gilesdavies
Posts: 2274
Joined: Tue Dec 02, 2003 7:51 pm

Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 5:33 am

I have tried to search for this answer and cannot find it anywhere...

But why did Delta have to pay United for the rights to fly between London and New York?

Both airlines operate the route out of different London airports, and as Delta will operate the route out of LGW they will not be effected by the Bermuda Agreement rules, which are in place at LHR, where only two UK and two US airlines can operate flights to the US.

Maybe there is some further rules which I am not aware of... (Please tell me if this is the case.)

As long as a route gets local government and slot approval (as is the case with nearly all Non-EU routes), I thought there was nothing stopping a British or US airline flying from LGW to a US destination.

Also JFK maybe busy and slot restrained at times, but it I can't see that DL paid for UA's slots there. As slots do seem plentiful.
 
N1120A
Posts: 26468
Joined: Sun Dec 14, 2003 5:40 pm

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 5:38 am

Quoting Gilesdavies (Thread starter):
Also JFK maybe busy and slot restrained at times, but it I can't see that DL paid for UA's slots there. As slots do seem plentiful.

There are no slot controls at JFK, and even if there were, DL would have loads more than UA.

The reason DL paid UA to fly to London is because route authorities are set out by city for most places by the DOT, not by airport. This means that even if DL wanted to fly to Stansted, they would have had to buy a route authority off someone.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
N174UA
Posts: 860
Joined: Thu Jun 01, 2006 4:17 pm

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 5:39 am

UA owns the slot for JFK-LHR. UA decided to sell the slot, so they and DL agreed. Under Bermuda II, DL has to operate the flight to LGW instead.

$21 million I think it was? Maybe that's too high.
 
osiris30
Posts: 2310
Joined: Sat Sep 30, 2006 10:16 am

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 5:41 am

Quoting N174UA (Reply 2):
UA owns the slot for JFK-LHR. UA decided to sell the slot, so they and DL agreed. Under Bermuda II, DL has to operate the flight to LGW instead.

Didn't UA get it off Pan-Am for a song in when Pan-Am went bye bye?
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
MAH4546
Posts: 24604
Joined: Wed Jan 24, 2001 1:44 pm

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 5:43 am

Quoting N1120A (Reply 1):
This means that even if DL wanted to fly to Stansted, they would have had to buy a route authority off someone.

US-UK is Open Skies for every airport except Gatwick and Heathrow.
a.
 
N1120A
Posts: 26468
Joined: Sun Dec 14, 2003 5:40 pm

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 5:44 am

Quoting N174UA (Reply 2):
UA owns the slot for JFK-LHR. UA decided to sell the slot, so they and DL agreed. Under Bermuda II, DL has to operate the flight to LGW instead.

Wrong. United sold their NYC-LON authority to DL, who have to operate to LGW (or STN if they want). United leased their LHR slots used for the flight to VS.

Quoting Osiris30 (Reply 3):
Didn't UA get it off Pan-Am for a song in when Pan-Am went bye bye?

United got PanAm's Pacific Network for a relative song several years before they folded and then got their Heathrow rights after that.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
N174UA
Posts: 860
Joined: Thu Jun 01, 2006 4:17 pm

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 5:44 am

Quoting Osiris30 (Reply 3):
Didn't UA get it off Pan-Am for a song in when Pan-Am went bye bye?

 checkmark  UA bought from PA in 1991, and AA bought from TW. UA paid...I think...around $900 million in 1991. Someone will have the exact $ figure.
 
spyderz
Posts: 624
Joined: Sat Apr 28, 2001 8:06 am

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 5:51 am

Under the Bermuda II agreement, only two airlines from each country are allowed to operate a London - US city flight, assuming the route carries over 600,000 passengers per year. Since Newark is considered a seperate US destination, only two carriers are allowed to fly from JFK to London. This was the authority that United sold to Delta, but in actuality Delta was really the only US airline in a position to use the route authority. As mentioned, since Delta are not allowed to fly into Heathrow, they were relegated to operating the flight out of Gatwick.
 
jfk777
Posts: 5867
Joined: Tue Aug 22, 2006 7:23 am

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 6:20 am

PAN AM got from UA $750,000,000 in 1985 for the Asian routes, a princely sum for 6 L-1011-500 and 10 747SP plus the routes. In 1991 UA paid $400,000,000 for the LHR routes, a rich sum but PA sold too cheaply some have argued.
 
MAH4546
Posts: 24604
Joined: Wed Jan 24, 2001 1:44 pm

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 6:21 am

Quoting N1120A (Reply 5):
authority to DL, who have to operate to LGW (or STN if they want).

They could operate to STN regardless of buying UA's authority. STN is Open Skies. That is one reason why Eos and Maxjet fly to STN, because they can easily (in addition, to obviously, other reasons, like lower operating costs).
a.
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 7:12 am

well said spyderz.....................
 
N1120A
Posts: 26468
Joined: Sun Dec 14, 2003 5:40 pm

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 9:12 am

Quoting MAH4546 (Reply 9):
They could operate to STN regardless of buying UA's authority. STN is Open Skies. That is one reason why Eos and Maxjet fly to STN, because they can easily (in addition, to obviously, other reasons, like lower operating costs).

Ah, interesting.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
osiris30
Posts: 2310
Joined: Sat Sep 30, 2006 10:16 am

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 9:14 am

Quoting Jfk777 (Reply 8):
PAN AM got from UA $750,000,000 in 1985 for the Asian routes, a princely sum for 6 L-1011-500 and 10 747SP plus the routes. In 1991 UA paid $400,000,000 for the LHR routes, a rich sum but PA sold too cheaply some have argued.

Wow that Asian pricing sure looks cheap all things considered. As for the LHR price it seems more reasonable.
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
daron4000
Posts: 604
Joined: Mon Mar 07, 2005 12:17 pm

RE: Why Did DL Have To Pay UA To Start LGW-JFK Route?

Mon Oct 16, 2006 11:38 am

I was actually reading about his in Hard Landing today and I thought the figure for Pan Am's LHR routes was 400,000 dollars.