The U.K. government, BA
's comment's notwithstanding, is being prudent and realistic. The know this is a done-deal and they know they can't realistically hold up something that the entire rest of Europe wants without facing some major political consequences (not that being Europe's odd man out has ever really bothered such a Eurosceptic culture). Nonetheless, if Britain is basically offering the terms as described in the Mail, then yes, this basically amounts to complete surrender on the part of the U.K. in terms of holding out for something better with the U.S. Since we all know and have known for a long time that the offer -- from the U.S. end -- was never going to get better, it's smart that the U.K. is finally just picking up the pieces and moving on. BA
will, no doubt, do the same relatively soon.
I also find this excerpt from the article telling:
'The deal on the table falls short', he said. 'If a US carrier can operate from New York to London and on to Frankfurt, but an EU carrier can't operate from London to New York and on to, say San Francisco, then there remains work to be done.' But he also hinted that Britain may be willing to compromise with a 'phased' approach'.
or the U.K. honestly thinks that the U.S. is ever going to agree to complete Open Skies with cabotage, they are completely delusional. Once the U.S. and E.U. strike a deal that opens up the markets and, most importantly for the U.S., opens up Heathrow to other U.S. carriers, the U.S. is basically not going to give the E.U. the time of day down the road when the Europeans inevitably do start making noise about cabotage again. If protectionists in Congress weren't even content to let Europeans own non-controlling, minority interests in U.S. carriers, than I see simply no way whatsoever that the U.S. would ever allow a foreign flag carrier to fly domestic U.S. passengers.
I am also interested, as I said on another thread on this topic here on A.net a few days ago, about the true impact this will have on BA
. I read that Walsh, smartly and honestly, said that in the short-run, the financial hit from this liberalization would likely be "managable," and might possibly even turn out to be a positive in the long-run, and I think he is right. While BA
is no doubt going to see its ultra-premium yields on LHR
-U.S. sectors eroded by more competition, I think this could also lead to BA
finally being able to compete on a level playing field with continental carriers that don't suffer from a dual hub (a la LHR
) problem across the Atlantic. Also, the AA
-BA Antitrust Immunity that would likely follow this deal within a matter of months would no doubt bring tens (if not millions) of dollars to both airlines through joint scheduling and pricing, and better connectivity.
Should be very interesting to watch this whole thing play out.
I agree completely. Delaying the deal by a few months seems like a very reasonable compromise, and something I have no doubt the U.S. will agree to, especially because the U.S. knows full well that even if the deal went through a few months earlier, as planned, Continental and Delta and the other U.S. carriers would have basically nowhere to operate at Heathrow's already-overstretched terminals. Once BA
moves over to T5
in 2008, and opens up almost half of Heathrow's gate capacity, there will be ample terminal space for Continental, Delta or any other airline that wants to come join the fun.
I don't know if it is just protecting, so much as it is also about the equity of the trade. While I think that many (myself included) may ideological and theoretically subscribe to the concept of a completely free and open U.S.-E.U. air market with no restrictions or barriers among carriers, many also recognize that, at least from the American side, it would be far from an equal trade. Giving E.U. carriers the right to fly in the U.S. is giving them a piece of by-far the largest and most extensive domestic air travel market on earth, and also one of the most open and unrestricted. If BA
or Lufthansa wanted to fly from Kansas City to Houston with 10 747s per day, there would be nothing stopping them beyond being able to find suitable gates at those airports. The same would definitely not be true, however, of, say, AA
or Northwest starting an hourly shuttle between London and Paris. Every major airport of any consequence in Europe, serving any major city on the continent, is heavily slot-restricted and capacity-constrained. Whereas cabotage in the U.S. would give E.U. carriers basically free and clear access to basically every U.S. airport save a few (O'Hare, LaGuardia, Reagan, Orange County, etc.), cabotage in Europe would give U.S. carriers access to basically nothing because slots and facilities at just about every major airport in the region are all already taken.
|Quoting AeroWesty (Reply 9):|
Does anyone else see this as extremely problematic, for the massive investments sure to come by American carriers in Heathrow slots, only to have a possible cloud of uncertainty hang over them between 2008 and 2010?
For precisely the reason you state, I doubt there will be much certainty. Populist U.S. lawmakers are not going to be thrilled about allowing foreigners to own larger (albeit still non-controlling minority) stakes in U.S. carriers, but I think they will be even less thrilled about screwing over airlines like Continental and Delta, which are U.S. companies that employ thousands and pump tens of billions into the economy, by jeapordizing the millions in investment that those companies will, as you right say, no doubt sink into Heathrow slots within minutes of this deal going into effect.