ZuluTime
Topic Author
Posts: 166
Joined: Mon May 29, 2006 6:23 pm

BA/BMI Merger - Effect On Transaero?

Thu Jan 05, 2012 11:34 pm

An interesting point arising from the BA planned take-over of bmi.

bmi presently leases slots at Heathrow to Transaero for its twice daily LHR-DME service. The Russian authorities held out for a long time that they would only accept a second UK carrier on LON-MOW if slots were provided at LHR for a second Russian carrier, Transaero, to operate from LHR too. bmi eventually leased slots to them, so uses four sets a day at Heathrow to serve Moscow, two using its own aircraft and two flown by Transaero.

When/if BA completes the bmi take-over, life will return to one UK airline on LHR-MOW in the form of BA. BA could presumably maintain its three daily services with no issue otherwise there would be a risk of retaliation against Aeroflot's LHR-SVO operations at similar frequency. Does the take-over mean that BA will therefore be able to get rid of both bmi and Transaero off LON-MOW and return the route to a two-carrier status which it was for years before bmi came along?
 
ebbuk
Posts: 844
Joined: Thu May 11, 2006 6:47 am

RE: BA/BMI Merger - Effect On Transaero?

Thu Jan 05, 2012 11:59 pm

Quoting ZuluTime (Thread starter):
Does the take-over mean that BA will therefore be able to get rid of both bmi and Transaero off LON-MOW and return the route to a two-carrier status which it was for years before bmi came along?

Well there were some shenanigans with the BMI slots leased out to Nigeria's Arik Air. Soon before the BA takeover was announced, BMI whacked up the lease rate to 50% forcing Arik to drop the slots but complained to its government. After a near diplomatic melt down involving the Nigerian and British government and threats to cut BA's weekly slots to LOS, Arik won 7 new LHR slots.

I think BA will try and play hardball with any other carrier leasing BMI slots. It may take government interventions because I don't think the anti-competition authorities can be bothered.
 
vv701
Posts: 5804
Joined: Fri Aug 19, 2005 10:54 am

RE: BA/BMI Merger - Effect On Transaero?

Fri Jan 06, 2012 12:30 am

Difficult to predict what will happen if IAG (not BA) buy BD. This is because Lufthansa Group may have decided to retain the slots leased to UN (and the income from leasing them out) or it may wish to include them in the sale to IAG.

Indeed we cannot be totally sure that, assuming IAG do buy BD, they will choose to merge BD into BA.. And if they do, it might not be for some months or perhaps even longer.

I am pretty sure that if BD does survive as a separate entity for some time it will be a very different airline only a few months after the completion of the sale. But having moved from a significant LHR slot famine, IAG will be faced with a sudden glut of more than 700 additional weekly LHR slots in addition to the six daily slot pairs it previously bought from Lufthansa Group (that I assume it will take possession of at the start of the new Summer Season). These 800 odd slots could cause severe indigestion if IAG were to immediately merge BD into BA.

Whatever, we are likely to see a significant change in IAG's LHR strategy. It will be interesting days ahead.

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