mikey72
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 1:32 pm

In the last few days I've read in the press that one of VS's main concerns with BA/BD is to quote ...

""Virgin believes UK authorities should also look into the proposed purchase as it will have a considerable impact on domestic flights, particularly overlapping routes such as services between Heathrow and Scotland.""

Seeing as they have never been a domestic carrier what concern is it of theirs ?

Or...are they just frustrated at losing feed into their long-haul network ?

This seems far more likely than ""feigning"" any unfounded worry for the domestic UK traveller.

Indeed why have they never considered a UK domestic operation of their own to provide competition and to support their inter-continental ops. Instead of just focusing on the ""juicier"" element to running an airline from a route perspective ?

One such article below...

http://www.skyport-heathrow.co.uk/20...irgin-urge-uk-competition-reg.html
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
Pe@rson
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 1:50 pm

Quoting mikey72 (Thread starter):
why have they never considered a UK domestic operation of their own to provide competition and to support their inter-continental ops

Lack of slots and BA's short-haul routes from LHR (domestic/European) are often fairly poorly performing vis-a-vis its long-haul. Against this, and with much domestic competition (trains, car, EZY), you'd need to be fairly mad to do what you suggest.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
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Polot
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 1:57 pm

Quoting mikey72 (Thread starter):
Seeing as they have never been a domestic carrier what concern is it of theirs ?

Or...are they just frustrated at losing feed into their long-haul network ?

This seems far more likely than ""feigning"" any unfounded worry for the domestic UK traveller.

They are just trying anything possible to stop the deal because they don't want (strong and direct) competitors to get more slots. Complaining instead of being proactive has been VS's MO for a while now. I doubt they really care all that much about the UK domestic market.
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 2:04 pm

Quoting Pe@rson (Reply 1):
Lack of slots and BA's short-haul routes from LHR (domestic/European) are often fairly poorly performing vis-a-vis its long-haul. Against this, and with much domestic competition (trains, car, EZY), you'd need to be fairly mad to do what you suggest.

So what's their beef then ?

BD's gone bust, nobody else want's to do it, from LHR anyway.

VS don't have the logistical clout to make BD work for themselves. (And everyone knows it)

The deal is the best outcome for all concerned and provides the opportunity for desperately needed route expansion with all the benefits that entails.

Meanwhile the clock is ticking, jobs are on the line and they intend to slow down the completion process ?
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
1stfl94
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 2:18 pm

I think this more a tactical move by VS to get more slots by making the regulators sweat a bit. Branson can compete domestically with Virgin Trains, they can't be getting much feed off BD at the moment given that its few domestic routes are mostly being flown with 49 seat Embraers, the European routes are mostly point to point and the mid haul services are pretty niche. VS would be better off talking to other Euro carriers for feed.
 
captainmeeerkat
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 2:32 pm

BD would feed more into BA longhaul and increase the already stiff competition VS faces on its' network. Those flying BD domestically have the distinct possibility to fly VS longhaul (i.e. EDI -LHR on BD and LHR-NYC on VS) Don't forget also that BD and VS codeshare

With BA capturing the domestic market, people will book BA longhaul too - price integration into one convenient ticket.

Independent carriers in the UK allow VS some level of market segment. Of course, the slots issue is also at play.
my luggage is better travelled than me!
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 2:38 pm

Quoting 1stfl94 (Reply 4):
I think this more a tactical move by VS to get more slots by making the regulators sweat a bit

Well yes but there seems to be a big grey area surrounding VS and slots...do they actually want alot of slots or just a couple ? Nobody seems to know whether they are currently 'leasing' slots or not ?

Quoting 1stfl94 (Reply 4):
they can't be getting much feed off BD at the moment

Apart from missing out on increasing its presence at Heathrow, where Virgin has just 3% of the airport's slots, the carrier counts on BMI to feed about 25% of trans-Atlantic traffic through a code-sharing agreement that might now be terminated.
http://online.wsj.com/article/SB1000...70204464404577113802080663444.html
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richardw
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 2:41 pm

I'm not sure what the regulator can actually do.

Can they enforce that 2 return flights per day must be operated between BHD/DUB/EDI/GLA/MAN and LHR, by a non-BA airline, without any One World codes?

[Edited 2012-01-22 06:42:46]
 
mikey72
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Sun Jan 22, 2012 2:53 pm

Quoting richardw (Reply 7):
Can they enforce that 2 return flights per day must be operated between BHD/DUB/EDI/GLA/MAN and LHR, by a non-BA airline, without any One World codes?

Maybe it should be the enforced resposibilty of any other surviving UK based airline at the airport.

After all - VS benefits ""greatly"" by exploiting the most lucrative routes at LHR maybe they should be more willing to recognise and appreciate this fact by providing the nation with an alternative domestically from LHR too.

Seeing as they are so concerned for our well-being !!

Seems fair to me.

Can't get the slots ? Others have managed.

[Edited 2012-01-22 06:54:59]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
captainmeeerkat
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 3:00 pm

Quoting mikey72 (Reply 6):
Apart from missing out on increasing its presence at Heathrow, where Virgin has just 3% of the airport's slots, the carrier counts on BMI to feed about 25% of trans-Atlantic traffic through a code-sharing agreement that might now be terminated

I think that this is the crux of the problem. Perhaps VS can use a few more slots and expand with their new aircraft but it is the feed that they are really sore about.
my luggage is better travelled than me!
 
planejamie
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 4:54 pm

And once again VS start to throw their toys out of the pram... and once again, nothing comes of it other than just inconveniencing others... remember them complaining about the BA world tails? Did that hurt BA much? Did it balls, they just painted over them, AA/BA joint venture - just slowed it down, same thing will happen here.

Maybe if VS spent the time, effort and money that they do moaning about BA on improving their offering and actually becoming a decent airline again (like they used to be) rather than offering shoddy crew, food and a half-decent product (give me a BA club world seat anytime over the VS angled seat).

From my experience flying BD between MAN and LHR many times (onward to RUH), I can tell you now, I only once saw people connecting from VS (they had VS boarding passes) at LHR waiting by the gate for MAN so that sort of tells you how much of a "feed" they really get. Even more so when you look at the long list of codeshares on those BD domestic flights, VS is a drop in the water...

Plus if they really wanted slots, they wouldn't be leasing them out to other airlines and they'd have bought them when there were several opportunities (remember when BA got 6 new slots, VS made a bit of a fuss afterwards, but no one saw them try to buy them!)
 
sevenheavy
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 5:12 pm

With regards to the feed VS get at LHR, they actually get more from BA than any other. On one hand not surprising given the size of BA's operation. But it does go against the perception of the two airlines as arch enemies!

BA buying BMI was probably the best outcome. LH weren't going to prop up BMI forever, and regardless of the deal, VS would have seen their cash reserves take a hit if they couldn't have done something with BMI quickly ( which is unlikely )

VS do need a few additional slots over the next few years, if only to allow for increased frequencies when the smaller A330s start arriving in a couple of months. There won't necessarily be a huge increase in passenger numbers but frequencies will probably see a steady increase...depending on the speed of economic recovery, or lack thereof!
So long 701, it was nice knowing you.
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 6:31 pm

Quoting sevenheavy (Reply 11):
VS do need a few additional slots over the next few years, if only to allow for increased frequencies when the smaller A330s start arriving in a couple of months. There won't necessarily be a huge increase in passenger numbers but frequencies will probably see a steady increase...depending on the speed of economic recovery, or lack thereof!

What I don't understand is why VS are so bothered by anything BA do ?

For a start VS and BA are like chalk and cheese and VS have a very loyal customer base.

Secondly, VS's size means it should be able to maintain excellent levels of service and products to 'keep it in the game'
You could argue they should have far far superior soft/hard products than the huge legacy carriers in Europe.

Thirdly, they benefit from being able to fly only the most 'choice' routes. (nothing wrong with that) Good luck to 'em !!

Finally, if you compare the size ratio over the years between BA and VS although the gulf is still huge it's alot smaller than it used to be so who cares. BA has always been massive compared to VS. Naturally. This has always been part of their charm and appeal.

I think VS should ditch the dizty self obsessed cabin crew, James Bond-esque commercials and 'cool' image and go for a far more upmarket yet still starchless image.

Sevenheavy I don't dislike VS at all believe it or not. It's just the rhetoric I find annoying.

[Edited 2012-01-22 10:33:23]

[Edited 2012-01-22 10:35:15]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 7:12 pm

Quoting 1stfl94 (Reply 4):
I think this more a tactical move by VS to get more slots by making the regulators sweat a bit.

How would VS get more slots? All that could happen, is that like with AA/BA ATI, BA would have to provide X number of slots for a competitor to compete on say LHR-EDI, LHR-ABZ, LHR-MAN if they want to.

That's what I don't get with VS and their rhetoric over this deal. The ATI deal shows that BA wouldn't just be told to shed X number of slots for anyone to pick up. Rather, if there are competition concerns then BA coul be forced to provide slots for a competitor to come in on specific routes. How does this benefit VS? Does it really want to launch LHR-MAN and LHR-EDI? Would anyone actually want to come into LHR and operate those routes?

As I said, I just don't figure what VS hopes to achieve from their objections other than to be a fly in the ointment of this deal. And putting said deal in doubt will hardly do it favours with LH if it they then went to apply to join Star; whilst I'm sure that should VS apply to have a joint venture with someone on the Atlantic in the next few years Willie Walsh would take great delight on dropping all the stones hurled by VS on their glass house in one go!


If I was running VS I'd have been looking to get a deal done with DL/AF. You can take the moral high ground of saying that alliances are anti-competitive, but that by linking up with DL ex-LHR then they (VS) would be doing so to counter the AA/BA (oneworld) and UA/AC (Star) ATI link-ups out of LHR working with DL (SkyTeam). But that suggestion has some logic behind it, so why do that when you can continue to throw stones and insults at BA and cry foul once more.
Let's Go British Caledonian!
 
sevenheavy
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 9:26 pm

On one hand I can see why VS makes a fuss, but I tend to agree that the execution, as well as the "underdog" spin is a bit old hat and probably does more harm than good......particularly on A.net!

I have to wonder what BA would do in the same situation. It's all part of the game and the U.K. airline industry is far from unique. I'm quite sure that BA priced in a protracted objection by VS. In all of the mergers/acquisitions I can think of in the U.S. for example at least one competing carrier has lodged a complaint of a similar nature

Ultimately, given the track record of commercial war games between the two airlines I would be amazed if anyone expected anything else! the funny thing is that privately, right up to CEO level, the two sides actually get on very well....this is just part of the fun!
So long 701, it was nice knowing you.
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 9:46 pm

Quoting sevenheavy (Reply 14):
the funny thing is that privately, right up to CEO level, the two sides actually get on very well....this is just part of the fun!

Business is business but I'm not so sure Walsh and Branson are playing the back 9 so to speak !
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
sevenheavy
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Sun Jan 22, 2012 10:00 pm

Branson doesn't really have anything to do with day to day running. It's Steve RIdgway and his chiefs that run the airline. I would imagine Branson would be less willing to kiss and make up!
So long 701, it was nice knowing you.
 
sandyb123
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VS Opposition To IAG /BD Acquisition Question.

Sun Jan 22, 2012 10:35 pm

Quoting mikey72 (Reply 6):
the carrier counts on BMI to feed about 25% of trans-Atlantic traffic through a code-sharing agreement that might now be terminated

If this statement is true then Virgin stand to loose 25% of their core trans-atlantic routes? That would start to cause serious problems for VS I'd imagine?

Quoting planejamie (Reply 10):
Maybe if VS spent the time, effort and money that they do moaning about BA on improving their offering and actually becoming a decent airline again

Agreed, but the major problem in that strategy whilst operating from LHR is slots. They can't get slots, so they might aswell try it on with a bit of competitor bashing and see what they can get out of it, as per.....

Quoting FlyCaledonian (Reply 13):
How would VS get more slots? All that could happen, is that like with AA/BA ATI, BA would have to provide X number of slots for a competitor to compete on say LHR-EDI, LHR-ABZ, LHR-MAN if they want to.

I think that's the only way VS will get anymore slots at LHR other than the odd one or two coming up. They're like gold dust!

Quoting 1stfl94 (Reply 4):
Branson can compete domestically with Virgin Trains,

I don't think that's a realistic prospect for the connecting market. Virgin trains goes into Euston which would require a connection to Paddington or Underground to Heathrow. Not sure if the Heathrow low level tunnels could take the Virgin Pendelino trains or if there is a workable link between the west coast mainline and Heathrow. Virgin trains isn't a big player at Edinburgh either as most trips to London require a change.

Quoting mikey72 (Thread starter):
why have they never considered a UK domestic operation of their own to provide competition and to support their inter-continental ops

It's an interesting point about a short haul operation in Europe. They've tried it before but Virgin Group now have experience of operating a short haul business in Australia and America linking into a long haul business, with some very similar market challenges and opportunities. They couldn't start a short haul business from LHR, but I agree that the BA monopoly on the likes of EDI and GLA is not good for customers.

Imagine a scenario where Virgin gave up on long-haul from LHR, sold their slots and based at LGW (where they already have a reasonable presence) and built a feeder short haul UK & Euopean airline (Virgin Europe?) which competed on the connecting market and the O&D stuff.

We know BA aren't going to budge from LHR and the BD acquisition will make them even stronger there. Perhaps Virgin should cut their losses and build a bigger, short, medium and long haul business at Gatwick.

Just my 2 pence.

Sandyb123

[Edited 2012-01-22 14:50:34]
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sevenheavy
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Sun Jan 22, 2012 11:08 pm

Just to clarify, VS gets nowhere near 25% of its transatlantic traffic from BMI (if that is what is meant). It wasn't anywhere close to that even before BMI started cutting back on its key domestic and European destinations.

On a very busy day it wouldn't even be close to 5%!
So long 701, it was nice knowing you.
 
vv701
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 2:52 am

Quoting sandyb123 (Reply 17):
Agreed, but the major problem in that strategy whilst operating from LHR is slots. They can't get slots, so they might aswell try it on with a bit of competitor bashing and see what they can get out of it, as per.....
Quoting sandyb123 (Reply 17):
I think that's the only way VS will get anymore slots at LHR other than the odd one or two coming up. They're like gold dust!

Where there is a will there is a way. According to the LHR slot co-ordinator, Airport Coordination Ltd (ACL), these are the number of slots operated by the two airlines at the start of each Summer Timetable n terms of number of Air Transport Movements per Week:

2003: BA: 3,602. VS:322

2004: BA: 3,744. VS: 284

2005: BA: 3,780, VS: 255

2006: BA: 3.787. VS: 280

2007: BA: 3,829. VS: 322

2008: BA: 3,950. VS: 326

2009: BA: 3,980. VS: 325

2010: BA: 4,028. VS: 286

2011: BA: 4,040. VS: 288

So over this 8 year period - chosen because it is the only period for which data are currently published by ACL - BA have managed to add 438 weekly slots which is more than one and one half times the total number of slots that VS operated at the start of last summer. Put another way if VS had really wanted to challenge BA at LHR they could potentially have an LHR operation two and one half times the size of their current operation if they had applied themselves to maximising their slot holding.

So the availability of LHR slots - particularly when we remember that BA has had to lease out slots to DL in order to gain ATI with AA - is not quite as poor as some would suggest as BA have managed to add the equivalent to 1.5 VS operations to their slot holding in just 8 years. Now they have purchased an extra 6 daily slot pairs, probably equivalent to a further 84 weekly slots, from Lufthansa Group and, if the purchase of BD goes through, will add about another 700 weekly slots to their operations.

Of course it is a free market and most of the additional 1,200 plus LHR slots that BA have or are trying to add to their portfolio since2003 might have been bought by any other airline or airlines including VS.(The reason why it is "most" and not "all" is because BA gained slots will include some transferred from IB to operate additional flights to BCN.)
 
captainmeeerkat
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 7:21 am

Quoting sevenheavy (Reply 11):
With regards to the feed VS get at LHR, they actually get more from BA than any other
Quoting sevenheavy (Reply 18):
Just to clarify, VS gets nowhere near 25% of its transatlantic traffic from BMI (if that is what is meant). It wasn't anywhere close to that even before BMI started cutting back on its key domestic and European destinations.

On a very busy day it wouldn't even be close to 5%!

Not that I doubt you but where do you get these numbers?
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slinky09
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 7:44 am

Quoting mikey72 (Reply 8):
After all - VS benefits ""greatly"" by exploiting the most lucrative routes at LHR

How does VS "exploit" these routes exactly? And please, no rubbish about stalking BA on popular routes Mikey!

Quoting sevenheavy (Reply 11):
With regards to the feed VS get at LHR, they actually get more from BA than any other

Exactly as repeated by your later comment:

Quoting sevenheavy (Reply 11):
With regards to the feed VS get at LHR, they actually get more from BA than any other. On one hand not surprising given the size of BA's operation. But it does go against the perception of the two airlines as arch enemies!

VS and BA collaborate in lots of ways, including outstation engineering for example, as well as the interline agreement in place.

Quoting mikey72 (Reply 12):
What I don't understand is why VS are so bothered by anything BA do ?

If you listen to VS they are bother by lots, however where you have a dominant carrier at the largest base it is llikely that they'll be bothered by that more than others, n'est-ce pas?

Quoting sandyb123 (Reply 17):
I think that's the only way VS will get anymore slots at LHR other than the odd one or two coming up. They're like gold dust!

I find it sad, as a VS fan, that it appears that its strategy is to get slots by whining, I read earlier on ANet that QR is adding a 5th daily LHR flight next year, which goes to prove that airlines (as VV701 pointed out with the BA slot analysis) can, relatively easily gain slots if they really want to. The truth to me seems to be that SRB doesn't want to invest in VS (see mobile, money etc. as now more high profile).
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 8:27 am

Quoting slinky09 (Reply 21):
How does VS "exploit" these routes exactly? And please, no rubbish about stalking BA on popular routes Mikey!

I don't want to get into VS bashing anymore because it's unproductive and negative and truthfully that's not what I'm about.

If VS are going to bring this into their argument......

""Virgin believes UK authorities should also look into the proposed purchase as it will have a considerable impact on domestic flights, particularly overlapping routes such as services between Heathrow and Scotland.

.....when they are not domestic operators themselves ? What's that all about ?

Penalize BA because it does provide an invaluable link to LHR (and has done since before VS was a twinkle in Bransons eye) just because the competition has gone bust ??

Or...block this deal that is going to save jobs and provide great opportunities at LHR just because VS are worried about a couple of routes they don't even serve ?

So like I said.....if they're happy to captialize on the most lucrative routes from LHR and bearing in mind this ''sudden'' concern for Scottish travellers....

....why don't they (they carry the flag of the nation on their aircraft too) put their money where their mouth is and provide the people with an alternative. This is after all the mantra of VS ??
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
Burkhard
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 8:39 am

VS wants a few free slots out of this, and they are happy. The lizard behaves like a hungry crocodile - give him a fly and he will behave like a sleeping alligator again.
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 8:54 am

Quoting Burkhard (Reply 23):
VS wants a few free slots out of this, and they are happy. The lizard behaves like a hungry crocodile - give him a fly and he will behave like a sleeping alligator again.

It's a shame they don't just say...

'come on, fair's fair, bung us a couple of slots and we'll shut up'.....you can't tell me they couldn't do this behind closed doors.

I'm just not so sure that slots is what this is all really about !

[Edited 2012-01-23 00:55:26]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
slinky09
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Mon Jan 23, 2012 9:08 am

Quoting mikey72 (Reply 22):
So like I said.....if they're happy to captialize on the most lucrative routes from LHR and bearing in mind this ''sudden'' concern for Scottish travellers....

Good, I like capitalize more than exploit, that's fair. It's also what everyone else does, e.g. UA doesn't fly from Little Rock to LHR!
 
richcandy
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 9:12 am

Hi

Just a question.

Years ago when I worked in the UK travel industry, passengers from the regions would nearly pay extra to connect via AMS/FRA or maybe CDG rather than fly via LHR. Is that still the case?

With the increase of direct flights from the regions by EY & CO/UA has that also not had an effect on the number of passengers connecting at LHR?

In the very early days of Virgin Atlantic they tried to operate feeder services from Dublin & Maastricht to London.
Also services from London City by city Jet were operated under Virgin branding for a while. There was also the Athens services operated by someone else (sorry can't remember who) using Virgin branding. As well as Virgin Express based in Brussels and the short lived Virgin Sun. Ok Virgin Sun and LCY operations would not really of been used for connections, but my point is that they have had some experience of operating short haul services in Europe and never really made a susses of it.

Its a long time ago, but when Dan Air were being sold to BA, it was very similar. With Virgin being very unhappy that British Airways had bought it.

Just my view and I am no expert. If BA buy BD then I guess a number of the slots will be used to operate new long haul frequencies. However there is a chance that they will increase the frequency of flights they operate to UK cities from LHR and restart Belfast. If VS were to of bought BD would it of been any better? BD was not making money and LH could not make it work so would it not of been more likely that VS would of just closed BD and used the LHR slots to expand their long haul services?

Alex
 
captainmeeerkat
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 9:41 am

Quoting Richcandy (Reply 26):
If VS were to of bought BD would it of been any better? BD was not making money and LH could not make it work so would it not of been more likely that VS would of just closed BD and used the LHR slots to expand their long haul services?

The problem with that is that VS couldn't possibly, in the short term, use all the slots from BD - they don't have the network or a/c for it. They would have to lease very many of them or lose them under the LHR slot usage rules (someone else can explain them better)

Quoting Richcandy (Reply 26):
Just my view and I am no expert. If BA buy BD then I guess a number of the slots will be used to operate new long haul frequencies

A few in this thread and on other threads allude to the fact that BA short-haul is only a small percentage of BA's profit margains and that these slots can, over time, be used to expand long haul services and make life difficult for any competitor from LHR.

If it is the case that the regulator is unable to force BA to use them for short-haul, then it is a valid point.
Does anyone know the regulations on this? Are slots restricted to place, or a/c type for eg?
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mikey72
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 9:44 am

Quoting slinky09 (Reply 25):
Good, I like capitalize more than exploit, that's fair. It's also what everyone else does, e.g. UA doesn't fly from Little Rock to LHR!

UA is not based at LHR so i'm not sure I follow.

You may aswell ask why United (or in your example ExpressJet etc) does not fly LHR to MAN ?

All that aside I totally understand your point but it is VS 'themselves' who are voicing concerns over routes they do not even operate slinky...not me....

""Virgin believes UK authorities should also look into the proposed purchase as it will have a considerable impact on domestic flights, particularly overlapping routes such as services between Heathrow and Scotland.""

I'm just trying to understand their logic.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
richardw
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 9:51 am

Quoting captainmeeerkat (Reply 27):
long haul services and make life difficult for any competitor from LHR.

How many current long haul direct non-stop routes does BA have a monopoly on and are currently making life difficult for competitors?
 
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 10:33 am

Quoting Burkhard (Reply 23):
VS wants a few free slots out of this, and they are happy. The lizard behaves like a hungry crocodile - give him a fly and he will behave like a sleeping alligator again.

But they won't just be given free slots! And bunging them a few as someone suggested would be bribery! As I said, the ATI deal between AA/BA points to the way some conditions may be put on the deal - a new entrant to LHR-EDI for example might have to be provided X number slots by BA for X number of years. Does VS really want to do that? And it would be a bit hypocritical to complain it wipes away choice, etc, then demand slots to go and launch say LHR-GIG which was never a BD route anyway.
Let's Go British Caledonian!
 
captainmeeerkat
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 10:43 am

Quoting richardw (Reply 29):
How many current long haul direct non-stop routes does BA have a monopoly on and are currently making life difficult for competitors
Quoting captainmeeerkat (Reply 27):
can, over time, be used to expand long haul services and make life difficult for any competitor from LHR.

If you quote fully what I said, there is a modal conditional in my sentences - 'can be used', nowhere is there a present time implied,
my luggage is better travelled than me!
 
richardw
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 10:53 am

If BA were going to exploit a monopoly on long-haul routes you'd think they'd be doing it by now, which is why I asked the 'present' question.

Some may say in June 2012 that BA will be losing out to Air China on LHR-Guangzhou route because Air China will have a monopoly on this direct non-stop route.
 
skipness1E
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 11:03 am

Quoting sandyb123 (Reply 17):
Virgin should cut their losses and build a bigger, short, medium and long haul business at Gatwick

Sounds reasonable except if they leave Heathrow, most, and I do mean most, of their premium traffic would stay at Heathrow and their revenue base would collapse. Add in the costs of setting up a new hub and they'd be bankrupt in a year. Ask BA, they tried to hub at LGW by moving routes from LHR. They found that people just stayed at LHR and flew with someone else.
 
captainmeeerkat
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 11:08 am

Quoting richardw (Reply 32):
If BA were going to exploit a monopoly on long-haul routes you'd think they'd be doing it by now, which is why I asked the 'present' question.

Perhaps they need a good few extra slots to do so? No one is saying monopoly but there has to be a realisation that BA's growth can only come at the expense of someone else - be it someone else's growth or current operations. It is simple market dynamics. By having the slots to offer more choice (a la US carriers to Europe, ME carriers to everywhere), you create conditions whereby competiton invariably suffers.
my luggage is better travelled than me!
 
skipness1E
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 11:19 am

Quoting captainmeeerkat (Reply 34):
No one is saying monopoly but there has to be a realisation that BA's growth can only come at the expense of someone else - be it someone else's growth or current operations. It is simple market dynamics. By having the slots to offer more choice (a la US carriers to Europe, ME carriers to everywhere), you create conditions whereby competiton invariably suffers

The growth of company A is only at the expense of company B in this market if company B is offering a poorer product. BA was constrained by a brilliant and innovative competitor for years in VS, something you would not say today. "Simple market dynamics" is survival of the fittest and right now, VS have lost their way badly.

There's a quote from SRB some years ago that he didn't want to make VS too big as it would be too corporate, lose it's soul and not be fun anymore. He gave a list of cities he wanted to serve and that would be it. Alas they ordered a pile of new aircraft and became corporate and their reviews slid. I think SRB's younger self had a point, if they had maintained a level of innovative genius, we wouldn't be having this conversation.

[Edited 2012-01-23 03:21:28]
 
richardw
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 11:21 am

Quoting captainmeeerkat (Reply 34):
you create conditions whereby competiton invariably suffers.

or you just allow BA to compete with Air China on LHR-Guangzhou.
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 11:31 am

VS did ''choose'' to pit itself against a vast european legacy carrier with a domestic operation that feeds its long-haul ops at one of the worlds most congested airports.

If VS has grown to the point (again by choice) where it cannot survive against its alliance aligned, merged and JV operating competitors without short-haul feed then I'm not sure what the answer is for them.

Quoting captainmeeerkat (Reply 34):
Perhaps they need a good few extra slots to do so? No one is saying monopoly but there has to be a realisation that BA's growth can only come at the expense of someone else - be it someone else's growth or current operations. It is simple market dynamics. By having the slots to offer more choice (a la US carriers to Europe, ME carriers to everywhere), you create conditions whereby competiton invariably suffers.

BA's growth is at the expense of nobody. It's a free market, many others have obtained slots. BA is only able to expand to this magnitude because of the unconnected collapse of another carrier BD. Which I might add could have quite easily not have happened leaving BA vastly short of the slots it needs to viably compete in Europe.

This is all about the choices VS has made right from the day they commenced operations at LHR.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
captainmeeerkat
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 11:38 am

Quoting richardw (Reply 36):
or you just allow BA to compete with Air China on LHR-Guangzhou.

That is hardly VS's decision to make.

Quoting skipness1E (Reply 35):
BA was constrained by a brilliant and innovative competitor for years in VS, something you would not say today. "Simple market dynamics" is survival of the fittest and right now, VS have lost their way badly.

Yes that is extremely true, yet it doesn't mean that the biggest operator should be allowed to expand and grow even more because the competition is weak. That is handing them the chance to kill VS completely.

I have no loyalty to VS personally but I just wouldn't like BA to be handed powerful slots to do as it pleases.

Quoting mikey72 (Reply 37):
It's a free market

It's a free market where you fly but not free at LHR. A slot restricted airport is not a free market. I can't take my EMB145 and fly from Timbucktoo to LHR without a slot. it's a free market if you pay for the privilege only.
my luggage is better travelled than me!
 
richardw
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 12:01 pm

Quoting captainmeeerkat (Reply 38):
Quoting richardw (Reply 36):
or you just allow BA to compete with Air China on LHR-Guangzhou.

That is hardly VS's decision to make.

The BD take over would allow BA to compete with Air China, that would be healthy competition and not

Quoting captainmeeerkat (Reply 34):
conditions whereby competiton invariably suffers

VS can utilise its slots to compete as well, but it may not want to because this route may not be as profitable as its existing routes.
 
vv701
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 12:34 pm

Quoting captainmeeerkat (Reply 20):
Not that I doubt you but where do you get these numbers?

From the annual reports listed here:

http://www.acl-uk.org/reportsStatistics.aspx?id=98&subjectId=33

Quoting Burkhard (Reply 23):
VS wants a few free slots out of this, and they are happy.

Do they? Happy? Why? Never!

Look at the data in Reply 19. Or you can access it for yourself through the above link. They show that at the start of Summer Season 2003 VS operated 322 weekly LHR slots. They also show that by the start of Summer Season 2011 VS were operating over 10 per cent FEWER slots, namely 288. So why would more slots make them happy?

In this eight year period BA increased the number of weekly slots they use by 438. On the other hand VS reduced their slot holding by 34. And how do you think VS and Branson might react to an offer from IAG of some free slots? I can see the tabloid headlines now: 'Branson alleges BA bribe'.
 
Bongodog1964
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 12:34 pm

Quoting VV701 (Reply 19):
Where there is a will there is a way. According to the LHR slot co-ordinator, Airport Coordination Ltd (ACL), these are the number of slots operated by the two airlines at the start of each Summer Timetable n terms of number of Air Transport Movements per Week:

2003: BA: 3,602. VS:322

2004: BA: 3,744. VS: 284

2005: BA: 3,780, VS: 255

2006: BA: 3.787. VS: 280

2007: BA: 3,829. VS: 322

2008: BA: 3,950. VS: 326

2009: BA: 3,980. VS: 325

2010: BA: 4,028. VS: 286

2011: BA: 4,040. VS: 288

So over this 8 year period - chosen because it is the only period for which data are currently published by ACL - BA have managed to add 438 weekly slots which is more than one and one half times the total number of slots that VS operated at the start of last summer. Put another way if VS had really wanted to challenge BA at LHR they could potentially have an LHR operation two and one half times the size of their current operation if they had applied themselves to maximising their slot holding.

The above analysis is probably rather simplistic, rather than looking at the overall slot gains BA have made, if you ise a % figure, which I believe is how ACL reallocate spare slots - all spare slots issued on the basis of existing slot allocation, BA have increased theirs by 12% over 8 years. IF VS had managed the same they would nopw stand at about 350 slots, which allow them 5 additional long haul rotations each day.

Quoting slinky09 (Reply 21):
Quoting mikey72 (Reply 8):
After all - VS benefits ""greatly"" by exploiting the most lucrative routes at LHR

How does VS "exploit" these routes exactly? And please, no rubbish about stalking BA on popular routes Mikey!

VS "exploit" them by virtue of a straight forward business decision - use our limited resources (slots) in order to fly to the most profitable destinations, thus we generally have 3 or more carriers on the 10 or so most lucrative long haul routes, BA, VS and a carrier from the other end.

The downside of VS gaining slots at the expense of BA is that it might well be worse not better for customer choice. BA are inferring that they want to use the slots to open new routes to Asia, either routes not served from LHR at present, or routes with only a destination carrier. VS on the other hand, will probably just use them to launch services on the 10 next most profitable routes from LHR whih already have BA and another carrier operating them.
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 12:59 pm

Quoting captainmeeerkat (Reply 38):
Yes that is extremely true, yet it doesn't mean that the biggest operator should be allowed to expand and grow even more because the competition is weak. That is handing them the chance to kill VS completely.

The competition is as weak as it chooses to be. If you constantly and over time make the wrong decisions at the highest level (VS) you go bust. That's business and why (BD) we're having this debate.

Quoting captainmeeerkat (Reply 38):
It's a free market where you fly but not free at LHR. A slot restricted airport is not a free market. I can't take my EMB145 and fly from Timbucktoo to LHR without a slot. it's a free market if you pay for the privilege only.

W701's data on slots....

2003: BA: 3,602. VS:322

2011: BA: 4,040. VS: 288

Just about says it all.

VS is a great little airline that survives by offering an alternative on very high performing longhaul routes from the 'fail safe' that is LHR. It should remember this before it pokes its nose into the domestic situation at LHR. It is liable to get chewed off.

BA like LH, AF etc is a former state owned legacy. For all the advantages that brings i.e inherited slots and dominance at their respective hubs it also brings alot of disadvantages. To a certain degree they still have politicians to answer to despite their 'private' status.

Balancing this with a healthy bottom line is not always easy. Considering the rise of LCC's what percentage of the traffic on BA's domestic flights into LHR are transfer passengers anyway ? I seriously doubt the viablity of having more than one airline at LHR offering domestic service. Without the benefit of 'feed' it's just not profitable overall. BD is the proof !!

The LCC's take up the slack and in alot of cases these days they are actually working out more expensive !

Look at it this way. The fact that LHR is restricted is a disadvantage for VS 'aswell' as BA.

The one fact that must be considered though is that UK PLC needs to be able to provide links to the developing markets of the world with the limited resources at LHR. (Now more than ever)

BA is by far best placed to achieve the above. There is so much more to this than VS would have the public believe.

[Edited 2012-01-23 05:26:50]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
slinky09
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 2:17 pm

Quoting VV701 (Reply 40):
They also show that by the start of Summer Season 2011 VS were operating over 10 per cent FEWER slots, namely 288. So why would more slots make them happy?

Once more, VS leased 28 weekly slots from UA for three years from 2007 to 2010 ... so they haven't been shedding slots, just not acquiring any. The remaining small difference is unexplained.

Quoting Bongodog1964 (Reply 41):
VS "exploit" them by virtue of a straight forward business decision -

"Exploit" I take to mean "to make use of unethically" over other meanings - I prefer Mikey's term of capitalize, which is just what AA does, UA does, DL does out of Heathrow, etc. All compete on the same lucrative transatlantic routes as do BA and VS. That to me, as you say, is a common sense business decision not exploitation.
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 2:49 pm

VS wants ths UK authorites to to be heavily involved because it knows the EU will judge the deal based upon BA's peers in the EU i.e LH, AF etc So basically they havn't got a snowballs chance in hell of things going their way.

However, and unfortunately for VS whether they admit it or not the UK authorities are not going to block any deal that is so overwhelmingly good for all concerned including the economy of the UK itself and those who's jobs are in the balance.

Quoting slinky09 (Reply 43):
"Exploit" I take to mean "to make use of unethically" over other meanings - I prefer Mikey's term of capitalize, which is just what AA does, UA does, DL does out of Heathrow, etc. All compete on the same lucrative transatlantic routes as do BA and VS. That to me, as you say, is a common sense business decision not exploitation.

You cannot compare AA, UA, DL and BA to VS. The first four all operate from main bases where they have a short-haul domestic network that to a certain degree feeds their long-haul ops. Many of these short-haul routes by themselves would lose money.

Some long-haul and short-haul routes are akin to Siamese twins. One cannot survive without the other.

So VS's presence at LHR is to a degree 'parasitic'. They have entered an already very competitive and established market and been able to basicallly pick off the best (most lucrative and able to stand alone) long-haul routes without 'any' of the hard work or ground work that established them. This at a stroke puts BA at a disadvantage and its UK domestic network at risk....

...Most nationally important airlines are able to support weaker but still important routes (especially domestic) by self-subsidising them thus keeping their home customers happy. When that core revenue starts being 'sapped' this is no longer possible - routes get cut - everyone wants to know why - and people start moaning !!

The overall result is a cut in viable routes which is bad for the consumer. Competiton wise it's a unique industry in that respect. I've said so all along.

[Edited 2012-01-23 06:52:02]

[Edited 2012-01-23 06:53:57]

[Edited 2012-01-23 06:55:17]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
slinky09
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 2:56 pm

Quoting mikey72 (Reply 44):
So VS's presence at LHR is to a degree 'parasitic'. They have entered an already very competitive and established market and been able to basicallly pick off the best (most lucrative and able to stand alone) long-haul routes without 'any' of the hard work or ground work that established them. This at a stroke puts BA at a disadvantage and its UK domestic network at risk....

So is UA and DL's presence at LHR also parasitic, or Air Nigeria, or any other airline that has opened routes that compete with an established airline? Doesn't matter to me if they're bases or not.

Is BA's entry to the LAS route parasitic after VS established it (albeit from LGW)?

Really Mikey ...
 
richardw
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 3:00 pm

Quoting mikey72 (Reply 44):
the UK authorities are not going to block any deal that is so overwhelmingly good for all concerned including the economy of the UK itself and those who's jobs are in the balance.

But could there be strings attached to the deal for IAG?
 
mikey72
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 3:11 pm

Quoting slinky09 (Reply 45):
So is SA)">UA and SA)">DL's presence at LHR also parasitic, or Air Nigeria, or any other airline that has opened routes that compete with an established airline? Doesn't matter to me if they're bases or not.

Is BA's entry to the LAS route parasitic after VS established it (albeit from LGW)?

Really Mikey ...


Of course it matters if they're bases. For a start the costs are much higher to operate from a base. United and Delta or Air Nigeria don't have to base aircraft, crew, maintenance etc at LHR to be able to fly there.

How many full service scheduled carriers fly non-stop between LHR and JNB for example ?

SA, BA and VS. What do you think happened to BA's yields when VS entered the market ?

Their costs didn't drop - they were just chasing fewer customers. VS's entry into the market immediately puts them and BA at a disadvantage to SA. Less revenue for BA to support its less profitable operations. This will of happened in every market VS entered.

This is great for VS I don't disapprove BUT VS don't have less profitable routes to support (it's all deluxe primo stuff) the two cannot be compared as airlines.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
vv701
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VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 4:57 pm

Quoting Bongodog1964 (Reply 41):
The above analysis is probably rather simplistic, rather than looking at the overall slot gains BA have made, if you ise a % figure, which I believe is how ACL reallocate spare slots - all spare slots issued on the basis of existing slot allocation,

The EU regulation on slot allocation does not allow ACL to allocate spare slots in proportion to existing slot usage. On the contrary it requires that preference be given to what it calls "new entrants". Here is a synopsis of the EU Slot Allocation Regulations:

"Slot pool and new entrants: all slots that become available (due
to the introduction of more efficient flight control technologies,
due to the 'use it or lose it' rule or because they are voluntarily
returned to the coordinator) form the slot pool and are
preferentially allocated to new entrants."

You will find more here:

http://privatewww.essex.ac.uk/~dcond/SA.pdf

I cannot be sure that the growth in BA slots does not include any allocated by the slot coordinator. But the figures for the start of the Summer 2008 season compared with the previous year are illustrative of a telling story.

The start of the Summer 2008 season was also when the EU/USA Open Skies agreement, signed in the April of the previous year, became operative. It was when three new entrants, CO, DL and US started LHR operations. The widely publicised CO purchase of expensive LHR slots at that time is well known as is the transfer of slots from AF to its partner, DL. Of course these three airlines would, under EU rules, have preferentially received any slots to be allocated by the slot coordinator. Clearly they did not receive any such slots.

An examination of my original figures will show that at exactly that time BA had its second biggest increase in slots in any one year, namely 120. Clearly if CO and DL did not get any slots from Airport Coordination Ltd then neither did BA as this would be in violation of EU rules.

It is not surprising that no slots were available for allocation by ACL. Page four of their Summer 2008 report shows not no new daily arrival slots became available (although there were 2 new daily departure slots). No slots were confiscated although ACL did impose a few low level fines on airlines for slot misuse. And, not surprisingly, no airline returned unwanted slots to ACL when they had the alternative of selling them on the open market or leasing them to another operator.

I will repeat that while BA increased their slot holding by 438 slots between 2003 and 2011, VS reduced their slots by 34. If you require these figures in percentages that is plus (repeat, PLUS) 12 per cent for BA and minus (repeat, MINUS) 11 per cent for VS.

I suppose the important message in these percentage figures is that VS proportionately reduced its LHR presence by the same amount as BA increased theirs.
 
captainmeeerkat
Posts: 349
Joined: Sun Aug 15, 2010 7:13 am

VS Opposition To IAG /BD Acquisition Question.

Mon Jan 23, 2012 5:49 pm

Quoting richardw (Reply 39):
The BD take over would allow BA to compete with Air China, that would be healthy competition and not

If BA needs to buy BD just to compete with one airline on one route, send WWW (Wee Willie Wonderful) back to EI

Quoting VV701 (Reply 40):
From the annual reports listed here:

http://www.acl-uk.org/reportsStatistics.aspx?id=98&subjectId=33

Very interesting, thanks for that. Where does it say that only 5% of BD customers connect to VS?

Quoting mikey72 (Reply 42):
W701's data on slots....

2003: BA: 3,602. VS:322

2011: BA: 4,040. VS: 288

Slots are fine but my argument is that VS's connecting traffic declines dramatically if their codeshare partner (BD) is sucked up by BA

Quoting mikey72 (Reply 44):
This at a stroke puts BA at a disadvantage and its UK domestic network at risk....

How does VS having a few select international routes affect the BA domestic market?

Quoting mikey72 (Reply 44):
...Most nationally important airlines are able to support weaker but still important routes (especially domestic) by self-subsidising them thus keeping their home customers happy

Aha, so BA is the 'natioanlly' important airline that needs to be protected to keep the home-crew happy?
my luggage is better travelled than me!

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