going to use for the moment was a good thing it gives them a little more cash and gets rid of some debt off the books (When the BK started UA morgaged all of its LHR slots). In addition UA may be betting that if and when BA/AA goes through it will be assigned some more slots at LHR as BA/AA will have to give up some slots to get an approval for transatlantic code share.
UA's not going anywhere, they are for the moment and for the foreseeable future stable they have been cash positive for months and revenue is starting to recover. Even if UA wasn't going to use all of their slots that's their right as long as they are paying for them or own them they are theirs to use as they choose. Its much like the gates at Denver, they are leased to UA and as long as UA doesn't violate the terms of the lease its their choice what they do with them. Sorry but the O' Woes Me Argument doesn't work in the business world.
Chuck
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
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mariner
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 1:47 am

"Its much like the gates at Denver..."

It is exactly like the gates at Denver. United has them and can do what they like with them.

But I would have thought that LHR slots are infinitely more valuable - for future use - than the A gates at Denver.

More gates at Denver can - and will - be built. But until - and if - there are changes to the situation at LHR, no more slots are available.

What this move would suggest is that United has put a price on it's assets, and if they can get that price, they'll sell. So I wonder what price they've put on the gates at DIA? We know they've already turned down $10 million.

It's a bit like the woman who would sleep with you for a million bucks, but not for ten bucks.

We know what she is, it's just the price she's haggling about.  Smile/happy/getting dizzy

cheers

mariner
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AA717driver
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RE: As Time Goes By: Many 767s Bound For Scrapping

Tue Oct 14, 2003 2:05 am

StevenUhl and Potomac--I can assure you that when you are in bankruptcy ANY sale of ANY asset(and I disagree that these slots are not significant because they are not currently in use) damages morale. I've been there when the announcement was made--it's a kick in the gut. What you want to see is the airline remaining whole and recovering. It rarely happens.

In bankruptcy, no one wants the stuff a company doesn't need. That's why Heathrow slots are sold--because they generate revenue. That's why it's so damaging to the airline's bottom line. UA now doesn't have those slots to generate future revenue. I guarantee BA will recoup its investment is very short order.

What's next? Step right up... Sad TC
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speedport
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 2:37 am

What this move would suggest is that United has put a price on it's assets

The implication of this move cannot be understated.

UA now doesn't have those slots to generate future revenue.

My point exactly. The future is being sacrificed for what is expedient today. TWA did it and so did Pan Am. UAL has embarked on the same flight path those two did, only a blind person wouldn't be unable to see it.

The only hope for UAL is relaxation of foreign ownership rules so LH would be able to buy them out. Otherwise UA will shrink to the point of imploding.


[Edited 2003-10-13 19:39:35]
 
potomac
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 2:59 am

first of all, whats wrong with putting a price on your assets? in bankruptcy, i would think that is standard practice when you look at what you can keep and what you cannot, and what will generate revenue for you now and going forward. UA chose to suspend those routes for profitability reasons, and they now are selling the slots to address critical, albeit short-term, cashflow issues. i dont believe the slots are not significant - they certainly are, and i'm sure BA will benefit from having them - but that doesnt mean they work for UA's current and future model and financial situation.

anyway, i'm sorry, i just dont see the selling of these slots as the watershed event for the end of united. it seems like people in this forum await every next move by UA - the reduction of capacity in certain markets, the storage of an aircraft in the desert, or any other cost initiative - and then pounce on it, declaring that it is representative of doom for the airline. are there not things that UA must do now so that there can be a future period? is it not common business sense to control costs and manage assets appropriately to return to good financial standing? what is "expedient today" is pretty important right now for the airline.
 
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mariner
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 3:43 am

Potomac:

There's nothing wrong with putting a price on your assets. Most companies do it all the time, and I'm all in favor of UAL realizing what cash it can.

As I've said a hundred times (or more), I want UAL to survive and thrive.

The difference is only this - claiming you need the assets for future growth, when in reality you'll jump at the highest acceptable bid.

Right now, any cash is a valuable asset to UAL. So, name the price on the assets and see what you're offered. You don't have to accept.

But don't play coy.

It seems odd to say "we're not going to cut routes, now or in the future", when, in reality, that is precisely what they have done at LHR - future routes.

They've also sold them to a huge, aggressive competitor. Given the scarcity of slots at LHR, it can be argued that British (and it's de facto partner, American) got them cheap.

cheers

mariner
aeternum nauta
 
potomac
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 3:58 am

Well, if we compare the DEN A gates to the currently unused LHR slots, I do see the gates as assets for future growth. They are now likely to be used by Starfish, or to free up other gates for use by Starfish - and thus worth holding on to. But these LHR slots - are they not from routes that have long been suspended, rather than slots that have been yet to be used? I guess it all depends on what UA has in mind for continued and future growth, and my take on it is that these 2 flights do not fit into the plan. Maybe UA would look to the LH slots as a backup if/when they chose to build back up at LHR - who knows.

Given UA's current situation, if I had to choose between selling currently unused slots for immediate cash, vs. hanging onto them for future added routes that may or may not be profitable and part of the long-term operating model, I think I'd be forced to address immediate needs and sell them.
 
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mariner
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 4:38 am

Potomac:

Actually, I'm just jesting about the A gates at Denver. Like you, I assume they will be used by Starfish, and I don't think UAL would let them go except for a lot of money.

But then - since Starfish is not "adding" many UAL flights but replacing existing mainline flights, this would suggest - stress suggest - that there would then be several under-used UAL gates at Terminal B. And since it is planned that pax will connect from mainline to Starfish and v.v., this means a schlep from A to B for those pax.

Which is a slightly irrational use of assets, don't you think?

Back to the matter in hand. I don't think the selling of the LHR slots is, as some have suggested, the writing on the wall for UAL.

I do think that - as far as future use goes - they have infinitely more potential value than a few gates at Denver (say) or (say) some desirable routes that aren't presently doing all that well.

cheers

mariner
aeternum nauta
 
potomac
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 4:52 am

mariner - no doubt about the value of the heathrow slots, though UA's latest push to help get UA healthy again is Starfish and not Atlantic expansion, so i can see why one wins over the other if we are to compare them. and as valuable as the LHR slots are on the surface, for whatever reason, the routes UA was flying using them were not working for UA.

also, starfish may be just replacing mainline flights, but that's not to say that UA may also add mainline frequencies elsewhere to use the gates. and who knows how the gates in A and B will be utilized - maybe starfish will be in B and you'll see some other commonality among flights using A. i'd like to think that UA will be very strategic in terms of Starfish connecting passenger experiences, what flights make sense to go out of A, etc.
 
N839MH
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 5:24 am

I wonder if the Pacific routes (UA) could fetch a healthy price?

UA selling the Pacific routes for, lets say what they paid PA $400 million,
that money could be used for StarFish and give another airline i.e DL
win/win situation.

Who knows whats ahead for UA or any other airline, but history does
play a big part on how the future could turn out.
Solodude!
 
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mariner
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RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 5:44 am

Potomac:

You're switching horses on me. Either Starfish is going to operate out of A or it isn't.

The great virtue is that it would give Starfish it's own identity, and if it doesn't have that, what's the point of it?

This identity could be achieved by putting Starfish at B, with their own "batch" of gates, but the moment you start to mix and match - some out of A, some out of B - then it's all just UAL with different livery.

Which - to me - seems to be the biggest potential problem for Starfish. Either it is a unique LCO, or it is simply a form of Shuttle by United.

But what they hey? If that's what they want to do, I can only wish them luck.

cheers

mariner
aeternum nauta
 
United1
Posts: 2920
Joined: Wed Oct 08, 2003 9:21 am

RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 9:34 am

I agree Potomac......
Everyone says United must change and do things differently but when they do everyone says that its the end of the world Smile
United not going anywhere guys......my crystal ball tells me so Smile
chuck
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
FLY777UAL
Posts: 4830
Joined: Tue May 18, 1999 3:49 am

RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 10:02 am

Hi...not sure if anyone has brought it up yet, but would these slots be used for BA's upcoming "pajama" flights between JFK and LHR?

F L Y 7 7 7 U A L
 
BOSugaDL
Posts: 239
Joined: Thu Aug 21, 2003 4:39 am

RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 1:47 pm

so let me get this striaght...UA has two BOS-LHR slots, but does not use them? Doesn't BA, AA and VS have rather high loads on these flights, especiaclly during the summer...Why woulnd't UA want to get in on that?

Okay and also if BA bought the slots, would they use them and have 5 flights a day BOS-LHR? Or do airlines buy these slots as investments for the future growth?

It would be cool to see another US carrier flying to Europe...BOS only has AA(LHR) and NW(AMS) do Trans Atlantic hops.
 
StevenUhl777
Posts: 3281
Joined: Sun Jul 08, 2001 11:02 am

RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 2:19 pm

Bosugadl: I believe the common agreement is that UA sold 2 JFK-LHR slots, 1 EWR-LHR slot, and 1 BOS-LHR slot. These routes were only marginally profitable (at best) for UA, and it makes sense that they could get more value from them by selling than keeping it.

I think you're wrong about BOS and transatlantic...I was there in August and saw Virgin Atlantic and Aer Lingus (Ireland). Also, Lufthansa flies in, and I saw a Swiss A330, too. I also thought Delta flew transatlantic flights from there also. Anyway...might want to double check your facts on that, especially since BOS is 6-7 hours (tops) to Europe !!  Big grin

And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
potomac
Posts: 692
Joined: Sat Jul 26, 2003 5:06 am

RE: BA Buys Heathrow Slots From UA

Tue Oct 14, 2003 8:56 pm

there were 4 slots, for 2 roundtrips....i think it was for bos and ewr but i'm not certain. even so, bos is likely to be more profitable for AA than UA since they have feeder traffic there as a mini-hub/focus city.
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: BA Buys Heathrow Slots From UA

Wed Oct 15, 2003 1:40 am

The point must also be made that UA was more interested in short-term cash than future earnings based on the fact that they SOLD the slots and not LEASED them. Airlines often lease slots to other airlines when conditions don't exist to serve the market profitably now but may in the future. UA has now PERMANENTLY limited their ability to grow in London and they should get any new slots ONLY after every other US carrier that wants to serve LHR gets as much as they want.
There is nothing wrong with a company selling assets to help them get out of bankruptcy or improve their finances but there is a real problem with hoarding assets to prevent competitors from serving markets and then profiting by being able to control the disposition of those assets. The Denver gate situation and the LHR slots are very similar since in both situations UA is preventing other carriers from competing w/ them. In the LHR case, they do not believe there is much of a chance that other carriers will gain access to LHR in the near future (probably true) and that no other US carrier can benefit while in DEN they know that the gates will immediately end up in Frontier's hands. Ultimately, competition will come and UA will face tougher competition in both DEN and LHR. And I do hope that UA gets to the point where they have to sell their Pacific operation to survive. It will probably fetch $1.5 to $2 billion dollars today - more than enough to give UA the fresh start they need but do not appear to be gaining from investors. Eliminating the Pacific dramatically changes United's future outlook but they will have no choice if they can't get a gov't loan or a significant investment. I'm betting, however, that someone will invest in them if their financial returns are comparable to other airlines.
 
potomac
Posts: 692
Joined: Sat Jul 26, 2003 5:06 am

RE: BA Buys Heathrow Slots From UA

Wed Oct 15, 2003 2:18 am

well yes, but given the partnership with LH and their LHR slots, i don't think UA's future service is permanently limited to what they have now. even so, 2 more roundtrips to LHR should not be something to make or break UA financially.

and i guess i see the DEN gates issue differently...my take on it was that UA WAS technically "hoarding" those assets, but now that Starfish is being rolled out, it seems that there is a plan for their use, either directly for the LCO or for other use by the airline as a result of increased overall gate usage. per an anaology i used before (though not the best, i admit), its the difference between saving the seats around you at a movie theatre just because you dont want anyone else to sit there, vs. doing so because your friends who will occupy them are on their way in.

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