Nuair: your right in saying it is unlikey that britain will have an 'open skies' policy yet i think this time the KLM/BA deal can go ahead, although talk of a mega alliance with a merged AA/Northwest is unlikey since AA is still busy with the TWA merger.
KLM AND BA complete each other in a number of ways. KLm is concerned about expanding it route network in europe, BA is looking to focus on the higher-end of customer which bring bigger yields.
BA and KLM both own low-cost airlines, this would create competition problems and Ryanair/easyjet would have a hissy fit and the prospect of GO and Buzz being merged. However, GO is to be sold, this decreases easyjet/ryanair competition concerns and Ba can still have a low-cost airline to fight them, but being under klm control means it is seen as less threaterning...
BA and KLM also own uk airlines. BA is currently intergrating Brymon airways, a former franchise, with British Regional which was recently bought along with Manx airlines. It is moving away from uk franchise partners and by intergrating them BA will be provided with a cohesive domestic operation.
KLM also owns klumUK, this ownership would be used as a weapon to fight the BA/KLM deal, let a study of KLMuk shows that this airline isnt really a uk airline. It doesnt fly to other parts of the uk, unlike the former airuk, which it bought. In fact it mainly flies to amsterdam and can hardly be described as a new airuk, in fact a shadow of its former self. KLMuk may have to be sold off as part of the deal though, to keep the EU happy, it could then be developed as a rival to Ba in the uk by being sold to another airline, this way competition concerns are further decreased.
so far GO and klmuk look casualties in this deal, if it went ahead.If they were sold to rival european airlines then this would lessen the concern.
next landing slots, the old chesnut. The fact is that ba is currently downscaling operations at Gatwick as much as possible and is therefore decreasing in size and landing slots. Heathrow is also being developed as a major star alliance hub, therefore BA can easily point that it should be allowed to develop, cant have one rule for star and another for BA.
Amsterdam airport would rightly be a second hub for BA/KLM and would of course raise issues, let KLM is already the domiant force at amsterdam and it happens to own it. Just how may hubs does BA have at amsterdam?Im sure that a ba/klm link-up isnt going to force every airline out of the airport.
This is not to suggest that a BA/KLM deal would be plain sailing, it is to simply show that problems can be over run when people put their minds to it.
BA/KLM would have to of course make concessions with regard to landing slots. I think a complete pull out of gatwick would be in order, if not already occuring as well as a decrease in flights to heathrow. Perhaps Ba klm would look at having a small base at standstead. klm already fly there and what with GO to be sold, BA may like to start a small operation there, especially since lufthansa fly there. This is of course, speculation and may be unlikely since Ba has said it wishes to concerntrate on heathrow, though a merger with another european airline would see Ba having to make some concessions to other airlines, me thinks AF and lufthansa as well as iberia and aer lingus would eb the main winners since lufthansa and af are the major rivals and iberia and aer lingus are one world partners. i also think concessions to BMI may have to be in order.
next the alliance problem. KLM of course is strongly linked to Northwest while BA is linked to american., though the relationship isnt as close and complex due to eu rules. KLM would join oneworld, no question about it. this would be allowed since the Star alliance contains the following:
BMI(25% owned by lufthansa)
SAS ( with braathens seeming to be joining)SAS is actually a group of airlines.
Austrian Airlines(which owns lauda air and tyrolean and happens to be 25% by lufthansa)
Oneworld has BA, aer lingus, iberia and finnair, though the capicity of aer lingus and finnair is smaller than SAS and probably austrian airlines. bmi is also expanding.
The other issue is northwest and AA. I doubt that BA/klm could have both as a partner and in order to calm the waters, bA may not go ahead in any further deal with AA and in fact it may even decrease co-opeartion down to the level of rest of one world,except of course qantas who is 25% owned by BA.
any further BA/AA deal is unlikely to to the major hurdles and BA would encounter opposition by having Northwest as its parnte, though this opposition would not be as rational as a BA/AA lin-up and most of the issues would be delat with quicker, in fact i think by chosing Northwest over AA BA/klm are decreasing the problems and issues raised, yet of course a deal between BA and any other airline is always meet with mass hysteria coupled with predictions of impending doom for the aviation industry.
BA already faces a lot of competiton, low cost airlines such as ryanair and easyjet are stealign customers, and are even taking buisness customers away. BA also has virgin and bmi as transaltanic rivals, therefore it has two major other airlines as competitor from the same country. How many european countries have this? Central europe is dominate by the twins of lufthansa and austrian who do nothing to add for competition and happen by been in the largest, most anti-competitive airline of them all.
France is dominated by AF, which runs a complete monopoly, aom.air lib and air littorial are falling apart.
spain has iberia and air europa, thats it for major airlines in spain. Portgual has tap with portugesa, both happen to be in the 'qualifier' group or what is left of it.So one can see that Britain is the most competive with regard to european airlines.
Therefore the following need to be addressed in order for BA/klm to pass through.
1) go would have to be sold, asap, its up for sale and the price may have to be reduced.
2) Concessions to lufthansa and bmi at heathrow, though of course bmi still wouldnt be able to fly to the USA from heathrow, it could though from Gatwick.
3) complete downscaling at gatwick airport
4) reduction in landing slots at heathrow and amsterdam to other airlines
5) sale of KLMuk to another european airline.
6) promise not to go further with AA co-opeartion, in fact decrease scale
7) acceptance into one world of klm and northwest
8) part sale of deutsch Ba to another airline, keep lufthansa happy
9) stake in iberia may have to be sold as well.
10) may open second, smaller british base at standsted.
if these can go ahead then klm/BA could pass though the EU and would stand more chance of being passed than ba and a non-european airline since the EU is more liekly to pass a deal with a dutch company, believe me the eu can take different lines when it needs to.
The dutch and Uk authorities are likely to ok it and a northwest/ba link would pass through the us government, so the major problem would be the EU...apart from the managerial structure...BA would have the chief exc, klm would also have a margin of independece, especially with regard to dutch operations.
KLM would also have to keep its livery, perhaps with a BA speadmark. the holding group would be BA/KLM and i think the airline would be KLMBA for dutch opeartions and BAklm for UK operations.This way both sides can be ahppy and KLM could save face, especially in holland.
so interesting times ahead, i do realise that it wouldnt be plain sailing, though with a yes we can attitude it can happen.
It is amazing what can be accomplised when nobody takes the credit