Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
User avatar
STT757
Topic Author
Posts: 14221
Joined: Tue Mar 28, 2000 1:14 am

CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:30 am

Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
User avatar
Aloha717200
Posts: 3879
Joined: Mon Aug 18, 2003 4:50 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:36 am

What i find funny is that right in the middle of this article slamming BA....is a British Airways advertisement.  Laugh out loud  Big thumbs up
 
donder10
Posts: 6945
Joined: Sun Oct 21, 2001 5:29 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:39 am

CO has 4 dailies at LGW when CLE is dropped so BA's purchase of these slots makes CO's entrance to the LHR market a more realistic prospect in the short term.
 
User avatar
EA CO AS
Posts: 15799
Joined: Wed Nov 14, 2001 8:54 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:40 am

I love Gordon, but I don't think his argument is valid here. The Bermuda II agreement says only two U.S. flag carriers may fly into LHR.

UA's desire to sell some of their slots doesn't change that agreement, so CO could not have operated flights to/from LHR, even if UA GAVE the slots away.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
757KSLC
Posts: 221
Joined: Tue Oct 07, 2003 10:52 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:43 am

Sounds like BA is trying to gain a monopoly on Heathrow? Unless BA is the cheapest route through London, couldn't that back fire and create more traffic and business for a more diverse LGW?
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:49 am

Sounds like BA is trying to gain a monopoly on Heathrow?

A monopoly????

With barely 40% of the market, BA's control over its home hub field is far less than AA, UA, DL, NW, LH, CO, AF, KL, AZ, CX, SQ, QF, etc have over Ft.Worth, Chicago, Atlanta, Paris, etc.

How on Earth can that be called a monopoly?!
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
andersjt
Posts: 367
Joined: Tue Jul 22, 2003 3:50 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:51 am

There were negative responses posted to the news that UA had sold the slots to BA. "Oh No! UA is going under and needs the cash."

Let's say UA had the authority to sell them to an American carrier, and CO came up with the winning bid, psychologically, how would that news have been received?

Oh how I long for the day when the skies were truly Friendly!
 
CALMSP
Posts: 3514
Joined: Wed Aug 13, 2003 3:18 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:52 am

they are moving more flts to LHR, they are transforming their US Gatwick flts to LHR,
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 7:56 am

they are moving more flts to LHR, they are transforming their US Gatwick flts to LHR

The only reason they were able to move SAN/PHX/DEN to LHR is because they were the sole carrier on those routes, yet managed to generate an expected parameter of USA-LON traffic flow over a given period (I believe it's 2yrs). TPA failed to do so.

BA cannot switch ATL/DFW/IAH/MCO over for that reason.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
donder10
Posts: 6945
Joined: Sun Oct 21, 2001 5:29 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 8:03 am

Sounds like BA is trying to gain a monopoly on Heathrow?

A monopoly????

With barely 40% of the market, BA's control over its home hub field is far less than AA, UA, DL, NW, LH, CO, AF, KL, AZ, CX, SQ, QF, etc have over Ft.Worth, Chicago, Atlanta, Paris, etc.

How on Earth can that be called a monopoly?!

Very true Concordeboy.Plus,BA have competition on most routes out of LHR.
 
CALMSP
Posts: 3514
Joined: Wed Aug 13, 2003 3:18 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 8:06 am

I thought they switched them b/c some latter part of the morning slots opened up
 
RickB
Posts: 807
Joined: Mon May 19, 2003 3:11 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 8:10 am

Dear Mr Bethune,

Life is a bitch aint it  Wink/being sarcastic

Virgin in the UK have a Wine club - maybe Bethune and Branson could create a whiners club.

Seriously though - access to LHR is down to Bermuda II - not BA. As others have stated - BA have around 40% of the slots at LHR - far less than other major carriers have at their own hubs. And since when is having 4 airlines competing on the same route considered uncompetitive? How many airlines fly AMS > JFK ?

RickB

[Edited 2003-10-16 01:11:54]
 
artsyman
Posts: 4516
Joined: Wed Feb 28, 2001 12:35 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 8:18 am

As others have stated - BA have around 40% of the slots at LHR - far less than other major carriers have at their own hubs.
*********

This is a slightly misleading stat in that BA and virtually anyone else that has a reasonable standard of security can fly into any airport in the US. All American carriers can fly as many flights as they want into more or less every airport in Europe except LHR. BA / AA have resisted the opening of these slots fairly agressively thus far. When trying to negotiate an open skies agreement, BA / AA balked everytime when told they could have much of what they want as long as they open up LHR to other carriers, and they blocked it every time.

LHR is the only major airport in the world (I mean Top 10 type airports) that has such a restriction on it. Delta, Northwest, Continental etc are not allowed to fly there despite their obvious market share.

Monopoly it isnt, as mentioned above, there are 4 of them, not one, but it certainly isn't far away from it.

Jeremy
 
RickB
Posts: 807
Joined: Mon May 19, 2003 3:11 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 8:36 am

Out of interest - was there anything stopping CO buying the slots from UA - okay they couldnt use them because of Bermuda II - but could they of actually bought them?

RickB
 
artsyman
Posts: 4516
Joined: Wed Feb 28, 2001 12:35 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 8:41 am

Out of interest - was there anything stopping CO buying the slots from UA - okay they couldnt use them because of Bermuda II - but could they of actually bought them?
********

I think this is part of the frustration. These slots did not seem to go for public sale, and if BA really paid the amounts quoted for the slots this time around, then an Open LHR agreement is nowhere on the cards for the near future as they would not have spent that much money if they could lose the benefit of them in the near future.

Jeremy
 
User avatar
B747-437B
Posts: 8931
Joined: Thu May 30, 2002 6:54 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 9:01 am

All American carriers can fly as many flights as they want into more or less every airport in Europe except LHR

Actually I was surprised to find how close to capacity FRA is operating right now. But apart from those two, you are pretty much spot on.
 
User avatar
scbriml
Posts: 19537
Joined: Wed Jul 02, 2003 10:37 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 9:06 pm

This is a slightly misleading stat in that BA and virtually anyone else that has a reasonable standard of security can fly into any airport in the US.

Is this actually true? I thought Bermuda II specifically restricted the number of US destinations that UK carriers can access.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
Leskova
Posts: 5547
Joined: Wed Oct 08, 2003 3:39 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 9:22 pm

As long as a country does not have an open-skies-agreement with the US, they certainly are restricted as to where they fly - this depends on the respective treaties, but I guess that with LHR blocked from further access, the US side most likely would not grant BA/VS access to every airport on their side of the pond that these two would like to fly to...

... on the other hand - BA already does fly to quite a large number of US airports, so perhaps Bermuda II - may it rest in peace as soon as possible - probably is a bit skewed...
Smile - it confuses people!
 
eham
Posts: 402
Joined: Thu Sep 04, 2003 9:00 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 9:33 pm

maybe the US carriers can add some more flights info AMS  Big thumbs up
we have plenty of capacity and we just opened a new runway.....

where are you waiting for guys  Laugh out loud
 
eg777er
Posts: 1782
Joined: Fri Feb 04, 2000 11:11 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 9:33 pm

This is a slightly misleading stat in that BA and virtually anyone else that has a reasonable standard of security can fly into any airport in the US. All American carriers can fly as many flights as they want into more or less every airport in Europe except LHR.

This is a slightly misleading statement as BA (and any other EU carrier I might add) are only able to fly into the US and fly back out again.

Until the US removes the following, highly restrictive rules on:

1.) Foreign carriers operating, for example, JFK-LAX.
2.) Foreigners (e.g. Branson) owning a US airlien.
3.) and add any other protectionist crap such as "Fly America" rules.....

then there's a snowball's chance in hell that the British Government (NOT BA!) will open up LHR.
 
sevenair
Posts: 2981
Joined: Sun Feb 04, 2001 7:18 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 10:05 pm

Well, i think its good, LHR is the 'lead' airport of Britain. KL have the most slots in AMS, LH have most slots in FRA, so I think its only fair that BA have most share at LHR. BA's share of LHR slots are a lot smaller in percentage compared to LH, KL and AF in their home airports. SO let CO be outraged, im sure they have a majority share in the base airport.
 
triscl
Posts: 138
Joined: Tue Jul 15, 2003 4:08 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 10:24 pm

My memory of microeconomics class is a little hazy, but I believe the USA-LHR market could be considered an oligopoly, rather than a monopoly, and maybe someone on here can draw the graphs to illustrate why that is inefficient. And while I think the prices on USA-LGW and USA-LHR are certainly closely related, the "product" delivered by an airline flying into Heathrow is different from that of an airline flying to Gatwick.

Then again maybe the inefficiency, ie higher prices, can be seen, in its effect, as a tax to limit the number of people flying into an over-crowded airport. Maybe things will be different post-heathrow expansion.
 
motech722
Posts: 177
Joined: Sat Aug 30, 2003 12:10 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 10:44 pm

Andersjt had a good point early on in this thread, stating, "Let's say UA had the authority to sell them to an American carrier, and CO came up with the winning bid, psychologically, how would that news have been received?"

In many of the threads about United and their fight to stay alive, people have said that the worst thing a company can do is sell off any assets as it brings morale down. What would have happened if CO would have gotten these slots or anyone else? It would possibly bring morale down at UAL. At the same time though, if these slots are not being used by UAL, and they need the cash, then it seems like a good deal for them.

But let me ask this, what would the effect be if CO had been able to get these slots? If CO cannot flying into LHR due to the Bermuda II agreement, then what good is having them? Gordon is furious that BA got these "slots held by a U.S. carrier", but what if these slots would have been sold to American instead of BA? With all the fear about the BA-AA alliance dominating the Atlantic, would it not be reasonable to assume that Gordon would be angry about that too? And think of the impact it would have on UAL's workforce, selling these slots to their chief US rival.

From what I understood at http://www.atwonline.com, BA won these slots in a blind e-auction staged by United. This tells me that UAL did not intentionally sell the slots to BA, rather BA was the highest bidder. Because of that, I question if CO even made a bid for these slots, or better yet, who else bid in the "blind e-auction"? This is the question that no one is able to answer because of the nature of the bid.
 
747firstclass
Posts: 821
Joined: Tue Mar 28, 2000 2:45 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 10:46 pm

A few people forgot the fact that there is room for expansion of more flights and runways etc at AMS, CDG, FRA That is not the case at LHR, quite the contrary.In addition France, Netherlands and Germany have open skies with the US. The UK does not.Consequently, the outcry when BA continues to buy and hoard slots at LHR so no one else may start or increase service there. If other carriers could expand or start service at LHR and somehow be guaranteed slots by the UK Govt. BA might not be forced to surrender slots to enhance competition.
Having said that, my theory is this, BA knows the day will come when there will be more competition at LHR and a US/UK openskies. So by hoarding slots now and if they are forced to give some up, they will still have roughly the number of slots that they have now.
A final word, remember that no foreign airline has ever paid for a slot at a US airport. So if BA and the UK govt. forces the US carriers tpay for eventual slots at LHR--look for all hell to break loose. I think you will see BA paying for slots at JFK, LAX, MIA, ORD etc. etc. etc.
 
artsyman
Posts: 4516
Joined: Wed Feb 28, 2001 12:35 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Thu Oct 16, 2003 11:59 pm

Foreign carriers operating, for example, JFK-LAX.
*********

This is a domestic flight, and is not really what we are talking about. I don't see Continental, AA, Delta flying from London to Manchester or Glasgow.

KL have the most slots in AMS, LH have most slots in FRA, so I think its only fair that BA have most share at LHR

I don't think the amount of slots, or the % of slots is the issue. At FRA and at AMS, anyone can fly there, it may be you wont get a good slot, or you may not get as many slots as you want, but if you want to fly there, you can, but with LHR you will not be given a slot at any time, or in any number. LHR is about a backwards treaty, not slot limitations, otherwise UAL selling slots would go for auction to the highest bidder, not just automatically to BA. Plenty of airlines give up slots at LHR, where do they always go ?...ahh to BA. So BA has 40%, fair enough, but DL/NW/CO etc who are arguably the 3rd, 4th and 5th largest carriers in the world or there abouts ...have a combined 0% between them, yet can fly to any other airport in Europe.

It is the way it is, so be it, but it certainly isn't consistent with fair practices.

[Edited 2003-10-16 17:15:44]
 
donder10
Posts: 6945
Joined: Sun Oct 21, 2001 5:29 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 12:30 am

This is a domestic flight, and is not really what we are talking about. I don't see Continental, AA, Delta flying from London to Manchester or Glasgow

UA do LHR-BRU/AMS.UK and even Euro airlines can't do JFK-BOS etc.


I believe that BA will cede the slots needed for maybe 2 US airlines to shift their ops to LHR but no more than that.
 
thadocta
Posts: 384
Joined: Mon Aug 13, 2001 9:44 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 12:49 am

I'd rather fly out of LGW anyway, is a much better airport with far easier access (for me, anyway).

Dave
 
BHMNONREV
Posts: 1237
Joined: Thu Aug 28, 2003 9:17 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 12:59 am

If I'm not mistaken, UA is not allowed to carry any local traffic between BRU/AMS and LHR. These flights are for connecting passengers only. If BA presented a plan to the DOT/DOJ to set up a connecting hub at say JFK and carry only transatlantic passengers to final destinations in the US, I would believe this not to be a problem, ala what IB has set up at MIA.

The current situation at Heathrow is nothing more than a cartel. The British government controls the capacity, the 4 airlines control the outrageous airfares charged.....
 
CB777
Posts: 1136
Joined: Wed Sep 08, 1999 8:13 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 12:59 am

Donder10 wrote:
UA do LHR-BRU/AMS.UK and even Euro airlines can't do JFK-BOS etc.


LHR-BRU/AMS are international flights. JFK-LAX is a domestic flight thats the difference.


CB777
 
JGPH1A
Posts: 15079
Joined: Thu Aug 14, 2003 4:36 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 1:02 am

Fares ex LHR and LGW are the same pretty much, there is no "LHR Premium" - so whatever "monopoly" exists at LHR obviously haven't read The Dummies Guide To Capitalism !
Young and beautiful and thin and gorgeous AND BANNED ! Cya at airspaceonline.com, losers
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 1:20 am

Thadocta,
LGW is a great airport indeed and I also prefer it but US airlines still don't have unlimited access to LGW. Bermuda II not only restricts certain airlines to certain airports but also limits access to LHR from specific US cities - ie only UA and AA can freely serve LGW or LHR from NYC. CO's EWR authority is specific to them and to EWR; DL cannot fly JFK-LGW.

Also, slots are the real issue that will determine whether the British offer meaningful access to LHR. I personally don't have a problem w/ US airlines having to buy some slots at LHR but they have to be given some level of free access or there is no access at all. If the British tell all US carriers that they can fly to LHR from any US city w/o providing slots, you will see every 3rd world airline sell their slots to CO, DL, and NW which will produce a result for London travellers that is as bad if not worse that the present. The solution to LHR access has got to include some complimentary access to LHR, and the right to serve any US city from LHR assuming each carrier can find their own slots, and unlimited complimentary access to LGW, STN, and every other UK airport except LHR.
 
Lindy
Posts: 4722
Joined: Wed May 19, 1999 10:42 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 1:34 am

Who decided on Bermuda II pact which US airline is alowed to fly to LHR?
I know that original carier to LHR was TWA (and Pan Am?).
I need some details please about Bermuda II.

Thanks,
Rafal
BWIADCA - Nikon D100
 
User avatar
STT757
Topic Author
Posts: 14221
Joined: Tue Mar 28, 2000 1:14 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 1:35 am

"Until the US removes the following, highly restrictive rules on:

1.) Foreign carriers operating, for example, JFK-LAX.
2.) Foreigners (e.g. Branson) owning a US airlien.
3.) and add any other protectionist crap such as "Fly America" rules.....

then there's a snowball's chance in hell that the British Government (NOT BA!) will open up LHR"

What a load of ....

First any European carrier can fly to any US airport that is capable of handling International flights (as long as there is a treaty).

US carriers in the past (UAL,DL, Pan Am, TWA) have operated flights between European countries. HOWEVER..

European carriers have the same oppurtunity in the US, Iberia for instance has a hub in Miami where they fly A319s to Latin America, Carribean etc. Air France operates ERJ-145s from Miami to Guadalope, Martinique and French Gyuana. Air France flies from Los Angeles-Tahiti, JAL operates from JFK-Sao Paulo etc..

The US Domestic Airline market is the largest in the world, it makes up 40% of the Worlds Air travel.

And the US is supposed to open this up to European airlines in exhange for 10-20 slots at Heathrow for CO and DL?..

No WAY.

There's nothing the EU could offer that would provide equal benefits to US carriers, European carriers would benefit tremedously from having access to the US Domestic market.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
boeing422
Posts: 28
Joined: Mon Jan 29, 2001 5:45 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 1:50 am

1) Didn't TWA sell its slots at LHR some time ago? If memory serves. Who bought them?

2) The issue of American control of slots at LHR and the Bemuda 2 treaty may be become a none issue if the EU - US negotiate a new treaty, which will happen. The issue of slots at LHR is of major concern to US negotiators.
 
RickB
Posts: 807
Joined: Mon May 19, 2003 3:11 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 1:51 am

STT757,

Your right - the US domestic market is the largest in the world. Why open it up to European carriers.

On the other hand LHR is the glittering prize on the international stage - why open it up to more US carriers?

What do you expect - the British government to simply open up LHR to all US carriers for nothing in return? Wont happen for exactly the same reason the US domestic market wont be opened up to foreign carriers.

RickB

 
User avatar
STT757
Topic Author
Posts: 14221
Joined: Tue Mar 28, 2000 1:14 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 2:01 am

If the US opens the US Domestic market to British Carriers they would have to open it up to everyone, the US does not need Aeroflot flying from Las Vegas to Sacramento!

A fair compromise would be to amend the agreement to allow an additional British Carrier (BMI) and an addtional US carrier (CO or DL) to operate LHR-US flights, that's an even trade.

If they want to expand that then Britain would need to find another carrier, most likely an Asian carrier (Singapore, Cathay, Qantas?) to enter the market to allow another US carrier to enter.

As for slot availability, the "new" Heathrow entrants should be allowed to buy slots from carriers with existing Heathrow slots.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
motech722
Posts: 177
Joined: Sat Aug 30, 2003 12:10 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 2:04 am

I think that Eg777er and STT757 both make valid points and are on the same line of thinking. Eg777er is from the UK, and STT757 is from the US, and both are protective about their nations' air service. This is the same thing that goes on between the US and UK governments, if one gives, the other needs to give as well, yet neither want to agree, so this battle continues.

What STT757 is stressing is what the US airline industry is petrified about, allowing cabotage in the states. Already US airlines have to compete with one another on domestic routes, but what would happen if foreign airlines could operate in the US domestic market and offer better service, or cheaper service? The fear is that someone like Branson would start flying in the states and his airline would take away passengers from the established US airlines, just as Virgin Blue took away passengers from Qantas.

He also said that "US carriers in the past (UAL, DL, Pan Am, TWA) have operated flights between European countries. HOWEVER...European carriers have the same opportunity in the US, Iberia for instance has a hub in Miami where they fly A319s to Latin America, Caribbean etc. Air France operates ERJ-145s from Miami to Guadalupe, Martinique and French Guyana." All good points, but this does not address the issue of cabotage, what the UK would like to be able to do in the US. I have a friend that used to be a captain for Pan Am serving in Germany. He said that there were flights back then where he would leave Berlin and fly to another airport in Germany, cabotage. While Iberia and Air France operate from US destinations to non-US destinations, it is not the same as what Pan Am used to do in Germany.

But at the same time, Eg777er has a very valid point too. If the US wants to get more slots at LHR, then why should the UK just give and not get anything in return? So BA bought these slots from UAL, big deal. This battle for air service agreements between the US and UK has been going on for a very long time and will continue to go on.

I don't believe there is a single answer to this, it's just too bad that both countries can't work this out.
 
User avatar
airzim
Posts: 1472
Joined: Wed Jun 20, 2001 7:40 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 2:28 am

The German IGA service with Pan Am was for flights to and from Berlin and was limited to Pan Am and I think BA and Air France. This was a special circumstance in post-war Europe and obviously it is not a fair comparision since technically West Berlin was not part of West Germany, it was controlled by the US, France and Britain. Since Germany is united I don't believe Pan Am could have continued the services if they were still around today.

The big fear the US has with foreign airlines serving US services is for government subsidized carriers or ones that don't really care about profits flying 747's from JFK to ORD hourly charging a buck and running the US carriers out of business.

Also Artsyman, the slot allotment was a blind auction and BA was the highest bidder. The slots were just not given to BA in fact I doubt that UA had any idea that BA was the winner until the auction was over. It just as easily could have been Aer Lingus or Virgin that would have won the slots had they bid higher.

[

British Airways confirmed it purchased four transatlantic slots--two landing and two takeoff slots--at London Heathrow from United Airlines, further expanding its dominant position at the airport, where it now holds 41% of the slots.

BA declined to reveal what it paid for the slots, which it won in a blind e-auction staged by United, but reports value the deal at around £12 million ($19.2 million). "We are always looking at ways of growing at Heathrow to improve flight schedules and make them more attractive to customers," said BA spokesperson Richard Goodfellow.
During the last 18 months, BA has been involved in several public slot exchanges in an effort to boost its market share at Heathrow while downsizing its presence at Gatwick. Last month it signed an MOU with Swiss International Air Lines outlining the right to enter into a slot exchange for eight of the 14 slot pairs the Swiss carrier holds at LHR and last year it bought seven LHR slot pairs from SN Brussels Airlines. It concluded similar deals with Balkan Bulgarian Airlines, Lithuanian Airlines, Avianca and Adria Airways.

Taken from ATW on-line October 14th, 2003 http://www.atwonline.com/indexfull.cfm?newsid=3535





[Edited 2003-10-16 19:33:20]
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 2:31 am

I thought they switched them b/c some latter part of the morning slots opened up

nope.


First any European carrier can fly to any US airport that is capable of handling International flights (as long as there is a treaty).

This post seems unaware/forgetful of the fact that Bermuda2 limits USA-LON gateways to a number of 29, with only 12* having permanent access to Heathrow


*15 are in current operation, due to BA's switchover of SAN/PHX/DEN
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
richierich
Moderator
Posts: 3632
Joined: Sat Nov 04, 2000 5:49 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 2:54 am

I think the British should get a new runway built at Heathrow, followed by a new terminal or two. THey will need to do something to keep LHR the premier European gateway and end the bickering between airlines.
None shall pass!!!!
 
User avatar
STT757
Topic Author
Posts: 14221
Joined: Tue Mar 28, 2000 1:14 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 3:28 am

"He said that there were flights back then where he would leave Berlin and fly to another airport in Germany, cabotage"

Indeed this is a poor comparison, West Berlin was controlled by Britain, France and the US. Pan Am after WWII. Techically it was not a Domestic flight from the Allied controlled sector of Berlin to Dusseldorf etc.

Anyways there are no more intra Germany flights.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 3:29 am

but what would happen if foreign airlines could operate in the US domestic market and offer better service, or cheaper service?

You mean cherry-picked service?

I'm sure BA/AF/SQ/CX/etc would love to fly JFK-LAX or SFO-IAD, and would probably provide great service in doing it..... but what incentive would the have to serve Billings, Montana; or Concord, New Hampshire. We're basically getting a sense of that affect now with the advent of LoCo carriers.

Having to defend such transcon routes could cause the domestic airlines to reduce their focus on more marginal routes, therefore causing the smaller communities to suffer. Therein lies the real crux of allowing cabotage.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
User avatar
STT757
Topic Author
Posts: 14221
Joined: Tue Mar 28, 2000 1:14 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 3:30 am

Motech722,

Another problem is that some foreign carriers are either partially or fully owned by Governments, Air France is partially owned by the French Government.

Why should they be allowed to operate within the US against publicly traded US Airlines which have to seek investor capital from the private sector.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
Guest

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 3:56 am

In the past, both BA and Virgin have both made false arguments in order to undermine the success of any open-skies negotiations between the US and Britain.

Among the false arguments:

1) Cabotage - For any foreign carrier, the logistics of doing so on a medium to large scale would be enormous. No foreign carrier has the US infrastructure to mount a US domestic network of their own. And, their US partners wouldn't be too keen about helping them since it would literally mean setting up their own competition.

What cabotage would likely turn out to be for the biggest of the European transatlantic carriers is a network of tag-on flights, such as JFK-LAX tagged onto for example LHR/CDG-JFK. However, that isn't as easy to pull off either. Even if the US agreed to that, facilities at LAX to handle those additional flights do not currently exist. The Tom Bradley terminal certainly can't handle them. Moreover, "peak-time slots" at JFK, specifically domestic ones, are restricted. So, any European carrier contemplating such a flight would have to buy or lease a couple of slots (just for JFK) from an incumbent carrier. At JFK the biggest holder of those slots is AA. I just don't see them handing them over to Air France, so that they can erode AA's yields on that route.

Moreover, you have to imagine what such actions on the part of EU carriers would do to their currently established relationships with US partners. The basis of any cooperation would effectively disappear if instead of relying on Delta to ferry codeshare passengers from JFK to LAX Air France would now try to compete directly with Delta on that lucrative route.

Provided the EU airlines, including Virgin Atlantic, have thought this through, you see, then, that there is nothing really to be gained from cabotage. US carriers, like Delta and TWA, realized that long ago. Both had European hubs and the right to pick up European passengers at points beyond the hub. Those hub operations are long since defunct.

2) "Fly America" rule.

EU carriers would also gain nothing from removing this restriction.

Unless removing this restriction results in structural and deep philosophical changes in the way that the US government awards military or government contracts, civil cervants and military personnel on government business will continue to fly US airlines exclusively. Why couldn't that happen? Well, because in the one other instance where a similar policy was also altered in response to a trade dispute (over military procurment projects), the track record has shown that the US continues to do business only with US-based companies. I am, of course, referring to the circumstances related to the air-tanker procurement. Despite all appearances to the contrary, Airbus was never a serious candidate to win the contract.

3) Foreign ownership of US airlines

This argument is both false and true, depending on who makes it.

If Richard Branson is making it, it most likely is false. Truth is, and Branson knows it, that the window of opportunity for launching a low-cost airline in the US has long since past. The market can probably only sustain the one's currently in existence and their continued level of growth.

Prior to the emergence of JetBlue, Branson might have been speaking truthfully. Now, it can only be seen as a move to delay any progress.

Even back then, one had to wonder whether Branson had carefully considered the proposition. Because if he had, it would have naturally occurred to him that if foreign ownership were to be allowed under an open skies regime with full access to Heathrow, there would be no stopping AA and BA from fully merging. That would not have been a very good outcome for Virgin in the long run. Personally, I am one who thinks that he had considered this outcome. And, that in opposing open skies unless he got full ownership rights, he really was being disingenuous.

Management at BA has also made this argument from time to time. When they were just starting to form their US strategy, and when that strategy still involved US Air, they actually meant it. Full ownership of US Air would have provided them with control of their own US domestic network. Not sure how much more successfull they would have been at running US Air than others have been since. Remember, British Airways hasn't been any more successful at competing head to head with low-cost carriers in Europe.

After it cashed in its investment in US Air, BA management stopped making this argument. Instead, they became willing to accept full access to Heathrow if the US approved their virtual transatlantic merger with AA. Neither airline was looking to own the other at the time; they just wanted anti-trust immunity in order to operate as a single airline over the Atlantic. Well, we all know what happened to that proposal.

Since then, BA and AA have managed to get approval for a codeshare operation on points beyond their respective gateways and hubs. In light of the AirFrance/KLM merger, BA management is even talking again about a full-merger between BA, Iberia, and AA. What a transatlantic behemoth that would be across North and SouthAmerica! Whatever the case, this argument now holds more truth for BA than it has in the past.

So, having put these false arguments aside, let's deal with the most false argument of all - Continental's outrage at the sale of these slots.

Previous posters have already deduced what makes this argument false, the fact that UA had no choice but to sell them to an incumbent LHR carrier.

You've got to give management at Continental credit, however. They're starting to sense that they are not going to gain much from a Pan-European open skies treaty. All the EU can do is provide empty promises that LHR will be open to all US Airlines. Unlike the British government, it can't provide US carriers with free slots. So, Continental may just have to purchase them on the open market if they are not all gone by the time they earn the rights to fly to LHR. Add to that the specter that with full open-skies between the EU and US, AA and BA will get defacto anti-trust immunty without giving up any slots and now suddenly the situation gets very depressing for Continental. I'd be outraged too. But, you know what. What was really outrageous were the demands Continental/Delta/Northwest made to the DOT when AA/BA last requested anti-trust immunity. Delta alone requested over 120+ weekly slots. So, these three deserve everything they don't get.
 
motech722
Posts: 177
Joined: Sat Aug 30, 2003 12:10 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Fri Oct 17, 2003 4:08 am

"Why should they be allowed to operate within the US against publicly traded US Airlines which have to seek investor capital from the private sector."

STT757, I'm not saying that these airlines should be able to operate in the US, but at the same time I'm not going to say they shouldn't. I'm just pointing out that if the US wants a truly open-skies arrangement, then allowing operations within the US is something that is a must be seen in the future.

You make a good point about Air France being partially owned by the French Government, but let's remember that even so, Air France flies to the US and competes directly with US airlines. Is this fair on international routes? Maybe not, but if Air France flew in the US domestically, then how would it be any different from the effects of the government-backed airline on international routes?

ConcordeBoy, Yes, I'm sure BA/AF/SQ/CX/etc would love to cherry-pick routes in the US, but what is the difference between them doing this versus US carriers doing the same thing? The incentive would be the same as it is today.

I'm not that familiar with Billings, Montana; or Concord, New Hampshire, but it's like Eugene, Oregon and Wichita, Kansas. In order for these city to get improved service, they established an incentive known as a travel bank. In return, Eugene attracted America West Express (Mesa) and Wichita attracted both AirTran and Frontier (operated through Mesa as JetExpress). These travel banks have also helped other cities, like Pensacola, Florida. Perhaps the way to entice US carriers, or even foreign carriers if cabotage was allowed is to set up travel banks throughout the nation. It's sad, but if it must be done, so be it.

Your point about "having to defend such transcon routes could cause the domestic airlines to reduce their focus on more marginal routes, therefore causing the smaller communities to suffer" is very true too. But let's remember that for years smaller communities have been suffering. If it were not for incentives like EAS, then many of the communities that have service today would have nothing at all.

I'm not trying to disagree here, just trying to throw out other ideas. Of course if the US opened up its skies to allow for cabotage, other countries would need to follow suit as well. It is by no means a one-way street, foreign airlines would have to be concerned about US airlines taking over their turf as well. And let's remember, if foreign airlines could own US airlines, the same could be true of US ownership of others. There are no doubt many pros and cons.
 
HlywdCatft
Posts: 5232
Joined: Mon Jan 29, 2001 6:21 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Sat Oct 18, 2003 6:17 am

Maybe American Airports should close the doors to any new BA expansion and bring Virgin or BMI in instead.
 
eg777er
Posts: 1782
Joined: Fri Feb 04, 2000 11:11 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Sat Oct 18, 2003 7:41 am

Gosh, you go away for a couple of days and an intelligent and reasoned debate breaks out in your absence!  Big grin  Big grin  Big grin

To be honest, I'm in favour of the opening up of Heathrow, but with certain conditions. It was quite rightly mentioned that Heathrow is a prized asset...therefore we as the British would be negligent in just "selling it down the river."

The EU has decided, with a timescale of pretty much its own choosing (typical!), that in the future these sorts of agreements will be be negotiated at a supranational rather than national level.

Now, the significance of this may be lost on our American cousins, and I don't blame them, but basically it means that the EU will be the determining authority in all relations. That means, in future, bilateral agreements will be negotiated by the EU on behalf of the member states. In the same way that the US Government negotiates on behalf of Texas, California or Vermont.

The aim from the European perspective is to finally get some weight behind the negotiations from our side of the pond. You're right STT757 in saying that the US domestic market is 40% of the world total.......the US is a titan in aviation and getting an agreement that protects the rights of European carriers can only be achieved if the EU acts as a counterweight to the US.

Eventually I hope to see a common EU-US aviation area, where any carrier is free to fly from anywhere to anywhere. However, having an agreement such as this is all well and good, but it is still subject to practical factors that are irrespective of the treaty governing them.

And this brings us neatly to the question of access to Heathrow. Sometimes I have to remind myself that Heathrow is the 4th or 5th largest airport in the world. It has two runways. It is congested. The skies above West London are crammed full of aircraft waiting to land, all day long. It is the only airport in the world where I have looked out the window whilst in the hold and seen up to 10 aircraft sharing the sky with me. At multiple times in every day Heathrow is "full". It means that aircraft taxy around waiting for a stand to be vacated by another, departing aircraft. Any delay, any runway blocked for whatever reason throws the operation into chaos. It is a miracle that Heathrow works at the best of times.

So, Heathrow's exclusivity is not limited by the treaty, more the available capacity. And all that stuff about slots going to BA is absolute rubbish. BA are actually having to pay money to consolidate their position......unlike US carriers at their fortress hubs who have very cosy relationships with airport operating authorities. Perhaps one could compare the percentage of slots that CO holds at HOU and EWR with the percentage that BA holds at LHR. I think you'll find that CO is in a much more of a monopoly position than BA!

Now, if CO really wanted to operate from Heathrow, then they could offer to buy United's entire operation, which is what United did. That's the only way that they'll be able to operate at Heathrow with any meaningful operation (by meaningful I mean an operation that can provide benefits to the consumer as well as the airline). One return flight from LHR to EWR on Continental metal is not going to help the airline nor deliver value to the UK public.

At the end of the day, Heathrow is a very crowded airport, and US carriers cannot expect the automatic right to fly there.

However, if the US were to drop some of the more overtly protectionist policies that they currently practise then perhaps we could start to trade commodities of equivalent value. In fact, the contributions from certain American members to this thread show a remarkable distaste for the virtues of free enterprise that are so often espoused as being the ultimate in American values.

Some examples:

If the US opens the US Domestic market to British Carriers they would have to open it up to everyone, the US does not need Aeroflot flying from Las Vegas to Sacramento!

Sir Freddie Laker once said that the chief argument British Airways used against his SkyTrain was that "why would anyone want the SkyTrain when we provide wonderful service across the Atlantic?" His message was that the consumer decides what he or she wants in a product: If Aeroflot could offer a better product at a lower price from Las Vegas to Sacramento, why shouldn't they be allowed to compete?

Having to defend such transcon routes could cause the domestic airlines to reduce their focus on more marginal routes, therefore causing the smaller communities to suffer.

Sorry, this is quite ridiculous. If routes don't pay, cut them. That's the key to a successful airline. If US carriers are actually flying unprofitable routes, then they should be shot. If I was a shareholder and I knew that my carrier was flying a route that was a drain on the financial performance of the company (i.e. it offered nothing in terms of O&D or transfer traffic) then I'd be pretty pissed.....

There's nothing the EU could offer that would provide equal benefits to US carriers, European carriers would benefit tremedously from having access to the US Domestic market.

Nonsense. The EU is a union of 400 million people, and will soon have a GDP to match or exceed the United States. The rights to exploit a largely untapped demand for air travel could be seen as being very prized indeed.....after all, the low-cost carriers have illustrated that the average European doesn't care for free drinks, on-time performance or friendly service......so perhaps your average US network carrier would do rather well!

In all honesty, I'm tired and ready for my bed. But I stand by what I said at the beginning of this thread. No opening of Heathrow until the US market is opened. It seems to bother you that Heathrow is shut more than it bothers us that the US is shut; so in this deal, we have all the bargaining chips.

 
User avatar
STT757
Topic Author
Posts: 14221
Joined: Tue Mar 28, 2000 1:14 am

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Sat Oct 18, 2003 1:07 pm

"Perhaps one could compare the percentage of slots that CO holds at HOU and EWR with the percentage that BA holds at LHR. I think you'll find that CO is in a much more of a monopoly position than BA!"

The problem is LHR is closed to most US airlines, but every single airport in the US capable of handling International flights is open. There are only three slot controlled airports, Chicago Ohare, NY Laguardia and NY JFK.

Of which only two can handle International flights (save LGA's Canadian, Bermuda and Bahama flights).

However ORD's and JFK's slot restrictions do not prevent anyone from launching service, it just regulates the hours of operation. However by 2007 there will be no slot restrictions at any airport in the US.

"That means, in future, bilateral agreements will be negotiated by the EU on behalf of the member states. In the same way that the US Government negotiates on behalf of Texas, California or Vermont.

The aim from the European perspective is to finally get some weight behind the negotiations from our side of the pond"

The problem is even with the EU negotiating for everyone in Europe they are still not equals, the US Domestic market dwarfs the combined EU market.

The US carriers are much less dependent on International travel (especially to Europe) than Carriers such as LH, VS, BA, AF etc. Some European carriers derive as much as 60% of their revenue from trans-Atlantic routes.

The most International dependent US Airlines (AA, UAL, DL, CO etc) probably derive less than 25% OF their revenues from International flying.

What does this mean? The US has an overwhelming advantage in negotiations no matter if it's the EU or Luxemburg they are negotiating with, because US airlines have little to no desire for domestic cabotage rights within Europe where European and Asian Airlines desire those rights in the US.

The US in negotiations with the EU could easily shut out EU airlines from airports such as JFK, EWR in retaliation for not letting more US airlines have access to LHR.

European Airlines are much more dependent on trans-Atlantic traffic than US airlines, if the EU played hard ball their own airlines would suffer.

The US has only one subject of negotiation, open access to Heathrow.

Where EU carriers want..

Access to the US Domestic Market

The ability to own more US airlines

EU-US open skies.

Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
masseybrown
Posts: 5584
Joined: Wed Dec 11, 2002 2:40 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Sat Oct 18, 2003 4:36 pm

There are minor errors of fact in several posts in this thread. Rather than nitpick individual posts, I suggest the following sites for further reading about Bermuda II and LHR, if you want the whole story:

http://www.lawreports.co.uk/ecjnovc0.2.htm

This is a synopsis of the EC ruling regarding the UK's authority of renegotiate Bermuda II

http://www.parliament.the-stationery-office.co.uk/pa/ld199798/ldselect/ldeucom/156/8070802.htm

This is a memo for discussion in the House of Lords regarding the EC dispute. If you look around, the Stationery Office site also has a good Lords discussion of Bermuda II issues in general.

http://dms.dot.gov/search/document.cfm?documentid=145307&docketid=11029

This is a US Dept. of Justice discussion (from the US point of view, obviously) of competitive issues regarding service to LHR.

There is also a great Danish site which has the ur-text of most international aviation treaties. Unfortunately, I've lost the site, but I'm pretty sure it has been mentioned in previous discussion of Bermuda II on this board. Maybe some kind person can repost that site.
 
flyboy36y
Posts: 2897
Joined: Sun Mar 19, 2000 1:45 pm

RE: CO "outraged" At Sale Of UAL LHR Slots To BA

Sun Oct 19, 2003 12:03 am

I do'nt know if this was mentioned, but in addition to Virgin, UAL, AAL, and BA, several other carriers fly JFK-LHR. At the very least I know that Air India does.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos